One of the key findings in J.D. Power and Associates 2010 Customer Service Index (CSI) Study is that reduced service volumes for new-vehicle dealers are likely to continue for several years, potentially bottoming out in 2013.
“The outlook for auto dealer service volumes and customer spending appears challenging,” Power says, citing depressed auto sales in 2008 (particularly in the U.S.) and 2009 as the reason for projecting decreases in service business.
Dealer service traffic volumes are expected to decline by approximately 20 percent between 2009 and 2013, resulting in a 25 percent decrease in service dollars from owners of late (2005 to 2009) model year vehicles. Particularly in the current period of slow auto sales, most dealers rely on service business to stay profitable the company observes.
"Over time, many vehicle owners gradually defect to non-dealer service facilities for repair and maintenance needs, particularly when the warranty period expires," says Jon Osborn, research director at J.D. Power and Associates. "With service customer retention becoming more crucial than ever during the next few years, dealerships must focus on not only providing superior levels of customer service, but also on enhancing convenience for vehicle owners and providing pricing that is more competitive with non-dealer facilities."
Power’s CSI study examined satisfaction among vehicle owners who visit a dealership service department for maintenance or repair work. The CSI rankings are based on dealer performance during the first three years of ownership, which typically represents the majority of the vehicle warranty period.
Five measures were examined to determine overall customer satisfaction with dealer service. Listed in order of importance, they are: service quality; service initiation; service advisor; service facility; and vehicle pick-up.
The study found that overall satisfaction with dealer service has increased from 761 in 2009 to 767 in 2010, marking the 10th consecutive year of industry-wide improvement.
Notable improvements were seen in the service facility and service quality measures in 2010. In particular, satisfaction increased: ease of driving in and out of dealer facilities; convenience of parking; thoroughness of the work performed; total time required to complete service on the vehicle; flexibility of accommodating customer schedules; and thoroughness of explanations.
Several other time-related metrics improved from 2009, including customer ability to get a service appointment on the same day as their initial inquiry call and service being completed the day that the vehicle was brought in for service.
"These improvements may be due to not only an increased focus on customer satisfaction from dealers, but also are possibly a result of lower volumes of service traffic that dealers are now experiencing," says Osborn.
Click here to see what brands fared best in Power’s 2010 Customer Service Index study.
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