Aug. 30, 2024 | GM faces class action over faulty transmissions; Pied Piper CEO Fran O’Hagan

with nearly 5,000 Specialists dedicated to supporting dealer Financial Services Alli has the expertise to help you with your Retail Finance fnii and remarketing needs we're all better off with an ally contact your local Ali account executive to get started today Ally do it right want to dive deeper into the topics you hear about on daily Drive we're offering listeners a special offer 20% off a one-year Automotive news digital subscription that gets you access to all of our news information and Analysis made for automotive industry leaders like you go to autonews.com daily Drive promo to redeem welcome to daily drive for Friday August 30th 2024 I'm Jake nearer in Detroit in for Jamie Butters and I'm Kellen Walker in Las Vegas today on the show GM will face a class action lawsuit over faulty Transmissions Chinese automakers see sales Fall in Europe after tariffs and Audi gets a new sales boss plus pi Piper CEO Fran o'hagen joins the show to talk about the company's latest survey to gauge how well dealerships are doing with service Drive customer satisfaction about half the time industrywide customers hang up the phone having accomplished what they set out to accomplish let's run through Au the news you need to know to keep up in the Auto industry a federal appeals court has ordered General Motors to face a class action lawsuit over faulty Transmissions the lawsuit claims GM violated laws of 26 US states by knowingly selling several hundred, vehicles with faulty Transmissions the 6 us Circuit Court of Appeals in Cincinnati said a lower court judge had discretion to let drivers Sue in groups over Cadillac chevret and GMC vehicles equipped with 8 l45 or 8 L90 8-speed automatic transmissions GM sold the cars trucks and SUVs in the 2015 through 2019 model years drivers said the vehicles shudder and Shake in higher gears and hesitate and Lurch in lower gears even after repair attempts they also accused GM of telling dealers to provide assurance that harsh shifts were normal GM did not immediately respond on August 29th to request for comment by Reuters new ter in Europe seem to be taking a toll on Chinese automaker sales in the market according to research group data Force Brands including byd and saic's mg accounted for 9.9% of EV registrations in the region that's down from 10.2% in July 2023 Chinese automakers in their European counterparts that import battery electric cars into the European Union have been scrambling to adjust to the introduction of new tff tariffs on July 5th that raised duties on Chinese made EVS to as high as 48% tariffs aren't the only thing affecting those sales overall demand for EVS continued to weaken after Germany Europe's largest auto market removed incentives late last year leasing has grown to a quarter of the retail market for the first third of 2024 saian Merchant is senior vice president and auto leader at TransUnion he says that Trend should help with customer retention for a few years in the future about three years later they're going to come back they're going to turn in their vehicle it creates a used vehicle inventory for the dealer you know a certified pre-owned vehicle that they can remarket um obviously the the consumers coming back in they'll often stay loyal and and Lease again and that again is a new vehicle sale for the dealer and then the consumer is happy and they just kind of repeat this cycle the 25% leasing rate for 20 24 through April is an improvement from the 21% in all of 2023 and the post-pandemic low of 18% in the first quarter of 2022 that's according to S&P Global mobility and Transunion but it's not yet back to the 30% penetration of prepandemic 2019 and Audi's Global head of sales Hildegard Wartman is leaving the automaker Porsche executive Marco Schubert will take over the role according to German press reports Wartman has led Audi sales for the past five years after joining the Volkswagen group premium brand from BMW the company says she's leaving Audi at her own request the 50-year-old Schubert has been in charge of Porsche's European sales since 2021 previously he was head of Audi sales division in China Schubert began his career with mercedesbenz and those are today's headlines coming up Pi Piper has a new survey about customer satisfaction at dealership service drives CEO Fran o'hagen joins us next on daily drive for over 100 years Ally has helped dealers like you serve your customers by providing the best-in-class products and services you need and by remaining true to the automotive passion we share your dedicated Ally account executive will work hand inand with you to help you gain efficiencies increase your product offerings and work to improve per vehicle Revenue because we care about your business as much as you do we're all better off with an ally contact your local Alli account executive to get started today Ally do it right welcome back to daily drive I'm Jake near with Kellen Walker it might seem like a small thing but a dealership service Department's customer retention begins with answering the phone research firm Pi Piper studied how well each of the largest dealership groups did answering customer calls and making appointments Pi Piper CEO Fran o'hagen discussed the study's results with Automotive news senior editor Dan shine Fran thanks for joining me on the fixed Ops Friday version of daily Drive hey my pleasure you were here not that long ago talking about uh service telephone Effectiveness when it comes to Brands Auto groups now we're kind of getting into the actual dealership groups um and you've got a new you know's s uh out there the service telephone Effectiveness study um first tell me a little bit about how you go about conducting this study uh who is called and what are you ask on that kind of thing sure so probably a good place to start is to think about how fixated we in the Auto industry have been on customer satisfaction service customer satisfaction you know we've measured it all kinds of ways for decades but if truth be told what we really care about is loyalty and we've been using sat customer satisfaction as a proxy to measure loyalty and um if you think about it we really care about what customers do rather than what they say so you may say you're satisfied but really what I'm interested in is are you going to continue to keep bringing your car for service at my dealership or are you going to repeat purchase at my dealership and there actually was a brilliant example of this that's non-automotive um it's Netflix so if you think back to Netflix when they would mail out the DVDs you know they would initially they would ask you well what kind of movies would you like in your queue and you would say dramas right and but what they found out was you really would watch romantic comedies and there's this great quote uh one of their data sign said the algorithms know you better than you know yourself and it's just a great example of paying attention to what customers do rather than what they say and that's really is what service telephone Effectiveness is all about so service telephone Effectiveness matches up dealership behaviors with service customer loyalty and says hey when customers call you on the phone these are the things you as a dealership can do that will generate loyalty because what we're told by the dealer groups is that if you lose a customer if they can't get through or whatever reason they use somebody else to buy their tires or somebody else to do their oil change they're gone especially if they're you know five six seven year old cars y so it's super important part of the business and there's been this black hole there hasn't really been anybody measuring what happens you know factually what is the customer experience when they try to call and and uh schedule an appointment and so that's what you studi call all these top uh how many groups and all did you call 20 of them top the top 20 and call them up I want to oil change or I want to check engine light checked or whatever it might be and then you just kind of measure how quickly to answer whether they can schedule the appointment right away if they make it through the whole phone maze all those kind of factors kind of go into a cumulative score that's exactly right so part of it is from the customers perspective you know you think about it just with us if you're calling to schedule service really you're only looking for two things you're looking to speak to somebody quickly and to get an appointment that isn't too far out and if you get those two things you know you hang up the phone and you're happy Y and two-thirds of our scoring is based on just those two measurements but what we know is there's a quality component and the quality component is also very important in driving loyalty and those think of it as proactive helpfulness those are things that the dealership can do that will set them apart and will make the customers keep coming back I mean just an example would be saying hey do you need a ride or do you need a service loaner or you're a first-time customer this is what you can expect what drive your car into the lane and someone will come out and greet you or whatever it is interesting so uh I'm guessing like any other of your stud there's the good the bad the ugly how overall how did these groups do so we measured 20 we added three more that I believe we had not measured the year before this is the second year for the study so not only can we say this is how they rank we can also say this is how they have changed from last year uh overall the average for the large dealer groups they improved two points from the previous year uh the the dealer groups that were on top Sarah automotive and Michigan Napleton from Chicago burshire hathway group one those were the top four uh of that of the top four the one that really stands out is Napleton who improved their score or their ranking I should say from dead last a year ago to Second this year wow and when you do you kind of follow up or with folks like from Sierra or Napleton to kind of see what they do or or you are you able to kind of kind of find out what that secret sauce is that they're doing to to make make that kind of that jump from dfl to yeah second so for for some of them absolutely um many of the dealer groups that perform well are our clients so we provide ongoing measurement and Reporting you know several times a month for each of their dealerships for service telephone and for those uh the dealer groups we're able to you know see inside the tent and figure out what actually is happening other ones not so much and this isn't all I mean when you make a call some dealership groups you're going to go to the BDC The Business Development Center kind of a call center where a bunch of people will answer the phone sometimes you going straight to a service adviser's desk and if hopefully they're there and they'll pick up is if you're finding that both these groups the good and the bad are using both of these approaches that's a great question so I would say it is easier to be a top performer having a BDC handling the calls through the BDC than it is to be a top performer handling the calls decentralized at the dealerships but there are definitely great performing dealer groups who are decentralized and they're great performing ones that use bdcs I mean Napleton is an interesting case study for that because a year ago when they finished de last they were not exclusively using a service BDC um and they improved their customer experience pretty dramatically by shifting more toward using a BDC to handle their service calls and you you have little categories too about Mission you know Michigan Mission acceptable Mission failure I don't if there's a mission accomplished in there as well tell me a little bit about how those Stack Up and what's what the kind of criteria is sure so Mission failure as a customer means that I hang up the phone without an appointment either I never could talk to anybody because I was put on hold forever or I got lost l in a phone tree or they just never answered the phone uh they put me in voicemail that happens about one time in 10 using Napleton as an example last year for them it was three times in 10 the customers were hanging up no appointment uh this year it's one and 10 wow and Mission acceptable is you get a a little a little bad not so bad a little bit of good see yeah so Mission acceptable is really Through The Eyes of the customer so the customer wants two things to speak to somebody quickly we say within a minute and to schedu to get an appointment that isn't too far out we say within a week so about half the time industrywide uh customers hang up the phone having accomplished what they set out to accomplish and kind of wrapping up here you know it's it's a phone call it's just a phone call right but it's but it's more than that to a service department right this is an important aspect of your customer service and how you treat customers and it probably it's not something that a Department should be ignoring no without question and the other interesting thing is the industry is moving more and more toward online service scheduling right now it's between 35 and 40% of all online or all Service uh appointments are scheduled by the customer online but we found something very fascinating so we measure both of those for some clients and we found almost without exception dealerships that do well by phone also do well online but the the opposite is not true you can do well online and be terrible on the phone so it yes it is important to pay attention to what is going on when customers are calling to schedule appointments FR always enjoy the conversation thank you for making the trip to Detroit always good to see you and uh I'm looking forward to uh hearing more about what you guys are up to thanks so much my pleasure Fran o haen is the CEO of Pi Piper he spoke with our own Dan Shine That's daily drive for today I'm J near in for Jamie Butters and I'm Kellen Walker thanks to Automotive news staff reporter John hutter for his reporting for today's podcast we also had reporting from Paul McVey of our sibling publication Automotive news Europe you can get the latest news on service and parts manufacturing and everything happening in the Auto industry at autonews.com come back over the weekend for our weekend Drive edition of the show our own Mark Holmer joins the show to react to this week's exclusive interview with CD K Global CEO Brian McDonald and update us on everything that's happened with The Fallout from the company's Cyber attack crisis in June they're in the clear for now but they're not saying what caused the attacks and what they're doing to prevent it and that's a tricky spot though for them we'd love to hear from you let us know what you think of the show and the topics we covered today send us an email at Daily drive at 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