Pioneer Electronics (USA) Mobile Business Group

Audio System Maker Drives Innovation Through Online Dealer Community

A subsidiary of Japanese audio system manufacturer Pioneer Corporation, the Pioneer Electronics (USA) Mobile Business Group sells Pioneer and Premier after-market car audio, navigation, and accessories through a 4,000-dealer network across the United States. Relying on its dealers to correctly install its increasingly complex after-market car audio products, Pioneer Electronics began to look for ways to better support the dealers, many of whom had no way to collaborate with peers for help. So Pioneer deployed social networking technologies in a business context, building a dealer portal based on Microsoft® software. Now dealers have a vibrant online community where they can share their knowledge, take training, promote their stores, and build allegiance to the Pioneer brand. The dealer portal also is used by staff at large retail outlets, for training and installation information.

 

Situation

Nozomu Matsumoto founded Pioneer Corporation in 1938, making speakers in his garage. The company grew to become a global manufacturer of audio and video products for the car, home, and business markets. It is respected for its role in introducing such innovations as the consumer laserdisc (1979), car CD player (1984), and organic electroluminescent display (1997).

In 1972, subsidiary Pioneer Electronics (USA) opened its first U.S. office in the Empire State Building in New York. Today, the organization is headquartered in Long Beach, California. The Mobile Business Group offers in-car products that make driving more enjoyable, including high-quality audio and video, advanced navigation, and satellite radio.

Driving Product Awareness

Pioneer Electronics markets its products under the Pioneer and Premier brand names through a network of approximately 4,000 dealers within the United States. These include large retailers, general electronics outlets, specialty car audio chains, and family-owned businesses that sell and install a variety of car accessories.

“In the 1990s, we saw demand peak for after-market car audio and accessories. Many consumers installed CD players in their cars because the [automakers’] stock options were very limited,” says Chris Kehring, Brand Manager, Marketing Communications, Mobile Business Group, Pioneer Electronics (USA). “You could say the after-market industry is under siege because vehicle manufacturers have significantly improved their car audio systems.

“One of the main challenges is creating awareness of our industry within our key market: young people between the ages of 16 and 24. We sell a large number of navigation systems to an older demographic segment, but it is youth that is the passionate driver of this business. However, now we are competing for young people’s attention against video game systems, mobile phones, digital media players, online games, and other electronic entertainment devices.”

Keeping Up with Customer Expectations

There used to be a steady stream of customers who purchased Pioneer products to install themselves. “Those days are gone,” reports Kehring. Sophisticated electronic accessories are now increasingly an integral component of the car that customers purchase, making replacement more challenging.

“People who do choose to add a navigation system or upgrade their car audio are no longer able to install these complex devices themselves,” Kehring adds. “Today, our customers need and expect full service from our dealers to provide and install a product, and guarantee their work so that the product looks and sounds right.”

This puts pressure on the dealers who must keep up with increasingly sophisticated after-market car audio and accessories. Some cars have fiber-optic systems to which dealers have to connect to install navigation systems because they need access to the speed sensor and antenna. Satellite radios are integrated with the air-conditioning system and stereo, and many Pioneer products come with built-in Bluetooth technology, adding another layer of complexity.

Providing Dealer Support

Pioneer has a national training program for its dealers, but with only six individuals working in the program it was becoming increasingly difficult to reach all stores and ensure that everyone provided the manufacturer’s expected level of service. Even after adding six regional product specialists to visit stores for on-site product training, Pioneer was still facing a difficult struggle.

“We had two full-time people in tech support who answered dealer calls all day long,” says Kehring. “Often they were the same type of question: ‘Where is the speed sensor for a Chevy Tahoe or Porsche Cayenne?’ We knew there were dealers out there that had the answers to these questions, but there was no way for them to communicate with each other and they were getting frustrated.

“This posed a serious threat to our industry, which as a whole was facing a tough time,” Kehring continues. “The last thing we want is for a customer to come into any of our dealers and be told, ‘We can’t put that CD player into your car.’ That person will go out and tell his friends, “Don’t buy after-market because they can’t install it in your car.’ We didn’t want to fight for market share in an increasingly smaller business; we want to make sure the industry is healthy and get more sales that way.”

Pioneer began to rethink how it dealt with its all-important sales channel. What was missing among the dealers was a sense of community, where individuals could share knowledge, show photos of installations, and connect with the Pioneer head office for additional technical support. Since late 2006, the company had been talking with Cie Studios, a creative agency and Microsoft® Certified Gold Partner, about creating an online technical support solution for dealers, but management wanted more than a one-way communication channel for product installation information.

Says Kehring, “Our president, Ed Sachs, called together some of our marketing, live event, and advertising agencies, and reviewed the state of the industry, the challenges, and the trends. He said, ‘Don’t come back to me with evolutionary ideas. Come back to me with revolutionary ideas, so we can change the momentum of this business.’”

Solution

Cie Studios rose to the challenge and presented Pioneer Electronics with a new approach to the channel communication problem. The company proposed using interactive technologies such as instant messaging, social networks, blogging, and wikis (online destinations where users can freely create or edit content using only a browser) to create a vibrant online dealer community. Cie Studios suggested building the private dealer portal using Microsoft .NET software and a Microsoft SQL Server® 2005 database to house shared technical, product, and installation information, as well as personal profiles, dealer installation showcases, comments, photos, and videos.

Microsoft technologies helped us harness the Web and social networking to solve a business issue. Our online dealer network represents a paradigm shift in communications for our sales channel. Chris Kehring Brand Manager, Mobile Business Group, Pioneer Electronics (USA)

“When Cie Studios presented its proposal in late 2006, our president saw how social networking could work for us in the corporate environment and approved it on the spot,” says Kehring. “We were lucky to have a visionary agency like Cie Studios recommend leading-edge collaboration technologies from Microsoft to create an online forum for our dealers that’s unique in the industry.”

Using Productivity-Enhancing Development Tools

Dubbed Mobile Electronics Live (MEL), the dealer portal was built using the Microsoft Visual Studio® 2003 Enterprise Developer Edition development system and ASP.NET, a set of technologies in the Microsoft .NET Framework for building Web applications and services. The .NET Framework is an integral component of the Windows® operating system that provides a programming model and runtime for Web services, Web applications, and smart client applications. Cie Studios built the first version of MEL using the .NET Framework version 1.1. MEL makes use of Internet Information Services version 6.0, a set of Internet-based services for servers running the Windows Server® 2003 operating system.

“As a Web development company, we reevaluate our development tools every year, and we always work with Microsoft technologies,” says Justin Choi, President, Cie Studios. “Without a doubt, Visual Studio is the best integrated development environment on the market. It is integrated with the .NET Framework, so we can take advantage of productivity-enhancing features like IntelliSense® technology, which saves copious amounts of time because the developer doesn’t have to look up every single function, what parameters it takes, what it returns, and so on.”

Choi also cited the following reasons for why Cie Studios chose Microsoft technologies to build the portal solution:

• Microsoft development languages, tools, and technologies are well integrated and easy to use.
• ASP.NET has full-detail error handling, including stack traces that occur during a Web or Windows Forms project and when using data sources. This not only helps debugging, but also helps during ongoing maintenance where error reporting software can be used to view errors that occurred in the past.
• ASP.NET has features such as user controls and Web controls that speed development.
• ASP.NET has automatic memory management.

Cie Studios hosts and manages MEL for Pioneer. Today, Cie Studios is working on the next version of the portal, using Visual Studio 2008 Professional Edition and .NET Framework version 3.5. According to Choi, Visual Studio 2008 has better, more integrated support for Asynchronous JavaScript and XML (AJAX), and cleaner, faster, and more efficient use of IntelliSense.

Building an Online Community

Pioneer executives gave approval to Cie Studios to proceed with the Mobile Electronics Live dealer portal in fall 2006. Pioneer prepared content and training videos for the portal, and by January 2007 Cie Studios began coding. For the next five months, its developers worked closely with Pioneer to develop the site’s functionality and refine the user interface, which was designed to reinforce Pioneer branding. “We also knew that many of the dealers were not computer savvy, so we made sure that the portal was user friendly, with simple navigation and menus,” Kehring says.

MEL was launched in July 2007, and today it provides six areas of resources: My Profile; My Showcase, where dealers can upload photos of their installations; community; installation support, with access to a database of vehicles; online training; and store support. Dealers can click through the different areas of support, as well as provide comments and personal insights.

Without a doubt, Visual Studio is the best integrated development environment on the market. Justin Choi President, Cie Studios

When a dealer conducts a MEL search using car year, make, and model, the results include vehicle information data pulled from a third-party source called Victory Technologies, augmented by dealer comments, feedback, related installation showcases, and training. Instant messaging functionality built into the portal means dealers can chat with Pioneer technical support personnel to quickly resolve issues. The two support staffers answer questions through MEL, adding repeated questions to the frequently asked questions (FAQ) of the installation support section.

“The fundamental driver for MEL was to build an online community, and one of the major challenges that we faced was to encourage busy dealers to actually use the site,” recalls Kehring. “So we used psychology, figuring the best way to get the attention of salespeople is through incentives. Cie Studios integrated a reward system into the portal to encourage participation.” Dealers can earn MEL Bucks, redeemable for prizes, by watching training videos and by supplying information such as installation tips, pictures, and articles, which is rated by peers.

“MEL has changed how Pioneer Mobile is able to interact with dealers and installers,” says Ed Sachs, President, Pioneer Mobile Entertainment (USA). “We have big plans for MEL, and we will rely on Microsoft and Cie Studios to get us there.”

Benefits

The success of the Mobile Electronics Live portal solution may reach well beyond Pioneer Electronics’ corporate boundaries to have a positive influence on the after-market car audio and accessories industry as a whole. For Kehring, that’s the most valuable outcome of the company’s endorsement of social networking in a business context.

“Cie Studios and Microsoft technologies helped us harness the Web and social networking to solve a business issue,” says Kehring. “Our online dealer network represents a paradigm shift in communications for our sales channel. But it goes beyond that.

“Social networking technologies create community through personal communications, and that’s exactly what we needed to support our ‘together we’re stronger’ philosophy. It’s not about me against you, or Pioneer against a competitor, or dealer against dealer; it’s about the industry providing a solution for every customer. With MEL’s database of vehicles, if you come in with a 2003 Mercedes CLK, any dealer can look up installation support and see everything they need to know about how to work with that car. It puts industry expertise at their fingertips, so no customer is going to hear, ‘Sorry, we can’t work on your vehicle.’”

What’s good for the industry is good for Pioneer, and the company is already seeing that its new solution is increasing dealer loyalty, expanding exposure in the marketplace, and facilitating new business initiatives.

Increasing Dealer Loyalty

Since the launch of MEL, many dealers have been using the portal as an integral part of their workday, and the number is increasing quickly as more dealers learn about the benefits. Since January 2008, the number of registered dealers has almost tripled, with close to 2,000 joining the community in May alone. As of August 2008, MEL is regularly used by 5,358 users, about three-quarters of the Pioneer network. Kehring reports that the dealers have coined a phrase: “If you can’t find something, just MEL it.”

“Our satisfaction surveys come back with uniformly positive feedback, and I’m seeing a huge groundswell in allegiance to Pioneer and the Pioneer brand,” says Kehring. “We regularly get comments like, ‘You guys are amazing’ and ‘No else has done this—it’s so important to our business.’ The portal is now key to driving brand loyalty among the dealers who are then more likely to recommend and install Pioneer products.”

The online training is one of the most popular features of MEL, with the 30 training videos regularly showing up as the most heavily trafficked area of the site. The company recently launched MEL U, which has a curriculum of six or seven videos followed by a final test. “We built incentives into the training and made it fun for dealers to compete,” says Kehring. “After you finish the [test], you can challenge other people to beat your score. Whoever has the highest overall score—the most correct answers in the shortest time—wins, and each week we publish rankings. The top 20 earn bonus points that are redeemable for prizes.”

The MEL portal provides an engaging way for dealers to improve their product knowledge and installation skills. Installation guides are getting better because dealers can input improvements to installation procedures and add photos to enhance viewers’ understanding, resulting in faster installations with fewer reworks. The online training encourages good-natured competition among peers and reduces the need for on-site training.

Expanding Exposure in the Marketplace

As the MEL portal became more widely known in the Pioneer dealer network, it came to the attention of Best Buy and Circuit City. Both stores are now planning to roll out the portal to their installers, adding another 1,600 stores to Pioneer’s existing dealer network—an estimated 40 percent increase in the sales channel.

“We are very excited about the opportunity to promote MEL within these stores,” says Kehring. “It’s a win-win situation. For Best Buy and Circuit City, keeping people trained on extensive product lines is a challenge and so is employee turnover. MEL provides an unobtrusive way of increasing their employees’ understanding of a product that they install. At the same time, we benefit by providing a service that keeps Pioneer in a prominent position.”

Facilitating New Business Initiatives

The new dealer portal is proving to be an extensible platform for new business initiatives and a rich source of information that helps Pioneer better manage its dealer network and improve sales. For example, Pioneer is working on integrating MEL with the company’s public-facing site to give dealers the opportunity to showcase their stores to customers using the dealer locator feature. Currently, this serves up dealer names and addresses, but provides no information on work quality, area of expertise, or other differentiators to boost a store’s sales.

“We are extending MEL’s functionality to allow stores to create their own online identity, using templates and branding that we provide and adding showcases of their Pioneer installations,” explains Kehring. “Then customers can browse stores in their neighborhood and choose where they want to do business. Dealers have told us the best way to drive business is to have pictures of installations for customers to preview, and we listened. We call it taking MEL to the customer. Eventually, we hope to build in a way for customers to rate the dealers.”

Pioneer district sales managers are reviewing MEL traffic reports to see how dealers in their areas are taking advantage of the site, and can work with dealers who may not be adopting the services as quickly as their peers. And when product developers in Japan asked the marketing team at Pioneer Electronics (USA) to provide product feedback, the team used the dealer portal as a vehicle to conduct surveys and relay the information back to Japan.

The dealer portal facilitates another important business initiative at Pioneer: sales contests. Currently, the company is conducting a contest with Snap-on in which installers can record their sales to win a $15,000 tool chest.

“MEL is a great platform for contests, because it allows us to build incentives into the programs to increase participation and it provides a better forum for managing contests and uncovering business information,” says Kehring. “Our president can log on at any time and—in real time—see how many installers signed up, evaluate sales in every region, and view which products are selling well. The next step that we could take is to boost lagging sales in certain areas or for certain products by holding a quick one-week contest to motivate the dealers.

“MEL is proving to be an extensible platform for innovation in how we manage our sales channel,” Kehring concludes. “At Pioneer, we have no doubt of its lasting value.”

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For more information about Microsoft solutions for the manufacturing industry, go to:
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For More Information

For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:
www.microsoft.com

For more information about Cie Studios products and services, call (562) 285-0505 or visit the Web site at:
www.ciestudios.com

For more information about Pioneer Electronics (USA) products and services, call (310) 952-2000 or visit the Web site at:
www.pioneerelectronics.com