Repairs Vs. Upgrades? It’s All How You Spin It!

I recently received a “defect” notification regarding my automobile.  My initial response was negative – another problem with the auto industry! – until I realized this recall notice had nothing to do with safety, or even performance. Instead, the company that manufactured my car wanted to replace my seat covering. Yes, I suppose there technically was a defect there somewhere, but in fact I was given an upgraded car seat. Nothing to complain about there!

Too bad the manufacturer hadn’t added a little positive spin – which is exactly what the smart phone, computer and tablet manufacturers have figured out.  Their “upgrades,” often called “bug fixes,” are actually recalls, right? But we, the consumer, view those defect repairs as improvements, and the software providers are seen as our partners.

It’s hardly a novel approach, but it has to be done correctly. I used a similar tactic while at GE Transportation and GE Power Systems. When I joined those companies, our manufacturing processes were designed primarily for low cost. Based on customer feedback, we moved to a philosophy of design for maintainability and longer equipment life. And, in conjunction with that change, we began offering long-term service agreements. The idea was that no one should be able to provide better long-term service than the original equipment manufacturer (OEM). The benefits to the end user – through performance warranties and increased uptime – were phenomenal. As a result, our customers were more confident in their equipment, and provided our business with a steadier and more predictable services revenue stream.  Even better, the accountability we provided positively impacted not just our customers, but our customers’ customers as well.

Although we pioneered this customer philosophy in the ‘90s, technology today provides even more opportunities to cost-effectively enhance the customer experience with faster and more expedient service offerings.

In the automobile industry, for instance, advanced technologies and software applications can allow manufacturers to work with suppliers and dealers to provide faster and more hassle-free upgrades. Along the way, our view of the auto industry will be enhanced, increasing brand loyalty and image. Customer retention will be significantly enhanced for the dealers and the OEMs, too.

Here’s how it can work: Using cloud computing, sensors, and advanced software, the manufacturer and dealer can coordinate with the supplier to expedite the availability of replacement or upgraded parts, based on the installed base of the defective cars or trucks. In fact, with Big Data, we can know the exact installed base of those vehicles. In the near future, we will be able to aggregate the service bays and technicians in that marketing area and maximize the utilization of those resources in conjunction with the supply base. A service time will be assigned automatically to the customer, or the customer will be able to choose a convenient time for the repair. This seamless approach between the OEM, the component supplier and the end customer will significantly enhance customer satisfaction, reputation, brand image and future product loyalty. 

None of this is as glamorous as the driverless car, but these technologies have a broader and deeper application for the consumer in the very near future, including for Uber and Lyft drivers. That’s evidenced in the recent investments of Toyota in Uber and GM in Lyft.

In fact, the software applications that can make all of this work are being created right now. The possibility of seeing a problem before it even occurs through remote monitoring and diagnostics is on the horizon, too.

Obviously, all of this comes at a cost, but large corporations should be able to amortize those. Eventually, the technology will trickle down to the local entrepreneur, who will be able to subscribe to an app and provide this seamless approach.

Some industries are already working toward this goal. Even the often-maligned cable companies are attempting to offer better customer service by providing shorter windows for repair times. Soon, the days of waiting all day for a repair person to show up will be a memory.

The idea is to create harmony, rather than discord, between the customer and the manufacturer or service person. The often antagonistic service approach of the past can and should be replaced with a partnership.

It’ll be a win for all.

During his 45 years in the business world, Bob Nardelli has grown the sales and profits of a number of multi-national corporations including the General Electric Co. and The Home Depot, and he helped save Chrysler and its iconic brands when the American auto industry began to collapse. In addition to his board and volunteer service, he is the founder of XLR-8, LLC, Investment & Advisory Co., which helps companies identify weaknesses and improve performance. Read more about Bob at www.bobnardelli.com.