A short video discussion (Service Driver Revolution) where Chris Collins and guests explore how subscription models and vertical integration (manufacturers or insurers running service centers) can benefit automotive service departments. They discuss differentiation in subscriptions (guaranteed appointments, valet pickup), examples of companies controlling input/output to capture value, and operational tactics like lifetime alignments to smooth seasonal workload. The clip ends with a call-to-action for viewer questions and resources.
Chapters
Foreign.
Let's say you have a shop or a dealership or a service department or whatever. And I have one and you're charging $300 a month as a subscription for any maintenance or repairs that are needed on a car and I'm charging 300. What would differentiate you from me?
You could pick a bunch of things. You could say guaranteed appointments. You could do valet pickup service. Like you could have a 24 hour hotline.
Well, that's a good point. Cause what'll happen is kind of like in certain scenarios with healthcare or in countries that have healthcare. Yeah, your kidney replacement's covered, but you gotta wait six months or whatever it is. Right. So. Cause they're booked out. So you could say guaranteed next day.
Yeah. There's a lot of different things you could do, but you'd want to let them know that. And the end of the day is just. It's about peace of mind and why I'm the best place to do it. But I think it would be really easy to come with a bunch of differentiating factors of why my subscription's better.
You know, insurance companies could get into that. So geico, they could get into that in a sense. Right. They could have their own service departments. Because isn't that what Kaiser Permanente does in a sense is they're controlling the input and the output. They're saying pay us for health care, but then you have to go to them and then they're controlling their costs.
Because if they mark something up, they're marking it up to themselves. So like if you have a normal health insurance and you go to a hospital, the health insurance is like an extended warranty in the sense that they're.
Paying the hospital and it's all pre negotiated rates on, based on the job and everything like that.
Yeah. Which is kind of like.
Kind of like what, what is happening right now with we own Manheim, we own cars dot com. What else do they own?
Kbb?
Yeah. So Cox owns Kelly Blue Book, they own Manheim. So they're setting, they're setting the, the value and they're controlling the value at the auction. So if cars are out of whack, they can slow roll them and have them sit somewhere. Right. They can no sell in an auction. So they can control the value of the cars.
It's also like if they own it, if they own the, the auction and the reporting thing, they can make those numbers whatever they want them to for the customer. Right. That's so great.
Yeah. Somebody on a keyboard can just type in a number. It doesn't necessarily have to. And we're not saying that they're doing this, but we're saying it doesn't necessarily have to be based on what the auction is doing.
Ye going to fact check it.
Where historically they were separate entities.
Yeah, that's super interesting.
So if you're, if you're an insurance company or you're a parts manufacturer.
What would be a better way to control what you can sell the parts for? Like remember when we had the. I forget his name. But the kid who's dad started Atari.
Oh yeah, what was that guy?
He owns two bit circus down here. And so he was, we were talking about things he learned from his dad or whatever. Right. And he was saying that when his dad owned Atari, he would wholesale the, the consoles, the video game console. So like Centipede, Donkey Kong, whatever it was for like fifteen hundred dollars to these middlemen that then would lease them or sell them to arcades for 5,000 or sell them to grocery stores. Remember you go through the grocery store or Pizza Hut. Yeah, There would be one. And he said what we need is we need another company that's an arcade that we can sell the machines to for full retail. And so he started Chuck E. Cheese so he could sell his games to Chuck E. Cheese for full retail and cut out the middleman and name the.
Price he buys it for.
So I know this is really forward thinking, but kind of think about this in the sense of our industry is ripe for a parts manufacturer, for a big insurance company to come in and say we're going to include the repair and maintenance and we're going to open up our own repair facilities so we can control the input and the output. And we only have to do it in LA and New York to start. Right. I mean just think if you had 20 of them in LA and 20 of them in New York, that's, that's enough to prove the concept.
Yeah. And that what a great business lesson in terms of. The key to success is controlling the input and the output. Like you just. You limit the variables.
Yeah, yeah.
That's funny. You know, you were talking about the doctor. I think I'm actually going to get a new doctor because I went to mine last week and this guy told me, he said I've got antisocial personality disorder. At least I think that's what he said because it's hard to hear him over the duct tape.
And segue.
Thank you.
The other thing that made me think about this with this car company coming in is I was doing a strategy session and I was talking to somebody about doing lifetime alignments. So, you know, tire season's coming up and oftentimes what happens to a lot of, a lot of service departments in the northern part of the country where snow is an issue and you have winter tires is they will have a huge influx of customers to get the winter tires put on and they'll have a huge influx of customers to get the winter tires taken off.
Yes.
So it peaks twice a year. And so what happens is that peak will overrun the service department in the sense that you don't have enough people to do everything. And you got $30 an hour text doing tires because you're so booked up, you don't, you don't recommend alignments. You're not selling A lot of brakes you take, you start taking shortcuts in a sense because you can't handle the volume. But you're losing that work and they're not coming back three months later to get an alignment or the brakes or whatever. And so we were talking about why not do a lifetime alignment, which we've had success with. We have some clients that love that and it works. And that made me think like, how much are we going to change where things might be more of a subscription based thing where you pay us so much, maybe it's a year, maybe it's a month and then anything you need, you're coming to us.
Which then is secure for both. It's secure for the shop and it's secure for the customer to know you have both.
Thanks so much for watching this clip.
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