Jim Roche: The Future of Warranty Processing

Fixed Ops Roundtable

Jim Roche is the founder and the executive chairman of WarrCloud - a cloud computing technology platform that automates warranty processing for automotive dealers.

In this show episode, Jim and I talk about the future of warranty processing and how it's a big part of the dealer's business.

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What we discuss in this episode:

Warranty processing has been neglected despite the digital transformations occurring across the auto retail experience. It's likely that you are currently being marketed or have already incorporated a variety of solutions that are all intended to simplify your marketing and business processes so you can accomplish more and close more sales. Additionally, there is a good chance that none of these solutions address warranty processing, which is the most underutilized and antiquated aspect of a dealership's operations.

Jim starts the episode by talking about how to turbocharge your service growth with the objective being profitable growth. With the press recently talking about how some OEMs appear to be positioned to sell vehicles directly or through websites, the hypothesis is that going forward; dealers might become more service centers and delivery centers than the traditional dealer model of today. This brings the question of what the role will be going forward for selling vehicles, leading us to serve as the new profit driver. Excellent service will be the dealership's new profit driver from now on.

So what's driving your service department growth is the warranty, and what's driving that growth and warranty? We're just at the beginning of how much technology is being inserted into the vehicles, and it is that increasing amount of technology and this increasing complexity in vehicles that are the primary driver of this increasing warranty.

Jim explains that warranty processing is one of the few remaining areas of the dealer That have not been streamlined by technology. Automation typically reduces costs by over 50%, but maybe more importantly, technology brings a scalable solution now and into the future. This solves your turnover and employee retention problem. It also future proofs your warranty processing as we go into the future, which is critical because we're going to see warranties continue to go up and become a bigger and bigger part of your business which, when appropriately priced, converts fixed expenses into variable costs, which is more advantageous when your costs adjust to how well your business is doing.

The key to long-term profit is automation. Ideally, how this automation will work is repair orders would be extracted from your DMS system, would take into account all of the needs of the various elements of warranty processing, what the OEM needs to see, what the dealer needs to have to happen, and what the capabilities of your DMS. It would provide that automation, which would only get human beings involved when necessary. That's where you can leverage technology to bring efficiencies, drive down costs, and protect yourself in the future, which concludes that Vehicle sales going forward will be unreliable. There will be fewer sales, and they'll have a declining margin. Service will be the driver of dealer profitability, and warranty is the new growth engine of service.

Listen to the episode featuring Jim Roche for even more insights!

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