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Dealer service CSI up, new J.D. Power study finds

November 16, 2010

Overall customer satisfaction with dealer service has improved considerably in 2008—with more than two-thirds of the 37 ranked brands demonstrating gains—according to a J.D. Power and Associates study released this month.

The Customer Service Index Study, now in its 28th year, measures satisfaction among vehicle owners who visit the dealer service department for maintenance or repair work during the first three years of ownership, which typically represent the majority of the vehicle warranty period.

After remaining relatively flat since 2005, overall satisfaction with dealer service increased to 882 on a 1,000-point scale in 2008, an improvement of 6 points from 2007. The improvement primarily is due to a combination of an increase in the proportion of maintenance work performed and improvements in satisfaction with repair work.

Customers who visit the dealer for routine maintenance tend to be more satisfied (894), on average, than are repair customers (862). The proportion of customers takng their vehicles to the dealer for repair work declined to a historic low in 2008, averaging 35 percent. Customer satisfaction with repair work increased notably—up by 9 points since 2007—with gains made by both premium and non-premium brands. But satisfaction with maintenance work increased only slightly this year.

"Improved levels of vehicle quality have led to a decline in the need for vehicle repairs during the first three years of ownership," said J.D. Power’s David Sargent. "Despite the fact that the majority of service visits—65 percent—are for maintenance work, dealers are very focused on the need to satisfy their repair customers.

"Given today’s market conditions, where dealers are finding it extremely difficult to achieve profitability, it is vital that they not overlook the importance of ensuring their service customers are satisfied. Not only does meeting and exceeding the expectations of customers through after-sales service result in increased likelihood that those customers will return for service, it also results in increased likelihood that those customers will stay loyal to the brand when they are next in the market for a vehicle."

For a second straight year, Jaguar polled the highest CSI, with an overall score of 923. Cadillac (922) and Buick (919) followed in the rankings.

The study also finds that communicating with customers after service work is completed strongly impacts satisfaction, particularly by increasing customer perceptions of fairness of charges and the value of service received. For customers who receive an explanation of work performed or an explanation of charges, satisfaction is about 100 points higher, on average, than if no explanations were provided.

About 82 percent of customers report that they received explanations of the work performed on their vehicle, while 58 percent say they received an explanation of charges, when necessary.

"Many times, it is the quality of communication provided by service personnel that makes the difference between a satisfied customer and a true advocate," said Sargent. "When customers are provided with clear explanations as to why the work performed on their vehicle was necessary, as well as the reasoning behind the charges, it improves satisfaction with the value of the work performed, as well as perceptions of the fairness and honesty of the dealer.

"Consistently following these relatively simple steps helps to foster trust among customers, which is critical to building loyalty for future service work as well as future sales. For example, 78 percent of customers who rate the fairness of charges as ‘outstanding’ say that they will return to the dealership for routine maintenance after the warranty expires, while only 49 percent of customers who provide ‘average’ fairness ratings say the same."

Other findings of the study:

• While 5 percent of customers say that they would prefer to schedule their service visit with the dealer via the Internet, only 1 percent of customers actually do so. The vast majority of customers—74 percent—call the dealership to schedule an appointment, while 25 percent of customers just drop in.

• When vehicles are returned to the customer cleaner than they were when received by the dealer, satisfaction scores average 48 points higher than scores provided by customers whose vehicles showed no difference in cleanliness. And there is a particularly large decline in satisfaction—202 points, on average—if vehicles are returned less clean than when they were received.

• Customers who report speaking to a service advisor immediately upon arriving at the dealership offer average satisfaction scores of 927—224 points higher than among customers who say they waited more than five minutes to speak to a service advisor.

The 2008 CSI Study is based on responses from 87,302 owners and lessees of 2005 to 2007 model-year vehicles. The study was fielded between January and April 2008.