Car dealer experience still key to repeat business

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By: Wise Marketer Staff |

Posted on July 26, 2006

Customer satisfaction with the overall experience within the dealership can considerably impact a dealer's revenue gain per customer, says J.D. Power and Associates.

The J.D. Power and Associates 2006 Customer Service Index (CSI) Study, now in its 26th year, measures the customer satisfaction of vehicle owners who visit the dealer service department for maintenance or repair work during the first three years of ownership, which typically represents the majority of the vehicle warranty period. Overall customer satisfaction with dealer service is based on six measures: service initiation, service advisor, in-dealership experience, service delivery, service quality and user-friendly service.

CSI scores ranked
Lexus ranked highest with an overall CSI score of 912 points on a 1,000-point scale, achieving particularly high ratings from repair customers in the areas of service initiation and service quality. The top ten were:

  1. Lexus: 912
  2. Buick: 911
  3. Cadillac: 909
  4. Jaguar: 908
  5. Lincoln: 906
  6. Mercury: 905
  7. Saturn: 904
  8. Pontiac: 903
  9. Audi: 890
  10. Mini: 890

The study revealed that customers who are satisfied with the service advisor and the in-dealership experience are more likely to return for service and more likely to repurchase the same make. They are also more likely to recommend the make, which leads to new vehicle sales. A gain in CSI score of just 10 points for satisfaction with the service advisor or in-dealership experience is estimated to add anywhere from US$40 to more than US$300 per customer annually, averaged over a one-to three-year customer base.

"Generally, in-dealership improvements have been centred in the sales department," said Jane Crane, director of automotive retail research at J.D. Power and Associates. "However, customers return to the service department more often than to the sales department. The percentage of gross profit for service is substantially higher than for sales, and the influence on future vehicle sales is considerable. Investment in better upkeep, more comfortable seating, improved lighting, Internet connectivity, and the offer of free refreshments would easily pay for itself in additional service revenue."

Customer treatment skills critical
The service advisor is responsible for providing a cost estimate to the customer before work starts and for advising when the vehicle will be ready. Failure to communicate these two fundamental elements drops overall CSI ratings by anywhere from 70 to 160 points yet, according to customers, about 15% of service advisors do not deliver on these important areas.

The study also found that the most effective service advisors function as a 'point' person, navigating the dealership's processes to make things happen to meet customer needs. They listen intently when the customer speaks, which communicates respect more than superficial courtesies. They are knowledgeable and thorough in telling the customer what needs to be done, but don't come across as trying to sell unnecessary service. Often, they will find alternative solutions that will save their customers time and money.

"When hiring service advisors, customer treatment skills may be more important than technical skills," said Crane. "Certainly, when good service advisors are hired, every effort should be made to retain them. Most importantly, however, service advisors are often the victims of poor service department processes and procedures. A poorly managed or non-existent appointment system, or a system that does not dispatch repair work to the proper technician with appropriate skill level, is a conflict waiting to happen. Conversely, service advisors who are backed up by well-managed service operations are poised to please."

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