Independent Garages Outperform Dealerships: J.D. Power Study
While record new-vehicle sales in Canada in recent years have increased the volume of service customers in new car dealerships, Independent Repair Shops are outperforming most dealerships in satisfyin...
While record new-vehicle sales in Canada in recent years have increased the volume of service customers in new car dealerships, Independent Repair Shops are outperforming most dealerships in satisfying service customers, according to the J.D. Power and Associates 2003 Canadian Customer Commitment Study released September 11th.
The study, which measures customer satisfaction and loyalty of owners who have their vehicles serviced at dealers and aftermarket facilities, finds that independent repair shops rank highest in customer satisfaction, followed by Saturn/Saab/Isuzu Dealers. Independent repair shops perform particularly well in the area of work quality, with strong ratings in factors pertaining to the service advisor and appointment/check-in.
“With more than 18 million vehicles on the road and a slightly younger fleet as a result of record sales of new vehicles, the auto service industry in Canada is facing a big opportunity for growth,” said Rohan Lobo, manager of research projects at the J.D. Power and Associates office in Toronto. “However, service providers that lack a strong focus on customer satisfaction and retention will miss out while others gain long-term customers. Lack of personal contact during the service experience can directly influence customer value perceptions. While independent repair shops may not have consciously perfected the art of good, long-term customer relationship management, the personal contact that customers experience at these facilities keep them coming back.”
The current trend for vehicle owners to leave the dealership after the warranty period to seek alternative service facilities continues. While dealerships’ service share for two- to three-year old vehicles increased from 2000 to 2002, their share remained flat in 2003 compared to 2002. During the critical “honeymoon” period where vehicles are still under warranty (two to three years of ownership), dealerships attract 73 percent of service visits. However, that drops to 46 percent among 4- to 7-year-old vehicles, and to just 21 percent among vehicles 8 to 12 years old.
“Although the significant investment made in technical training often leaves little room for training individuals in customer handling skills and the importance of retaining customers, such skills have a great payoff,” said Lobo. “Given that the average vehicle generates about $10,000 in service revenue over its lifetime, service providers that can offer consumers the benefits of technological skills, together with strong customer service, will have the best chance of success in this highly competitive market.”
The 2003 Canadian Customer Commitment Study is based on responses from 13,767 owners of 2- to 12-year-old vehicles who were surveyed in fall 2002 and spring 2003.