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Investigating Telematics

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Just saying the word elicits a quick reaction, says Donny Seyfer. And, rarely, are those reactions rational.

Telematics.

It’s the one piece of technology that will destroy the repair industry as we know it—or is it the independent shop’s savior from an industry destined for increased consolidation? Is it the front counter’s ultimate customer retention tool? Or is it the automaker’s secret weapon to keep cars returning to dealerships?

Seyfer’s answer: It’s all of them, and none of them—all at the same time. 

“[Telematics] is like a giant octopus with tentacles reaching out in every direction, each as strong and powerful as the other,” Seyfer says. “It’s so complex and so new that no one seems to have a good handle on it yet.”

Seyfer does, though, as he’s become the repair industry’s foremost source for all things telematics. Never mind that he runs a successful, long-standing family shop in Wheat Ridge, Colo., Seyfer has led research-based studies into the effects of telematics on the aftermarket for various industry organizations. He’s testified as an expert in other projects, he’s aided legislative and regulatory efforts, and he organized and moderated a speaker list of telematics bigwigs for the Automotive Service Association’s technology and telematics expo at the 2014 NACE/CARS show in Detroit last summer.

The issues—or perceived issues—with telematics, Seyfer says, come from the average person’s inability to properly define and understand it. 

And that’s not limited to the repair industry. Telematics regulation is a new, rugged frontier on which no entity has begun truly enforcing rules, Seyfer says. It’s a modern day Wild West for the automotive aftermarket, and the coming years could prove to be critical in terms of regulatory precedent. 

“But, as an industry, the automotive aftermarket isn’t in a place to talk to customers about their privacy and their data; that’s not our place,” Seyfer says. “What we should be concerned about is diagnostics, and repairing those customers’ vehicles—and how we can use telematics correctly for the benefit of everyone involved.” 

The solution to this complex issue, Seyfer says, is actually quite simple. And it starts with understanding.

Defining the Undefined

Back to that octopus analogy for a moment: By its literal definition, telematics refers to the combination of computers and wireless telecommunications technology, often to deliver information over a given network. In terms of telematics in vehicles, that could mean a slew of features from hands-free phone calls to Internet-based radio (like Pandora or Spotify) to driver-assist features (like self-park and adaptive cruise control) to real-time vehicle diagnostics.

“So, when we say, ‘telematics,’ what exactly are we talking about?” Seyfer asks rhetorically. “A connected car that gives diagnostic information, or a telephone that’s connected to a car, or a car that can park itself? Of course, the answer is yes to all of that.”

But, he says, that doesn’t mean that’s what it is to the independent shop owner.

Bob Stewart, the manager of aftermarket service support for General Motors, says the focus for the independent repair shop needs to be on vehicle diagnostics. The connection between a service center and a vehicle owner is the health of the vehicle, Stewart says, and that can be the key to making telematics a tool that can improve your business.

“The easiest way to explain it is that it’s the car raising its hand to tell you there’s something wrong,” Jim Dykstra explained to Ratchet+Wrench in 2014. 

Dykstra is the owner of a three-shop, $3.8 million repair business in Michigan, and he also runs an offshoot telematics company that can track repair needs of his customers.

“Imagine the advantage of knowing your customer is having vehicle issues at the same time or before they even realize it,” he says. “We can make basic, initial diagnosis [based] off the code, contact them and either tell them they are fine or set up an appointment.”

It’s a great concept, which is why dealerships are already doing this—and why many fear that telematics will leave independent shops on the outside looking in.

The OnStar Effect

GM first began putting OnStar systems in vehicles as a dealer-installed option in 1996. Not only has it grown significantly since that time, but it has also launched a wave of similar features put into vehicles by other automakers. 

As of mid-2014, OnStar processes an average of 4.7 million turn-by-turn direction requests per month from its users. It processes roughly 4 million sent emails, 3.6 million app requests, 139,000 door-unlock requests, and 4,212 automated crash responses per month.

Those numbers were given by OnStar COO Terry Inch during a speech at 2014 NACE/CARS, and Inch went on to say that OnStar is now focused on enabling its devices to analyze diagnostic and maintenance issues.

BECOMING A TRUSTED ADVISOR: Parker Swift founded Mechanic Advisor to help educate consumers on their vehicle service options. In late 2014, Mechanic Advisor launched its first telematics device (inset) that can diagnose vehicle issues and alert drivers. Mechanic Advisor is not alone in this space, as Swift feels more and more options will emerge as consumer demand continues to increase. Photo courtesy Mechanic Advisor

GM was the first to this telematics space, and Stewart says it clearly gives the automaker a large advantage in the telematics race. However, he doesn’t feel that it gives dealers a greater advantage over independent shops.

“The biggest thing, for us, is that the customer still has the choice,” he says. “And, really, the bottom line is that there are too many vehicles on the road for GM to service through its dealerships. We need independent shops to keep those vehicles going.”

An Aftermarket Answer

The customer may have the ultimate choice, says Parker Swift, but tying diagnostics and telematics devices to a dealership makes it an uphill battle for independent shops.

That’s where Swift feels his company comes in. He launched Mechanic Advisor in 2006 as an online resource for consumers to search for and find local repair shops based on business-specific information, such as specialties in makes, models or certain repairs, as well as certifications, hours, and customer reviews. In late 2014, Mechanic Advisor released its aftermarket telematics device that links to a vehicle through a dongle hookup in the OBD II port. The system can detect any OBD II codes and send information directly to drivers via a mobile application. It then assists them in finding a shop through its database of more than 500,000 shops and individual technicians in all 50 states.

“We’re not trying to turn customers into mechanics,” Swift says. “But we are trying to give them as much information as possible to make more informed decisions about their vehicles—teaching them when to bring a car in, when to have it serviced, all these things.”

Mechanic Advisor is far from alone with this aftermarket concept. Dykstra’s company works in a similar fashion, and then there are larger players like Zubie, which recently signed a partnership with Progressive Insurance.

Navin Ganeshan, vice president of product for Zubie, says his company has the same focus many repair shops do: keeping drivers safely on the road and in control of their vehicle decisions.

“The biggest thing is making sure it’s the customer’s choice,” Ganeshan says. “We want to be an independent source for this information, and we want them to make their own, independent decisions in serving their vehicles.”

Staying Connected

So, how do shops ensure they aren’t cut out of this diagnostic-communications loop? It’s pretty simple, Seyfer says. 

First, as Swift points out as well, shops can sell these aftermarket options to their customers and be the direct go-between for the telematics devices. And when a technician or service advisor sees a device in a vehicle, they can talk about it with the customer—educate them on their options, inform them that they can set your facility as their default shop and have reports and alerts sent to the shop, as well. Teach them about the link between the diagnostic information they receive and regular service intervals.

“An educated customer is to the benefit of every shop,” Seyfer says. 

And, learn to install and repair all these features in the vehicle.

This is an enormous area of opportunity for independent shops, says GM’s Stewart, a former technician himself. 

“Shops today really need to have an electric focus,” he says. “Advanced scan tools are a must.

“There’s been some reluctancy with working with computer systems, and that comes from that initial reaction of distrust; a technician can’t see or touch the problems, and that creates that hesitancy. But, you have to be equipped and trained to do that today.”

GM, Stewart says, has all repair information on its electrical features available to any shop with a subscription.

‘Follow the Money’

A memorandum of understanding was signed in early 2014 by multiple parties representing each segment of the industry. The national agreement was based off language in Massachusetts' Right to Repair legislation, and could help establish a precedent that independent shops won’t be locked out of the telematics race, Seyfer says.

“I think we’re firmly established as part of the loop now,” he says. 

Stewart, Ganeshan and Swift all agree: Independent shops will have an opportunity to use telematics to their advantage long term.

Telematics will go where consumers want it to, Seyfer says. Just “follow the money” to see what customers really want.

So, Seyfer says it’s time to drop the gun-shy opinions of this rapidly developing technology. The future of telematics maybe be murky, he says, but each shop can choose how it reacts.

“You can be underinformed and scared of it and just try to stay away,” he says, “or you can be educated, jump in and push your business to the future. Everyone has to make their choice.” 

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