I am a big believer in market signals. I think Tesla is one of those signals. As a breakthrough company with a skyrocketing stock value, Tesla is clearly doing many, many things correctly and making very few mistakes. I believe there are some lessons in the Tesla experience that service contractors should be learning.
As context for everyone that lives under a rock, Tesla is a manufacturer, distributor, and customer service company for electric vehicles. Specifically, these are are not your Aunt Minnie’s electric hybrid Prius, or Civic. These are high performing vehicles that have a style about them that does not signal “compromise.”
For those that do not watch the stock market, Tesla is a high flyer. For every $1 in car sales, Tesla (NASDAQ: TSLA) gets almost $10 in shareholder value in return. Contrast that with Ford (NYSE: F), a fine company with very good management, which gets approximately $.40 (yes, forty cents) in shareholder value for every $1 in car sales. The market believes Tesla is onto something special and that it will dramatically outpace all others in this segment – otherwise the share price would make no sense.
Here are the lessons that I believe service contractors can take from Tesla:
The market values products that dramatically lower fuel consumption.
The market is signaling that fuel prices are going to continue to spiral upward. If fuel was going to be $2/gallon or even $3/gallon in the future, Tesla would not even exist. As a service contractor, you better have a strategy to use less fuel per revenue dollar in the future or you will find yourself in a dramatic squeeze. What are you doing to pack more revenue into every mile driven by your techs? Raising fuel surcharges is not the answer. Something along the lines of “plan a better route and offer more value at each stop” is the right strategy. Increase your service revenue density per mile is a lesson from Tesla.
The market values products that require minimal maintenance.
Tesla’s vehicles require far less maintenance than conventional cars. Some of the maintenance is delivered over the air in the form of new firmware for the drive system. All customers want to buy a product that is maintenance free. How will you drive revenue growth for products that require ever decreasing levels of maintenance? Expand your service area? See above on revenue per mile – difficult to do with ever rising fuel prices? Expand your expertise offered to your existing customer base? Yes. Expanding your service density per customer location is another lesson from Tesla.
The market values predictive maintenance with a single point of accountability.
Tesla monitors the health of the cars and initiates service with the customer based upon the exact situation of their vehicle – not some vague timeline. Tesla shows up with a loaner and takes the customer vehicle to the shop based upon setting an appointment with the customer interactively using the Tesla interface in the car. Equipment will be increasingly connected to the Internet (see Internet of Things) and monitored for service requirements by the manufacturer. How will you be the source of knowledge and data for the customer when the customer is connected directly to the manufacturer via the Internet? Collect an extraordinary record of the customer’s service needs via mobile devices, aggregate data to discover opportunities for better outcomes, and use the Internet to connect to your customer is another lesson from Tesla.
The market values a direct connection with the manufacturer.
Tesla sells direct, with the customer doing most of their education and interaction via the Internet. Manufacturers will increasingly connect with customers via highly interactive, multi-media and multi-modal experiences regarding their product and its advantages. What will you do to be a part of that conversation and express to the customer all the things the manufacturer does not know and cannot know because you are the one with the experience on the ground? The answer is not “well I guess the technician will show ‘em some stuff while he is there, before he leaves behind a handwritten, tobacco- and coffee-stained invoice with a bunch of cryptic codes from my accounting system” Wrong answer. You better be thinking about how you express your expertise to your customers online, interactively, with “rich media” and “big data,” because I can promise you that the manufacturers that you currently represent are going to do it. Embrace technology that connects you directly to your customer with rich media and a data-driven approach to service management is another lesson from Tesla.
Fortunately, none of these lessons have to be scary lessons. Yes, manufacturers have big capital to do big things, but they move slowly and spelling “customer service” would be a challenge even if they read this blog post. And big capital is not a requirement for fantastic systems in a world with ubiquitous mobile platforms (smartphones and tablets) and cloud computing.
With just a little bit of cash flow, you can make investments in capability that will cement your relationship with your customer in a world where they value everything I described above that Tesla is delivering. You can increase service density per mile, increase service density per location, collect an extraordinary record to drive expert service, and connect to each customer in a manner that educates them regarding the value you provide. Or you can wait for the manufacturers and other third parties to insert themselves between you and the customer so that every time the phone rings it is a dispatch to “their” customer. You decide.