On Wednesday, I went to Demo Day for one of Los Angeles's new start up accelerators, StartEngine. I've got to say, I was very impressed with the companies coming out of that program. One, in particular, got me thinking about analytics in the automotive industry, the antiquated manner in which customer data is collected by the factory and the love-hate relationship that many factories have with their dealers; it's kind of like Family Feud. Maybe it's time to shake things up a bit.
CSI is the industry benchmark for customer service. It is a critical metric manufacturers use to measure their dealers' performance. If a factory wants to add a point in a dealer's relevant market area (RMA) or terminate a dealer, in support of its legal argument that it should be allowed to do so, the factory points to a low CSI score to argue that the dealer isn't adequately serving the market. In these circumstances, millions of dollars are often at stake.
But let's take a closer look at how a factory obtains its CSI analytics. CSI is often measured based on telephone or mail in surveys. Who has time to respond to a telephone or mail in survey these days? If by telephone, you can't control the time of the call. You might be in the middle of vacuuming your house or eating dinner. Maybe you tell the survey-taker you don't have time to talk, or maybe you ask them to call you back. Maybe you let the call go to voicemail. If by mail, you can control the timing, but then you have to go through the laborious process of finding a pen, reading the lengthy form, filling in the little dots, completing the form, licking the envelope and trying to find a stamp, and then going to the mailbox. Who does that anymore? If you wouldn't do it, why would you expect your customer to do it. So you have to ask yourself, how good is the factory's penetration rate?
And even if a factory claims a high penetration rate, who are these people who take the time to give someone a piece of their mind during Opra or at the supper table? Who is it that takes the time to complete the factory's version of the SAT exam and mail it back? Is it more likely to be the business executive who just leased his 7th BMW 5-series in a row or the customer who is angry because he had an unpleasant experience at the dealership? Common sense tells us that if the manufacturer's survey penetration rate is high, one would expect the numbers to skew lower than they really are.
So back to this company I saw on Wednesday. It's name is Osurv, a mobile survey company. It's not doing anything now in the automotive space. But from what I observed it's application is fun, simple and fast for the consumer. And its analytics feature is really neat. If this type of application, whether by this company, or some other company offering an easy to use, fun and compliant survey platform, backed by strong analytic programming, is applied to the automotive retail sale industry, customers could download the app for free -- or if they already have it on their mobile device, simply open it up -- and while they are still in the dealership, complete the survey in front of the F&I Manager or salesperson at the time of delivery or the service advisor after a service appointment. Dealers may even be able to obtain close to 100% penetration, if they train their sales and service personnel to reinforce their customers' use of the application. After all, very few customers are angry when they are still in the dealership (and those that are angry are going to fill out the factory's SAT exam anyway).
Many new tech companies talk about their products as enhancing CSI scores. They sell a product to the dealership with the carrot that using their product will enhance CSI. While I have to admit that my day job keeps me too busy to conduct comprehensive market research on new sales gizmos, I am not aware of anybody whose product is addressing the fundamental analytical flaws in the factory's methods of gathering CSI data.
I can see the potential a mobile survey has for modernizing CSI surveys and results, as well as providing market research on your store's customer demographic, if it is applied to the automotive industry and becomes popular enough to become an industry standard. It would give dealers some ammunition against a factory, when the factory relies on CSI rankings to argue that the dealership is not performing because some fuddy-duddy with an axe to grind bothered to fill out the Dead Sea Scroll-like survey the factory mailed out. Using a mobile application, with a tap of a finger, you could download your CSI report to show the judge or jury that the factory's analysis is not credible because it is behind the times, or that the factory is making up its allegations.
And that's how you play Family Feud in the automotive industry.