Chief Learning Officer - January 2008 - (Page 46)

case study Chrysler LLC: Managing Performance of a Diverse Dealership Community Mark Place and John Zonneveld The brand integrity of large automotive manufacturers depends on customer satisfaction. The diverse, independent nature of the automotive dealership channel presents several brand management challenges. Like many large, franchised channel operations, a key to Chrysler’s success is consistent customer satisfaction across all retail locations — a difficult task with approximately 3,600 individual dealerships across North America. A low-performing dealership reflects badly on all dealerships and the original equipment manufacturer (OEM) as a whole. Although auto dealers are similar in that they all sell and service cars, the specific nature of each dealer can vary widely. Dealerships are dispersed geographically in densely populated urban and suburban areas, as well as remote rural locations. Other differences among dealerships include the different brand mixes and service offerings (used, new and fleet sales; Five Star certification; BusinessLink). Another challenge for Chrysler and other automotive manufacturers is the franchise structure of the dealership channel. Since dealerships are not directly owned by Chrysler, the company’s ability to manage day-to-day operations, make hiring decisions and maintain learning programs is limited. Furthermore, service technicians may have the attitude that “their job is fixing cars, not taking classes.” If dealership managers and owners don’t have an incentive or desire to have their technicians take Chrysler training courses, the technicians likely won’t take training, especially if it is outside the immediate domain of solving a car-related technical issue (a customer-service course, for example). To help overcome these challenges, Chrysler implemented two initiatives: a dealer scorecard to track performance and a performance-based approach to individual and dealership certification. The scorecard provides a mechanism for Chrysler corporate staff to track dealership performance on a wide range of performance metrics. The training and certification program provides a mechanism to drive training through the dealership channel and to link training with performance. Challenges These dealer differences present significant customer satisfaction and brand management challenges. With all of these differences, it’s difficult to compare the performance of a small rural dealer mostly selling four-wheel drive trucks to a large urban dealer selling every vehicle in Chrysler’s lineup. The smaller rural dealership may have lower sales numbers than its larger counterpart — a dealership in a growing suburban neighborhood. If the vehicles it sells are more difficult to service, then any measurement of its vehicle repair efficiency may be affected. Is the rural dealership actually less effective than the suburban one? Lower sales would be expected from the dealership in the less populated area, so how does Chrysler make what appears to be an apples-to-oranges comparison into an applesto-apples comparison? Dealer Scorecard The dealer scorecard provides a convenient measurement and diagnostic tool for dealers and corporate personnel. It includes performance measurements along 37 metrics covering nearly all aspects of the dealer’s operation. Reported for all franchise dealers in the United States, Canada and Mexico, typical performance measures include sales volume, financial indicators, measures of customer handling such as sales and service satisfaction, and the level of participation in certification-based training. Detailed reports exist for each metric on the scorecard. Users can easily “drill-in” from the scorecard to view underlying data consisting of hundreds of additional data points and the calculations that were used to derive the final metric. For example, if January 2008 I www.clomedia.com I Chief Learning Officer 46 http://www.clomedia.com

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Chief Learning Officer - January 2008 Editor’s Letter Table of Contents Imperatives Selling up, Selling Down Strategies Take Five Environment Sips of Knowledge at E. & J. Gallo Winery CLO Profile Productivity UST Global: Opening Employees’ Eyes to New Learning Tactics Applying CRM Concepts to E-Learning Human Capital Capital One: Experiences in Innovation Learning Solutions Macy’s: Using Feedback to Develop One Leader at a Time Case Study Business Intelligence Advertisers’ Index Editorial Resources In Conclusion

Chief Learning Officer - January 2008

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