How Toyota, Lexus plan to digitally improve the service experience

A select few Toyota and Lexus dealers this month will be pioneers in an expansion of the SmartPath and Monogram digital retailing systems — a strategy that promises to bring to dealer service lanes what the initiative has brought to hundreds of dealers' sales floors.

Toyota's SmartPath Service and its Lexus counterpart, Monogram Service, aim to ease the trepidation some consumers face in the service lane with a large dose of digital transparency, including pricing.

When fully implemented, the fixed ops components will allow owners to digitally guide their whole service experience: setting appointments, reviewing video inspections, approving repair orders, paying their bills and monitoring repair progress through completion and eventual delivery.

"What we've been working on for the last two years really is designing the SmartPath Service and Monogram Service experience and using the same premise that we had for sales and F&I," said Tim Bliss, general manager for retail transformation at Toyota Motor North America. The driving question? "How do we use technology to make an integrated online and in-store experience for our guests?"

Norm Reeves Toyota San Diego will be the first dealership in the nation to try out SmartPath Service, with a launch scheduled for the end of January. Two other dealerships, one from each of the two brands in different parts of the country, will follow in February, Bliss said, with a handful of other pilot dealerships coming on line over the next year.

Here is how SmartPath Service and Monogram Service work: An owner or lessee might learn from their vehicle's telematics system that their vehicle is due for service. Using either the brand app or the dealer website, the customer identifies their vehicle and schedules an appointment. Based on stored information about the vehicle, the dealership can offer recommended or required services, each with a corresponding price. When the customer arrives for their appointment, the vehicle and customer are automatically recognized and the check-in procedure is already complete, Bliss explained.

Once the vehicle goes into a bay for service, the system gives the customer a progress report — either by their choice of phone or text. "Maybe while this vehicle is in, the technician realized that it also needed brakes, so the technician can actually send the customer a video of what they found and get approval for that additional service in real time," Bliss said.

Once the repair or maintenance is completed, the customer can pay their bill electronically if they choose, making it possible for them to seamlessly pickup their vehicle.

One key of the program will be transparent upfront pricing, Bliss said. "Not a list of every service possible, but a price specific to that vehicle and what might be required." He said the upfront pricing would help alleviate long-held customer anxieties about the costs of visiting a dealer for service.

"The ultimate goal is just to provide a better service experience that was a key part of that ownership experience," he said. "What we've designed takes into account the way that the dealership is structured today. The technology provides us a platform, but it lets the dealer digitize their operation."

Once in place, the new system "should improve dealership productivity, making the service drive more efficient and the service shop more efficient," Bliss said.

That is what Larry Fogt, service director at Norm Reeves Toyota, believes will happen, and it's why the dealership raised its hand to pilot SmartPath Service.

"I'm hoping it's going to bring something to the service world that we've talked about since the late 1990s: a fully integrated system from beginning to end," said Fogt, whose 45-bay service department in San Diego averages between 3,600 and 3,900 repair orders per month.

"I was back at Longo [Toyota, in El Monte, Calif., the brand's largest U.S. dealership] in the 1990s as a service adviser and service manager, and we would task our DMS providers to do this. But nobody's been able to come up with a system that integrates everything together," he said. "I guess that's because there were too many [vendors with different products], and it caused a lot of DMS failures."

Toyota launched its SmartPath digital retailing system in 2019 with a handful of pilot stores, allowing dealerships to list their inventories and pricing online and customers to go deep into the purchasing process without having to set foot in a dealership. The software suite had a number of features and let customers move from their couches to the showroom floor and have their SmartPath information follow them in the purchasing process.

Dealers using SmartPath — and later Lexus Monogram — saw growth in sales and profitability as consumers digitally ticked through not only vehicle options and accessories, but F&I products as well. Now there are about 250 Toyota and Lexus dealerships that run the software, Bliss said, with the two brands continuing to bring another one or two dozen stores on line each month.

"Even with these times, we're still seeing dealers on SmartPath are making more per vehicle than dealers not on SmartPath," he said of earlier sales and F&I components of the suite. "All the metrics we watch are showing that time, trust and transparency continues to deliver, not only for the guest, but for the dealer."