A New Way of Working: Comprehensive Ownership Solutions

In case you missed it: The Service Solutions team here at Navistar has a new way of working for dealers.

To bridge the gap between reactive and preventive maintenance, the Service Solutions team has introduced a new customer service operations model similar to Scania’s that will include comprehensive ownership solutions and an all-new Digital Dealer platform.

A Dedicated Solution to Provide an Experience

What you need to know: The purpose of comprehensive ownership solutions is to support customers throughout their ownership journey with a set of service contracts that are tailored to enhance the overall ownership experience. Currently, Navistar’s dealer network lacks the touchpoints needed to create customer loyalty through service, regularly scheduling maintenance, and quick turnaround times, something the new way of working is set to solve. In turn, this will deliver greater uptime​, improved productivity and efficiency​, lower total cost of ownership, and​ allow customers greater ease of doing business with dealers.

“Our comprehensive ownership solutions should not be seen as a warranty package,” emphasized Oliver Johansson, director, Customer Solutions. “These are service contracts which go beyond maintenance and repair coverage; it is a new customer value proposition and experience, a proactive focus on downtime reduction and a way to reinforce our brand.”

Navistar’s dealers are building on a strong foundation when it comes to comprehensive ownership solutions; Navistar has been selling extended service contracts (ESCs) for a long time. Currently, Navistar has 170,000 vehicles under contract, which support customers in avoiding unpredictable and potentially expensive repair bills and create a consistent revenue stream for dealers. In the past, ESCs were a way for the dealer to make money simply by selling the contract, but that setup did not address the biggest customer pain point, the downtime connected to the repair event. Under the new way of working, dealers will now be leveraging current ESCs combined with expanded preventive maintenance coverage that comes with proactive service planning. The goal is to deliver more uptime and customer peace of mind. This combined with the International S13 Integrated Powertrain will enable Navistar to deliver a best-in-class solution for customers.

Data-Driven Profitability

​ “We know that maintenance can have a huge impact on customers total cost of ownership (TCO),” said Oliver “Adopting good maintenance practices, with the right parts, fluids, and procedures can improve fuel economy between 1% to 10%. For an on-highway fleet customer, with annual fuel costs per vehicle of $45,000 on trucks logging over 100,000 miles per year, the savings potential is substantial. In addition, those vehicles normally realize a higher residual value and are easier to sell. All that adds up to improved TCO”, said Oliver.

Today, Navistar captures less than 50% of the service potential from the new vehicles delivered. Growing Navistar’s contracted solutions ensures the customer is coming back, creating a loyalty to the International Truck and IC Bus brands, and the dealerships are better servicing each vehicle throughout its lifetime.

“What we are doing now is merging our traditional service contract business with connected vehicle data and a new digital platform to bring our solutions to the next level,” said Oliver.

Currently, customers find themselves either over-maintaining their vehicles or missing critical maintenance events, waiting long downtimes as dealers sift through emergency repair appointments on a first-come, first-served basis, often causing bottlenecks at dealer service locations. When maintenance is tracked and scheduled, however, dealers will have a service bay ready, parts ordered, and a technician ready.

As reflected in the image below, the comprehensive ownership solutions provide service coverage for towing, vehicle chassis systems, powertrain, service events, and preventative maintenance. Additionally, customers will automatically receive access to an Uptime Advocate, a dedicated person from Navistar who will monitor the performance of their vehicle and orchestrate repairs and updates with their dealership. Customers can select which contracts are right for them and then purchase according to the years, mileage, and maintenance events which they wish to cover.

By introducing these comprehensive ownership solutions, dealers and the Uptime Advocate will be the ones reaching out to customers to book service appointments proactively, and this is Navistar’s greatest opportunity to differentiate ourselves from competition. With the Digital Dealer dashboard and Uptime Advocate wrapped around a repair and maintenance package, Navistar will have a greater visibility into fleets’ health based on vehicle data, allowing dealers to set up preventive maintenance appointments three to four weeks ahead of time and identify repairs and campaigns which align with the already planned down-event.

The key selling point is the convenience for customers, allowing them to focus on their core business, and knowing the dealer is keeping track of their fleet’s health. In turn, this creates profitability for Navistar and the dealer network in terms of contract and part sales, and the customer in terms of greatly reduced downtime of their fleets. The goal is to drive customer profitability and loyalty.

Managing the Maintenance Mindset

When it comes to buy-in, the best form of validation is results. To educate other dealers and get them on board, Service Solutions has been working on a pilot program with a few dealers in Navistar’s network.

“We can do as much communication as possible, but in the end, we need to prove the concept works and deliver the customer benefits we have seen in other markets,” said Oliver. “The mindset we want our dealers to move forward with is that we need to give it a shot; at the same time, we continue to co-create through customer and dealer feedback to untap the full potential.”

At the end of the day, according to Oliver, this will enable us to marry a vehicle with a full-service contract and include it into a monthly payment plan via Navistar Financial service, which in the end starts to bring us closer to a vehicle-as-a-service offering; an important capability also as we start ramp up our sale of electric vehicles in the future.

“It is a way of reinforcing our brand, a way of making our customers more successful, and it’s a revenue stream for Navistar,” Oliver added.