U.S., Canadian dealers receive service kudos in J.D. Power study

Jan. 13, 2016
Customer satisfaction with dealership service departments remains high in the U.S. and Canada, despite a record number of recalls, according to data from the J.D. Power 2015 U.S. and Canadian Customer Service Index studies.

Customer satisfaction with dealership service departments remains high in the U.S. and Canada, despite a record number of recalls, according to data from the J.D. Power 2015 U.S. and Canadian Customer Service Index studies.

Overall customer satisfaction with dealership service in Canada is at 731 on a 1,000-point scale, while aftermarket shops in that country scored 749. Satisfaction with dealers in the U.S. is at 800 (a slight dip from 2014, when the score reached 804). In the U.S., overall satisfaction with dealer service averages 852 for luxury brands, and 792 for mass-market brands.

In the U.S., the CSI among customers with recall-related repairs improved from 777 in 2014 to 789 in 2015, reducing the satisfaction gap between recall and non-recall customers. The percentage of service visits related to recalls reached 16 percent in 2015, the highest it's been in recent history.

“Even though recalls can create a large influx of customers into the service department and really strain capacity, automakers are better prepared to handle recalls than they were a few years ago,” says Chris Sutton, vice president, U.S. automotive retail practice at J.D. Power. “Manufacturers have shown that it is possible to turn a potential negative into a positive when it comes to recalls if they’re done in a way that doesn’t inconvenience the customer.”

The Canadian study measures the service experience, satisfaction and intended loyalty among owners of vehicles that are 4 to 12 years old, and analyzes the customer experience from both warranty and non-warranty service occasions. Overall satisfaction is based on the combined index scores of five factors that comprise the overall service experience (in order of importance): service initiation (24 percent); service quality (23 percent); service advisor (20 percent); service facility (17 percent); and vehicle pick-up (16 percent). Scores for each factor are reflected in an index based on a 1,000-point scale.

The U.S. 2015 Customer Service Index (CSI) Study focuses on owners of 1 to 5-year-old vehicles that received service at franchised dealer facilities.

The Canadian study showed that the satisfaction gap between dealer and aftermarket service continues to shrink. "We've seen that gap closing, and that's true in terms of market share as well," says J.D. Ney, manager of the Canadian automotive practice at J.D. Power. "It wasn't that long ago that aftermarket players had 60 percent market share. Now that number is much closer to a 50/50 split."

Underused online scheduling

According to the data from the U.S., express service lanes were a wise investment for dealers, but online scheduling capabilities remain a bit of a non-starter. Dealers with express service lanes for walk-in customers outperform dealers without that option (819 to 764) in the satisfaction score. More customers that took their vehicles to a dealer with an express lane (52 percent) indicated they spoke to a service advisor immediately compared to 38 percent at non-express lane dealers.

Only 9 percent of customers in the U.S. schedule appointments over the Internet, compared to 73 percent via phone. Nearly half of owners said they were unaware of online scheduling being available.

Good service pays off for Canadian dealers

Nearly all Canadian vehicle owners (93 percent) with the highest satisfaction rating (10 out of 10) said they would definitely return to the service facility for paid repairs, compared to 61 percent among those who rated their service visit at an 8 or less on the 10-point scale.

According to J.D. Power, only 15 percent of all service occasions resulted in a score of 10 on the satisfaction scale, while 67 percent ranked at 8 or below among the 40 percent of customers who said they would definitely return to that repair shop.

The top three performance measures in the Canadian study with an impact on satisfaction scores were: being completely focused on the customer’s needs (+63 points); providing an appointment on the day desired (+56); and providing helpful advice (+53).

"There has been a shift," Ney says. "The value of quality work is still important, but so too is being able to get the vehicle in for service, speaking to an advisor, and having convenient times available for service.

Potential areas of improvement include having the customer speak to a service advisor immediately, keeping customers informed on the status of their vehicle, and contacting customers after the service occasion. These processes were completed less than 80 percent of the time according to vehicle owners.

Nearly half (46 percent) of Canadian vehicle owners exclusively selected an aftermarket facility for service needs in the past year, and 33 percent use only an OEM dealer. The other 21 percent used both types of repairers. On average, owners of older vehicles in Canada who visit a service facility at least once – either a dealership or other service facility – make 1.2 visits to a dealer and 1.8 visits to a non-dealer per year. The average amount these customers spend per service visit is $232. At an average of three visits per year, each customer represents nearly $700, making the 21 percent battleground customers worth more than $1.5 billion in annual potential revenue for service providers.

Recommending additional work generates revenue

According to the Canadian study, customer satisfaction and the amount spent on a service visit increase when a service advisor properly educates customers on additional work that may be required. The study showed that 46 percent of owners of 4- to 12-year-old vehicles indicate their service advisor recommended additional work. Of this group, nearly half authorized the work to be completed, spending an average of $527 on the visit, compared with an average of $225 among those who were not advised of additional work.

Results in the U.S. were similar. While 29 percent of U.S. customers said that the service advisor recommended additional work, the success rate of those recommendations—or the proportion of customers who agree to have the work performed—is 47 percent. The average dollar total service spend for customers who have the additional recommended work done at the dealership is $277, compared with $171 for those who declined.

Dealers in Canada also benefited from more thorough inspections. According to the Canadian study, dealers in that country are more likely than aftermarket providers to perform a multi-point inspection on vehicles (77 percent vs. 70 percent) and to have an advantage in knowing a customer’s service history (85 percent vs. 76 percent). 

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