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J.D. Power: Service Departments Making Gains in CSI

July 17, 2008

WESTLAKE VILLAGE, Calif. — Overall customer satisfaction with dealer service has improved considerably this year, according to a new report from J.D. Power and Associates. The market research leader's 28th annual Customer Service Index (CSI) Study found that more than two-thirds of the 37 ranked brands demonstrated gains.

The study is designed to measure 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 was primarily due to a combination of an increase in the proportion of maintenance work performed and improvements in satisfaction with repair work.

The study noted that the proportion of customers bringing their vehicles to the dealer for repair work has declined to a historic low in 2008, averaging 35 percent. Customer satisfaction with repair work increases notably — improving by 9 points since 2007 — with gains made by both premium and non-premium brands. However, 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 David Sargent, vice president of automotive research at J.D. Power and Associates. “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."

The study also found that communicating with customers after service work has been completed has a notably strong impact on satisfaction, particularly through increasing customer perceptions of fairness of charges and the value of service received. For customers that receive an explanation of work performed or an explanation of charges, satisfaction is approximately 100 points higher, on average, than if no explanations were provided. Approximately 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.”

The study also charted the following key patterns:

• 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. However, there is a particularly large decline in satisfaction — 202 points, on average—if vehicles are returned less clean than when they were received.

• Among customers who report speaking to a service adviser immediately upon arriving at the dealership, satisfaction scores average 927–224 points higher than among customers who say they waited more than five minutes to speak to a service adviser.

The full report, including a breakdown of scores for all 37 brands, can be found here.

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