NADA Special: Service: Finding the Balance Between Relationships and Transactions

Greg Uland Hi, I'm Greg Uland with Reynolds and Reynolds and this is Connected. Today I get to talk with Ken Malden, who's the fixed office director at South Toyota, part of the Purdy Group with three Toyota stores here in Texas. Ken, thanks so much for talking.

Ken Mauldin Thank you for having me.

Greg Uland Absolutely. So fixed ops director, Toyota stores. What are you focused on right now? We've talked a little bit before recording about customer experience and things like that. But what's the one or two things that are the priority for you?

Ken Mauldin It really has become the customer experience and what we can do to help manage customer expectations. Now, after COVID happened, things like that, we have really taken a deep dive into innovation. What can we can do to go to the next level as far as handling our customers and meeting their expectations on the service drive, especially with technology that is involved?

Greg Uland Yeah, for sure. So what are those expectations that you're seeing? And every dealer's different, and different regions of the country are different. But for your customers, what are those expectations?

Ken Mauldin That's a really good question. I have quite a few of my mentors, quite a few of other fixed ops guys. We have a conversation about this all the time, and it's kind of come to the conclusion of are we still in a business where it's relationship or is it transactional? A lot of people don't like to admit it because this has always been a relationship driven business and we still have to have that to an extent. But I think it's kind of come to the point where it's becoming more transactional because customers are looking at how soon can you get me in, how much is it going to cost? And that's really all they want to know.

Greg Uland Yeah.

Ken Mauldin We have on our service drives, for instance, we have gone to using kiosks for check-in process and it's been very successful with us. We have about 80 to 85% of our customers all check into a kiosk now.

Greg Uland So do you have somebody that takes them over there? Because I've seen different dealers use it in different ways. Some will have something outside or some have something in the drive and they'll have big signage or flashing lights "come here to check in". Some will have somebody that goes in and kind of walks them over there, or if they have more in-depth repairs, will take them to an advisor to talk. What's your process like?

Ken Mauldin Ours is actually pretty simple. We do have kiosk concierges at all three of our stores. A customer pulls into the service drive. They're greeted at their car by a concierge and they grab a little bit of information off the car. And then at that point they ask them, well come with me, let me get you checked in. It's not really an option, so to speak. And we can do just about everything from the kiosk itself. The only people that we don't do from the kiosk at this point are customers that are insistent on talking to a service advisor and our brand new customers that have never been there with a VIN number and that type of thing. So we'll take them straight into an advisor at that point.

Greg Uland Okay, that makes sense. So as you're describing that, though, I push back a little bit and I'm curious what your thoughts are. I want to bounce this off of you on the idea of it being transactional versus relationship. And I wonder if it sounds like it's more of a blend, right? Because you're providing an experience. You have a person involved. So it's not a 100% transaction. It's important to be able to do the work quickly and to do it at a price that is reasonable. But at the same time, people still I think... I don't know, you're seeing it every day so maybe I'm maybe out to lunch. But it seems like there is still this desire to have some sort of human connection.

Ken Mauldin There is and there isn't because they're not. They have the human connection with the concierge at the kiosk. But just to give you an example, when they get to the kiosk, the average check in time is about 2 minutes. And for example, with our stores, we use Lyft and Uber to our customers everywhere. So there's a lot of our customers that come into the kiosk. They get checked in, they actually request their Lyft and Uber. They go straight out, get in the car and leave. They actually never even talk to the advisor at that point. But then the advisor obviously picks up the phone, calls the customer, verifies that type of thing as they go to write the repair order. But believe it or not, there's a lot of customers that sometimes not until the end of the process, they actually sit and have a conversation with the advisor.

Greg Uland So I want to touch on, before I forget about it, the Lyft and Uber thing for you. Are you paying for that or is the customer paying for that?

Ken Mauldin [00:03:53] We pay for that. We did an analysis looking at, for instance, my store here in Dallas. We had two shuttle drivers, two vans. Expenses both ways. Believe it or not, the cost of using Lyft and Uber is about the same. It's not really saving anyone. It's about the same. But what it does do is, it's basically time effective. I don't have a customer sitting here waiting on a shuttle that's coming back because they had to go take two other people. This is instant. We've actually become a hotspot for Lyft in the morning. It's great. They'll sit at the McDonald's down the street from us and wait for us because they know the first few customers, they're going to get quite a few hits right off the bat. 

Greg Uland I'm sure. It's 7:30 or whatever time you open up and everybody's dropping it off to get to work and it makes sense. So talk a little bit about then taking it a step further. You mentioned the advisor talks to the customer to sell the work essentially at the end of the process. What does that look like? Again, thinking about what it takes to sell? So the technicians back there, does the inspection, customers off to work because they got an Uber in the morning and now it comes time where that advisor has to reach out and say, all right, so we definitely got your oil changed, John. You're going to need some breaks too. Has that changed at all? Has that interaction changed? Because you were mentioning the difference between transactional and relationship.

Ken Mauldin To me, it really hasn't yet. It's still having a conversation with the customer, letting them know what's going on. There are other avenues that you can go down to, such as videos and pictures, and we've used that a little bit and we're actually probably going to dive a little bit deeper into doing that. But at that same time, that's why I said it's maybe more transformational than transactional because the beginning stages of it has transformed some from what we're used to. But the initial stages are still the same. You're still having that conversation with that customer. You're still letting them know that this is what we need to do. This is what you need to do in the future, that type of thing. And then obviously, when they come pick their car up, you're still having that one-on-one time face to face time with the advisor at that point.

Greg Uland Are you having any luck or are you doing anything? Because I've talked to a few people that have. Are you doing anything with kind of remote approvals and things like that outside of that phone conversation where you're sending maybe a link to the work that needs done? You mentioned pictures and videos, right? So the advisor sends it off to the customer, takes it to him or something. Are you doing any of that right now?

Ken Mauldin Yes. We do have the ability to be able to email or text that multipoint inspection over to the customer for them to look at. They can actually approve it that way. They can even pay for their repairs and everything online through obviously our link through Reynolds and then actually can arrange to have pick up after hours, that type of thing. So we do pretty much everything we can to accommodate whatever the customer needs at that point.

Greg Uland Yeah. Well I think about it and it's like, if you're at work as an example, or running errands or running your kids around or whatever it might be and your phone rings and it's a number that you don't recognize. Probably not going to answer it, right? So then the advisor leaves you a voicemail. Give me a call back. Well you're busy. So it's 3 hours before you remember to call them back, right? Or maybe they call you back again and leave another voicemail. And so eventually you get back to them. But let's say, drop your car off at 7:30. It gets on a lift, at ten the inspection's done. They call you at noon and you don't connect with them and call them back until four, 3:30, whatever. And then as the consumer, I'm going, well, I'm still going to have my car back at 5:30. So, we've got to order some parts. And so it just seems like a friction point of the voicemail game and all that.

Ken Mauldin Yeah. One of the things we have done is we have implemented texting. We do a lot of texting to our customers and it's actually seemed to work very well. And we looked at it, we talked to quite a few people about it. And at the end of the day, if you get a text message on your phone, you're going to look at it. You may not know the number on the phone. You may not answer the call, but you're gonna look at your text message. So that has helped us tremendously. Between that and the way we schedule our appointments, customers know they have a pretty good idea of when they're gonna get a phone call. Because we said when we set appointments for our stores, we said true appointments. They're set for the technician, not for the advisor. So we booked time. So they know that they have a 10:00 appointment, they know the car is going in the shop at 10:00. They know within an hour or two they should be receiving a phone call or a text message. And text message seems to be working a whole lot better.

Greg Uland And to your point, you're going to at least read it, whether it's on your phone, whether it's on your watch, in some cases, you see it, it buzzes. And just that natural reaction is oh! That makes a lot of sense. So then when you think about that too and you mentioned well, I want to dig into the technician side a little bit, you said scheduling time. And tell me, I don't put words in your mouth, but it seems like everybody I talked to has some sort of capacity issue, right? Either they don't have enough techs, they don't have enough bays or both, some combination of those. So how do you expand capacity without being open 24 hours a day?

Ken Mauldin Well, I think here's what a lot of people don't realize is that, and I was just as guilty of it up until a few years ago when we switched over our programs. But the norm was to schedule a service advisor. Schedule one appointment every 15 minutes for a service advisor. But you're not thinking about what can your shop actually handle when you do that. So when we changed ours and we completely reversed it, flipped it over. We literally, I don't want to say we never have carryover, but we have very few carryovers every day. Most of our cars get done. The typical reason that we'd have a carryover is parts issue if we can't get parts or if it becomes a much bigger job once we actually diagnose the car. So with that being said, once we started doing that, we realized, okay, now we can take on more capacity.

Greg Uland So it's almost counterintuitive, though.

Ken Mauldin Absolutely. We've looked at a lot of different areas, a lot of different ways to be able to bring more in. And at the end of the day, you still have to have your technicians, you still have to have people to going to produce and actually do the work. But if people would step back and just look at their scheduling process and how they're doing it, you can do more with the current people you have.

Greg Uland Yeah, that's true. Well, and so take that a step further. You have techs. How many lifts does a tech get?

Ken Mauldin Most of them are getting two. Some of them are down to one, depending on your production levels and depending on what your skill level is. Our master techs will typically have two only because take for instance, they get a car that needs an engine. They've got to tear it down for diagnosis, right? So you can't really realistically move that car. So they're going to have one stall that could be tied up with a car and the next stall they're using to work on different cars while they're waiting on parts for this one.

Greg Uland Okay. So you got two or one and a half bays per tech. And how do you manage efficiency in the bay? So thinking back five years ago. And you think about dispatching the work, you think about the technician getting a quote from parts and think about walking that quote to the advisor. You think about then the car sitting there waiting to hear back from the advisor. How do you maximize the use of every bay that you have? Because that's another one where it seems like everybody's expanded their bays, their footprint. Over the last ten years, pretty much everybody's built something on to their shop, whether it's a quick lane, whether it's something. So how have you managed to maximize capacity for each bay?

Ken Mauldin To me, it's all about the simple things you need to look at. Again, we go back to technology. Technology plays a major part in this. If you can keep a technician in the stall and keep him working, that's the goal. So any time a technician is not in the stall, and the perfect example of a technician is standing at the back parts counter waiting on pricing, having to walk the repair order to the advisor. So if you utilize the tools that we have out there, most of your DMS has these tools. If you utilize those tools to do electronic MPIs, conversate back and forth between the computer with the advisor and the tech, you will become more efficient. And at the end of the day, we talk about this all the time. If the tech is not under the car turning a wrench, nobody is making any money.

Greg Uland You're right. You have them using phones. And so you mentioned electronic MPI. So some will use a PC or a laptop right in the bay. Most are going to have that anyway for diagnostic needs and things like that. Then some are going to phones. I've seen glasses with a voice recording thing on them

Ken Mauldin I've heard about those.

Greg Uland So yes, it's all kinds of neat stuff. What's worked the best for you? Is everybody pretty much on a PC?

Ken Mauldin Most of them are on a PC. Now we have a couple of them that do use their phones, that type of thing. And again, with our group, for instance, we have fixed ops roundtables of our own every month with all my guys. And it's basically a conversation amongst us and what can we do to move to the next level? What can we do to be better? And some of the conversation has come up about having different things like almost a virtual stall where, like you said, technicians could be wearing the glasses with the lights and the cameras and the recordings and actually having a conversation with the customer as they're walking around the car doing the work on the car. Actually changing the oil and talking to the customer back and forth if they want to be interactive that way. Pretty cool. But there's a lot of things we've talked about and we're looking at that I think the future is going to probably bring.

Greg Uland Yeah, that's neat. So when you think about that and you think about the future and you mentioned the shift from all the way on the one end of the spectrum being relationship business to maybe it's not all the way to the other end being a transactional business, but it's certainly moving that way and pretty rapidly. So you think towards the future. What does that mean? You think about the people and the advisors and how do we make sure that we're still able to add value? And it's not just like, yeah, I'll click the button for the person that can get it done the cheapest, fastest.

Ken Mauldin One of the big focuses we've had is customer time. How can we manage customer time and how can we do that better? One of the things we've done at our stores is we've implemented mobile repair. We all work long days, we all have families. We'll have things going on all the time. Most of the time, car maintenance is the last thing on their mind, but the day that car breaks, it becomes the first thing on their mind. Now it's a priority. Now it's a problem. So about a year and a half, two years ago, we started focusing on mobile repair. What can we do to help the customer again manage their time, still be able to do what they need to do, but yet at the same time still able to do what we need to do too. So we have launched mobile repair in all of our stores. We have mobile trucks. A matter of fact, I'm getting ready to build a fourth mobile truck now and customers have really taken to it. Customers really like it. We can go to their job, take care of their maintenance and everything while they're at work. We can do it at their house. And it's a pretty interesting concept and it's really starting to gain some traction. And we're looking at possibly trying to get into businesses where we can go to a business say every Tuesday I'm coming to your business. And we could have quite a few of them lined up. So they know every Tuesday, I can get my oil changed next Tuesday while I'm at work, I'll just schedule it for then.

Greg Uland Yeah. So there's this dealership out of the Phoenix area and they're just down the road from a children's hospital. So a lot of employees at the children's hospital, and this has been implemented in different ways, but this one sticks in my mind. But they actually installed a kiosk, like you mentioned, across the street from the dealership, kind of in the vestibule of the hospital. So the employees at the hospital, E.R. nurses, and everybody that works there can schedule oil changes or whatever they need to, and they can drop their keys off and check in and the dealership can come over, grab the car, do the work and take it back. And to your point now, you can even evolve to a place where you do the work in the parking lot.

Ken Mauldin Absolutely. And that's what we're working on now. We're actually working with a couple of hospitals now that we're trying to get that process set up and see what that's going to look like.

Greg Uland It's interesting. So one of the things, one of the hesitations that I've heard and seen a lot of with mobile service is what type of work can I actually do? So for you and you said about a year and a half, so you probably got a pretty good idea at this point. But what type of work are you able to do? What type of work do you want to do? 

Ken Mauldin And that's the key right there. Because you've got to realize that. Some of these things especially and one of our concerns at the very beginning was, okay, we're going to go into customer's homes. We're going to be doing this work in their driveway.

Greg Uland And they might be at a slant.

Ken Mauldin Right, so we take a lot of precautions. Our guys are trained very well, number one, to be safe. But number two, to ensure things like the last thing we want to do is drop oil on a driveway or have an accident or something like that. So we've taken the necessary precautions to ensure that doesn't happen. And knock on something, we have not had that happen. So I think the ones that are looking at the mobile repair, you really need to look at the fact that you can do the basic things, you can do the oil changes. We do all the tire rotations, filters, batteries, wipers, that type of thing. And we do tires.

Greg Uland You do tires like at someone's house?

Ken Mauldin Yes, we do tires.

Greg Uland Okay. So how does that work? Do you have like a coach machine in the back of the van?

Ken Mauldin There is equipment. This one we're getting ready to build is going to have the tire machine, it's going to have the balancer. We're actually looking at doing brakes and putting a brake light on there, that type of thing. So luckily, we're owned out of Costa Rica and we actually have quite a few dealerships in Costa Rica and they already do mobile repair and they're set up this way. I already know quickly I've got the backing from them that I can utilize their knowledge of what they've done, and that's what we're implementing now here.

Greg Uland So how big are these? Well, I'm fascinated now, how big are these mobile tire machines? Because I go back to my childhood. I grew up in a parts store and we used to literally put a stopwatch on each other to see how fast we could get four tires done. But that's when a tire machine was bigger than the space that we're sitting in. You got to two pedals, right? One to break it down, one to spin it around.

Ken Mauldin That's how I started. I started in the business with discount tire, changing tires when I was 18 years old.

Greg Uland There you go.

Ken Mauldin So it was like a pit crew at that point.

Greg Uland So, yeah, it was fun. And if you get it done quick.

Ken Mauldin They're completely different now. But we use on our equipment and you can actually set up a full sized machine inside these vans along with a balancer if you set it up the correct way. So that's actually what we're working on building right now. It needs to be a high top van, but you can actually put these machines in there, set it up correctly. So literally, you can do tires on the side of the road if you had to.

Greg Uland That's amazing. I actually went back and put tires on my wife's car. But that shop, he's got both machines bouncing in and he's got the tire machine in it. Even the stuff he's got is so much different than it was when all the technology.

Ken Mauldin At our stores now, we have road force balancers, things like that. Those balancers communicate with your computers and things you pronounce, that type of thing. It's definitely come a long way from the old machines like you're talking about.

Greg Uland So you mentioned Hunter. Are you guys using any of the integration, not to make this a commercial, but I'm fascinated by the integration with the Hunter machines. So the tread depth machines, also the alignment machines that come on over to the kiosk and push it into the MPI. Are you using any of that stuff?

Ken Mauldin Oh, yes. All the stores are set up the same. We invested about a year ago. We put in all of the alignment checkers, the tread depth checkers at all of our stores. It integrates directly with the kiosk. My service manager here in Dallas has done a really good job with his. He took it one step further with his kiosk and actually hung a 40 inch TV next to the kiosk and something I never knew. Did you know that you can buy a trim ring to put around these TVs that turns them into touchscreen computers? Yes, you can. Very cool. He found this. He did this. So literally, we have a trim ring around the TV. He put a computer behind it. You can really touch the screen. So when a customer walks up to check in on the kiosk, the Hunter stuff is already up on the screen. The girl clicks on it, it brings up their alignment checker and printout, and it's all right there. So she's actually watching it while we're getting ready to check her into the kiosk. So it's made a huge difference in the alignment sales, the tire sales, that type of thing.

Greg Uland Well yeah, visuals sell. And then when you can explain what that means with some sales tools, why an alignment is important. Not everybody knows that. But when you can show them what it's doing to their tires and you're at 35,000 miles.

Ken Mauldin Anybody that lives here in Dallas and sees all the road construction we have, you need alignment. I'm just telling you.

Greg Uland That's fair. All right, Ken, we've kind of went all over the place. What haven't we touched on that you want to talk about yet today?

Ken Mauldin That's pretty much the gist of it. As a group and again, with my roundtables and things like that with all of my team, we constantly focus on what's the next step, how can we make this even better? What can we do again to manage that customers time to make that experience a little bit better. And it's a struggle for people that have been in this business for a long time, even myself included. I had to reevaluate myself just a few years ago about how much this business has changed over the last few years and really where it's going. This market is changing daily. Customer expectations are higher, but they're also different, meaning that they're not necessarily looking to sit and talk with you about your family. They're really more concerned about, okay, how much and how soon can I get out of here? Because I've got ten things going on with my own family now, right? So it just seems like everything's moving at a much faster pace and us dealers, us as service departments, we have to move a little bit faster than them if we want to keep up.

Greg Uland You're right. Well Ken, I really appreciate you taking time to talk. It was a great conversation and appreciate all you do for us and for the industry and being open to this kind of stuff. So thank you. Have a great rest of your show.

Ken Mauldin Thank you. You too.