Finding a Needle in a Digital Haystack of InformationPosted 9/08/2006
By Colby Horton
From ordering parts online to accessing information, the Internet has changed the way automotive service and repair shops do business. Find out how to effectively manage the changing ways of doing business.
The automotive service industry is in a state of constant technological change. From the vehicles we service to the tools we use to repair these vehicles, technology has an enormous impact on the way our industry conducts business.
Considering that there were 1 billion Internet users last year with 70 percent of American adults being online, the Internet has truly become an integral part of our lives, especially when we look at how we do business today. In 2005, Internet spending topped $143.2 billion, and the automotive repair industry is certainly a major player in that spending habit.
Software designer and developer Clement Mok said, "Five years ago, we thought of the Internet as a new medium, not a new economy." But now, more than 10 years after the adoption of the Internet by consumers, it has become a powerful medium for economic development. The Internet's strength comes from its overall convenience and robust capabilities. As Microsoft founder Bill Gates put it, "The Internet is becoming the town square for the global village of tomorrow." Is your shop readily adopting the capabilities of the Internet to become part of this "global village of tomorrow?"
Online Parts Ordering
According to AutoInc.'s latest "How's Your Business?" survey, 65 percent of mechanical business owners use the Internet to order and track parts. Of course, the parts ordering arena has completely changed since the advent of the Internet. Unlike its "green screen" predecessor, the Internet incorporates photos, descriptions, and in some cases, installation instructions. The real-time, e-commerce capabilities of the Internet have truly revolutionized the parts procurement process.
But the biggest advantage of online parts ordering is that shops can receive comprehensive, timely and accurate information when ordering late model parts. And because of the higher focus on images and specifications of each part, there is a diminished rate of error when ordering a part online.
There are 150 million automotive parts and accessories searches per month on Yahoo!. Parts companies realize the value of the Internet. Most major parts distributors and manufacturers have the ability for shops to order parts online. Marketing efforts of the major manufacturers have truly become Internet-driven. Speaking to a group of parts distributors and technology providers at the recent Aftermarket eForum, Lon Bollenbacher, automotive category director for Yahoo! Search Marketing, said, "The Internet now reaches and targets. Everything you do offline ultimately manifests itself online."
Most shops that use later versions of shop management software systems know that parts catalogs are now integrated into the system. If the shop has Internet access, it can order parts online directly through the software system. Last year, NAPA allowed owners of its NAPATRACS software to take advantage of electronic parts ordering using an Internet-based NAPA catalog, which features more than 100,000 product images, including exhaust diagrams. Alldata incorporates its AZ PartsConnect feature into its product. Mitchell 1's OnDemand5.com offers Internet-based parts ordering as well. And Keystone has more than 10,000 body shop and insurance customers ordering collision parts through its OrderKeystone.com Web site, which was launched during last year's International Autobody Congress and Exposition (NACE).
But some nontraditional companies are entering the online parts ordering field as well. Amazon.com, which recently added an online grocery store to its wide array of online stores, is quickly becoming a major player in the automotive aftermarket.
"Auto parts is one of the largest categories we hadn't yet addressed," said Steve Frazier. Frazier oversees the automotive retail group of Amazon.com. The company launched an automotive parts and accessories store last year and is currently beta-testing a new parts locator system. He says the automotive parts sector allows Amazon.com to "leverage the technology we've been building for years, yet it forces us to innovate as well." If you're familiar with purchasing books on Amazon.com, then you'll be familiar with how the company sells auto parts. Parts are sold based on condition type - new, remanufactured and collectible.
In addition to Amazon.com, eBay has seen an enormous growth of its eBay Motors sector (www.motors.ebay.com). More than 10 million shoppers visit eBay motors per month. An auto part is sold on eBay every two seconds, an auto body part every 11 seconds, and a powertrain part is sold every 25 seconds. The result is billions of dollars per year sold on what some might consider an unconventional venue for parts procurement. eBay Motors also provides shops a place to get rid of extra parts inventory through its new eBay Express (www.ebayexpress.com).
Electronic Customer Relationship Management (eCRM)
The Internet changes every facet of doing business. You don't operate your business the same way today as you did five years ago. We live in a technology- driven society where consumers are consistently looking for convenient, real-time applications. But no matter how much technology takes over the way we do business, customer relationship management should always remain at the forefront of your business plan. But perhaps it needs to adapt to today's consumer needs.
One of the biggest issues facing today's independent automotive repair sector is telematics. General Motors is continually driving vehicles back to dealer shops through the invention of OnStar. But perhaps one of the best ways to combat this issue today is for the independent shops to take advantage of electronic-based, interactive customer relationship systems. And the Internet is the vehicle to drive such an initiative.
"The aftermarket has benefited greatly from behavior changes brought about by the general consumer Internet experience," said Stephen Liao, founder of MechanicNet (www.mechanicnet.com). His company was established in 1999 and offers the automotive aftermarket an electronic-based customer relationship management (CRM) system.
Constant communication with your existing customers is paramount to the success of your repair facility. And like MechanicNet, companies such as OnStation (www.onstation.com) and Mitchell 1 CRM (www.mitchell1crm.com), and even traditional direct mail companies such as CustomerLink (www.customerlink.com), have developed comprehensive electronic CRM systems. If you can touch a customer before and immediately after the repair process, you'll develop customer loyalty, much like the goal of the vehicle telematic industry. Some integrate and synchronize with your shop management system.
Did you know that 96 percent of adults say the main reason for being online is to check e-mail? Thirty-four percent of adults check their e-mail "continuously" throughout the day, and 42 percent check business e-mail while on vacation. Good eCRM systems leverage the power of e-mail to deliver service reminders, thank you notes and CSI surveys. Many take the deliverables one step further by allowing consumers to schedule or request service by clicking a link within the e-mail. These features are essential in today's consumer environment.
The new "diagnostic tool" of GM's OnStar program notifies customers of maintenance based on vehicle driving habits. eAutoClub (www.eautoclub.com) takes eCRM to the next level and combats the concern of this new telematics tool head-on. Using a synchronization of Web-based and software-based applications, the company's eAutoWiz produces highly customizable direct mail pieces for shop customers. The personalized pieces contain various messages, photos, special offers, and highly detailed, vehicle-specific preventive maintenance information catered specifically to the customer's needs. Promotional pieces are based on life-mileage averages, not "assumed daily mileage averages."
In addition, automated courtesy calls link to everyone who has been mailed a service reminder postcard. A pre-recorded message from the shop manager or owner is delivered to customers who received the just-mailed service reminder postcards. According to the company, shop owners report average increases of $40 to $180 per work order by using eAutoWiz.
Online Training and Education
According to AutoInc.'s most recent "How's Your Business?" survey, 18 percent of mechanical shops and 26 percent of collision shops receive training through the Internet. This number is up from 14 percent and 22 percent, respectively, in 2004. Perhaps the increase is because today's online automotive training integrates audio, video, animation and total interactivity into the curriculum.
The concept of e-learning in the automotive industry allows instructors to reach an audience previously untapped. The training is fast, convenient and responsive to today's shop needs. When new technical procedures occur, they can be immediately incorporated into courses.
Delphi's e-Tech Network (www.delphi-iss.com) is leading the way for online technical training, offering a comprehensive education tool that is designed to improve service bay efficiency. Its interactive training covers a variety of topics including anti-lock brake systems, A/C systems, electrical systems and diagnostic scan tool techniques. The programs keep technicians' attention through animation, full-motion video and interactive demonstrations. Technicians develop hands-on skills through an online environment.
Online training is not for everyone. Going from traditional instruction to an online training environment is a difficult transition for some. If a technician is reluctant about participating in online training, then the traditional alternative will always be best. But as a younger generation of technicians enters our industry, the adoption of online technical training will continue to grow. Keep your options open and understand the alternatives to traditional, instructor-led training. Internet technology is allowing technical training to be streamed over the pipelines and delivered in a highly interactive format; certainly rivaling traditional training methods.
Mathematician and author John Allen Paulos once said, "The Internet is the world's largest library. It's just that all the books are on the floor." The days of bulky repair manuals are almost gone. No longer is information out-of-date as soon as the manuals are published. The Internet has the ability to house millions of repair procedures and technical service bulletins.
One of the primary uses of the Internet in an independent automotive facility is for information access. In fact, 90 percent of mechanical shops and 72 percent of collision shops use the Internet to access service and repair information, according to AutoInc.'s "How's Your Business?" survey.
Identifix (www.identifix.com), which started in 1987 as a telephone repair hotline, now has a comprehensive online program that allows technicians to easily find the information needed to fix a particular vehicle. Combining an extensive archive of vehicle problems, hotline solutions, technical service bulletins, wiring diagrams, specifications and diagnostic information, the company's Direct-Hit product is one of the most complete information sources on the Web today. Identifix recently added the 125,000th hotline archive to Direct-Hit. In fact, more than 1,000 new hotline archives are added to the product each week.
The issue of "net neutrality" will shape the future of the Internet, including the way the automotive aftermarket conducts business online. Fundamentally, net neutrality means that all Web sites, regardless of content or site owner, are treated equally on the Internet. In other words, Internet service providers - such as AOL, AT&T, MSN or Earthlink - can't favor any online content over another. The concept has been around since the inception of the Internet. But, the idea of net neutrality is seriously being challenged. The U.S. House of Representatives recently voted down an amendment to uphold net neutrality. So, if it continues through the legislative process, there is a possibility that the way information is streamed into your home and shop will dramatically change.
If the idea of net neutrality is diminished, ISPs will be able to control the data networks that make up the "information superhighway." If a Web site does not pay your ISP a certain fee, the service provider will have the right to reduce the bandwidth the Web site occupies, block certain information from that site, or in extreme cases, redirect you to a similar Web site that has paid the fee. The idea truly challenges the value of the Internet.
"Today the Internet is an information highway where anybody - no matter how large or small, how traditional or unconventional - has equal access. But the phone and cable monopolies, who control almost all Internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest," said Eric Schmidt, CEO of Google Inc., the most-used search engine on the Internet. "They want to build a two-tiered system and block the on-ramps for those who can't pay. Creativity, innovation and a free and open marketplace are all at stake in this fight."
The issue of net neutrality affects your business and your personal use of the Internet. If the idea is defeated, expect another "dot-com" bust. This time, however, it could be permanent. Even the strong may not survive.
To send a letter to your senator regarding net neutrality, go to www.SaveTheInternet.com. Advances in Internet technology have changed the way the world learns, conducts business and communicates. As Internet pioneer Bill Schrader said, "Almost overnight, the Internet's gone from a technical wonder to a business must."
Using the Internet in your shop isn't about convenience anymore. It has quickly become a necessity. Whether you're a slow adopter or a tech-savvy shop owner, the Internet can help you run your business more efficiently. It's the direction more and more companies are heading. Are you taking advantage of the capabilities?
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