By providing an outstanding customer service experience, automotive service providers can generate higher levels of customer retention and unlock significant revenue potential, according to the J.D. Power 2015 Canadian Customer Service Index Long-Term (CSI-LT) Study. The study, which measures the service experience, satisfaction, and intended loyalty among owners of vehicles that are four to 12 years old, 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%); service quality (23%); service advisor (20%); service facility (17%); and vehicle pick-up (16%). Scores for each factor are reflected in an index based on a 1,000-point scale. Interestingly, this year’s survey methodology uncovered $1.5 billion worth of annual business that is up for grabs. “Too often we look at what the entire service market happens to be, and view it as the total business up for grabs. This time we change our thinking a bit,” explains J.D. Ney, manager of the Canadian automotive practice at J.D. Power. “One thing we found interesting is what the difference between the dealers and the aftermarket looks like,” Ney says. “We found that people bring their car in on average about 2.4 times per year. There are a large percentage of people, for all of those occasions, who only take their car to the dealer, and there are also a large percentage of customers who only bring their car to an aftermarket facility. What you are left with is about 21% of Canadians who take their car to both a dealer and an aftermarket facility. The service business of those individuals is worth about $1.5 billion. That’s the true battleground. “For an aftermarket facility, it’s a lot tougher to commit someone who only goes to a dealer to give you a shot, and on the other side of the coin it’s very difficult for a dealer to repatriate a customer who only goes to the aftermarket. So you are left with trying to convince those ‘tweeners’ to do all of their service business with you. That’s the business that is up for grabs. And there is quite a bit of it at $1.5 billion a year.” “This changes the conversation a little bit away from ‘How do I attract brand-new customers into my shop?’ New business is still important, but the immediate goal moves away from ‘How do I attract new customers?’ and moves to those customers you see once a year. You know they have some other service needs being done elsewhere, so your focus is now on how you can get that other service occasion,” adds Ney. The study also found that dealers are more likely than aftermarket providers to perform a multi-point inspection on vehicles (77% vs. 70%, respectively), and to have an advantage in knowing a customer’s service history (85% vs. 76%). Performing inspections more frequently and knowing a vehicle’s service history helps service facilities make more informed service recommendations, opening significant potential revenue opportunities. “I’m not sure if this is a procedural thing or a question of logistics, but it seems that some of the larger dealers are doing a better job with the drive-through service approach, where the customer comes into a pre-service bay and the service advisor walks the customer around the vehicle right at service initiation. That walkaround isn’t the full technical inspection, but it’s about checking lights and wipers, fluid levels, and tire alignment, and this goes a long way towards building value into the service occasion. It’s an opportunity to provide some guidance and advice to the customer, and to demonstrate that you have the customer’s best interests in mind. It’s also an opportunity to sell some of those ancillary products like wiper blades, lights, or tires,” explains Ney. Overall customer satisfaction with automotive dealerships is 731, and satisfaction with aftermarket shops is 749. Among vehicle owners who are “delighted” with their most recent service experience (with an overall satisfaction rating of 10 on a 10-point scale), 93% say they “definitely will” return to the service facility for work they are willing to pay for, compared with only 61% among those who rate their last service visit an 8. “This underscores the importance for vehicle service facilities to focus on providing a consistently outstanding customer experience,” says Ney. “There is a significant opportunity to improve the service experience, as just 15% of all service occasions in the past 12 months resulted in an overall customer satisfaction rating of 10, compared with 67% of service occasions rated 8 or below, among whom only 40% say they ‘definitely will return.’” When JD Powers ran the KPIs for their explanatory value on a rank chart, the KPIs that rose to the top were all in the soft-skills area. They focused a lot more on the work the advisors were doing, as opposed to the work that the technicians were doing. “I think too often – and this is not a criticism of the aftermarket, probably more just the auto service business in general – so much time, energy, and focus is spent on technical skills and the ability to fix cars. Obviously we have to do that, but what we are finding more and more is the ability to fix cars properly and get it right the first time is now a given, so it no longer has any kind of additional boost in terms of providing any kind of customer satisfaction. “We are at a place now where some of the differentiation that comes into play here is in the soft skills: the ability of the service advisor to be an advisor and provide the customer with some helpful advice, and be in much more of a customer experience position than currently exists,” explains Ney. It really comes down to the customer experience. “I think across the board, the position of the service advisor has traditionally been filled with individuals with more of a technical background. And frankly, the position of the service advisor is not a technical one; it’s a customer service, customer experience role. “When filling that role of service advisor, you have start thinking [of yourself] as more like a Starbucks barista and less like an auto mechanic. That’s the kind of person you want in that position,” advises Ney. Ney also notes that to maximize satisfaction, service facilities should focus on the key performance indicators (KPIs) that generate the most positive impact on the customer experience. The top three performance measures and their impact on satisfaction scores include being completely focused on the customer’s needs (+63 points); providing an appointment on the day desired (+56); and providing helpful advice (+53). These KPIs have long been a focus for Canadian service facilities, as their average completion rate of at least 80% is already very high. However, among the top 10 KPIs measured in the study, there are three performance processes that are completed less than 80% of the time, creating a significant opportunity for service facilities to improve customer satisfaction. These KPIs include having the customer speak to an advisor immediately on arrival (+43 points; 44% completion); keeping customers informed on the status of their vehicle (+36; 75%); and contacting customers after the service occasion (+29; 38%). Nearly half (46%) of owners of older vehicles exclusively selected an aftermarket facility for their service needs in the past year; a further 33% used only an original equipment manufacturer (OEM) dealer facility; and the remaining 21% took their vehicle to both an aftermarket and OEM dealer facility. That remaining 21% of owners represents a key battleground for vehicle service market share and significant revenue potential for service providers in Canada. On average, owners of older vehicles 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% battleground worth more than $1.5 billion in annual potential revenue for service providers. “I think, in general, the aftermarket does a solid job. We find the scores for these facilities are slightly higher than for new car dealers, but I think that gap is shrinking. More and more OEMs are paying attention to the service business than perhaps they had in the past, and they have the advantage of larger facilities and potentially a more significant investment behind them, so on the aftermarket side we have to double down on what we have to do from a differentiating standpoint. I think that comes down to building relationships with our customers and building out those soft skills among our service advisors. We have to ensure wherever we can that we are being viewed as trusted advisors, trusted partners, in the auto service needs of our clients. “Frankly, the aftermarket service has a built-in head start for most of that concept too. As aftermarket facilities, every customer that comes in is a retail sale – you don’t have the advantage of warranty work to bring customers in the door. And I think that’s why the aftermarket does a bit better in terms of those activities, because that is what their business is built on: on selling this work,” says Ney. It all comes down to building relationships with your customers, building out those soft skills among your service advisors, and making sure wherever you can that you are being viewed as trusted partners in the auto service needs of your clients.