Canadians Keeping Their Wallets Closed

The J.D. Power and Associates annual Customer Satisfaction Survey has been released and while I will be looking at the study in greater detail in our next issue, I wanted to take a moment to write briefly about two of the more interesting findings in the survey.

The first is spending by Canadians on vehicle maintenance and repair which has dropped from 2009. J.D Power and Associates pegs the figure at $1.4 billion across the industry, driven by two factors: Canadians spending less on services and a decrease in overall number of service visits, particularly for vehicles between four and seven years old.

That should not be a surprise. Canadians are feeling the pinch of an economy that has slowed down, high personal debt levels, creeping inflation, along with uncertainty as to how long interest rates will remain low. All this has resulted in many keeping their wallets closed and thinking hard about what expenses need to be curtailed or cut entirely. One such expense is automotive maintenance and repair. I’ve have had people tell me they are deferring repairs that are not safety related, or driving less frequently in order to extend the times between maintenance work and such things as oil changes. Drivers are also becoming more price-conscious. I’ve had some independents tell me that they are seeing an increase in the number of people price shopping amongst service operations.

This means independents have to invest more time and effort on customer education on the dangers and higher costs of postponing vehicle maintenance or pushing the oil change too far; as well as developing more effective programs for bringing customers into the shop. Shop owners should also be going through their customer databases to find and target those vehicle owners who will become long-time customers and bring repeat business. This likely means cutting some or even a lot of customers who are infrequent or one-time users of your services; but those that remain will mean greater profits for the business.

The other finding that caught my attention is the high ranking Canadians gave to such operations as Jiffy Lube. It came in amongst the top five ranked brands. This is something that the industry should pay attention to. For some time, Jiffy Lube has been moving aggressively into expanding beyond its traditional work of oil and fluid changes. While that still remains its core business, many locations offer wheel balancing to battery and fuel-filter replacement, and even cabin air filter changes. I recently had this done on a car of mine just to see how well the staff could do the work. The staff was professional, offered a range of filter and parts options, explained why the work was recommended and did that work quickly and efficiently. And I received a free coffee and newspaper as well.

I also chatted-up a couple of other customers who were doing similar work and all expressed their satisfaction with the service they received; and they were prepared to come back for those kinds of services again in the future.

What does this mean? Independents who are now facing, by what I’m seeing on the ground and what this study suggests, is a changing and more competitive automotive service landscape.