To J.D. Power and Associates, new survey is personal
Vehicle owners who report experiencing a personal connection with their dealer service advisor are far more likely to return to the dealership for future service, according to the J.D. Power and Associates 2007 Service Usage and Retention Study (SURS). They also will spend more money during service visits and repurchase a vehicle of the same make.
The study, now in its 11th year, measures customer satisfaction of vehicle owners who visit a dealer service department for maintenance or repair work during the fourth or fifth years of ownership, which typically represents the period after the manufacturer's vehicle warranty expires.
Overall customer satisfaction is based on the following six factors, in order of importance:
1. service initiation,
2. service advisor,
3. service quality,
4. user-friendly service,
5. service delivery, and
6. in-service experience.
Among vehicle owners who report a sense of connection to the dealer service advisor, 70% say they would "definitely return"” to the dealership for work not covered by warranty.
These customers also report considerably higher satisfaction with their overall service experience, providing an average score of 936 on a 1,000-point scale. That compares with an average of 728 among customers who say they don't have such a relationship.
In addition, among customers who feel a personal connection to the dealership, approximately 46% say they "definitely will" repurchase a vehicle of the same make, compared with only 15% among customers who don't report such a connection. Connected customers also spend a much larger proportion of their annual service expenditures at a dealer facility than those customers who do not feel connected to their dealership.
"When dealer service staff take extra time and energy to connect with customers on a personal level—for example, by calling customers by name, treating them in a friendly and courteous manner, and being honest and upfront about the work that's required on a vehicle -- it inspires increased feelings of trust and loyalty in the dealership," says Tom Gauer, senior director of automotive retail research at J.D. Power and Associates. "This can translate into repeat business for the dealership -- not only for vehicle maintenance and repair, but also for future vehicle purchases."
The study finds that dealerships' failure to meet customer expectations has a considerable negative impact on customer loyalty.
Among customers who say their service visit fell below their expectations, only 4% intend to return to the dealership for future service. However, this figure increases to 73% among customers who say that their expectations were exceeded during a service visit.
"It is imperative that dealerships strive to exceed customer expectations during every service visit, as one unsatisfactory service experience could open the door for previously loyal customers to permanently defect to a non-dealer service facility," says Gauer.
"Once customers have a good experience at a non-dealer service facility, they are less likely to return to a dealership. This demonstrates the need for dealerships to focus on keeping customers from going elsewhere in the first place."
The study also finds that overall service satisfaction with dealers has improved by 11 points since 2006, while satisfaction with non-dealer service facilities has decreased by six points. While non-dealer facilities have typically posted higher satisfaction scores than dealerships in previous studies, the gap narrows to only 4 index points in 2007 -- down from 18 points in 2005.
Satisfaction scores average 867 for non-dealer facilities and 863 for dealerships. In addition, customers using dealerships are more likely to have maintenance service visits that exceed their expectations, while non-dealer facilities are more likely to exceed customers’ expectations for repair service.
"While dealerships have improved across all six factors that contribute to satisfaction, there is opportunity for further improvement in meeting customer expectations for repair service, particularly in areas such as greeting customers promptly on arrival, providing accurate estimates of charges, explaining the work performed, and decreasing the length of time customers have to wait to pick up their repaired vehicle,” says Gauer.
"Non-dealer facilities also have opportunities for improvement, including ensuring that vehicles are clean when they are returned and following up with customers after service to find out if the work performed was satisfactory.”
Acura, Cadillac, Lexus, Lincoln and Mercury dealerships perform particularly well among dealer service customers, according to the survey. Goodyear Tire and Rubber Co. and Valvoline Instant Oil Change perform well among non-dealer service facilities.
The 2007 SURS is based on responses from 11,674 owners of 2002 and 2003 model-year vehicles. The study was fielded from March to April 2007.