Customer Satisfaction with Dealer Service for Four- and Five-Year-Old Vehicles Increases Slightly

WESTLAKE VILLAGE, Calif., Sept. 17, 2008 - Customer satisfaction with dealer service has increased slightly among vehicle owners, compared with 2007, in part due to a continuing increase in the proportion of maintenance-related service visits vs. repair-related visits, according to the J.D. Power and Associates 2008 Service Usage and Retention StudySM (SURS) released today.

The study, now in its 12th year, measures customer satisfaction of vehicle owners who visit a dealer service department for maintenance or repair work during the fourth or fifth years of ownership, which typically represents the period after the manufacturer's vehicle warranty expires. Overall customer satisfaction is based on six factors (in order of importance): service initiation; service advisor; service quality; user-friendly service; service delivery; and in-service experience.

Overall satisfaction with dealer service among original owners of four- and five-year-old vehicles averages 866 on a 1,000-point scale -- up three points since 2007. Among the 34 dealer brands included in the study since 2007, nearly seven in 10 (68%) have improved since the previous year. Contributing to this increase in overall satisfaction is a shift in the proportions of repair and maintenance service visits since 2007. In 2008, 58 percent of customers report visiting the dealer for maintenance work, while 42 percent report visiting for repairs. In comparison, 54 percent of customers in 2007 visited the dealer for maintenance and 46 percent visited for repair work. Satisfaction is higher when customers visit the dealer for maintenance work (878, on average) than it is when customers visit the dealer for repair work (849, on average).

"Improvements in automotive product quality have resulted in the reduced need for repairs over time, which ultimately helps improve customer satisfaction with service, since customers are able to avoid unexpected and potentially inconvenient service visits," said Tom Gauer, senior director of automotive retail research at J.D. Power and Associates. "In addition, dealers have also improved their efforts to provide knowledgeable and courteous staff and a comfortable service experience."

The study finds that developing personal relationships with customers has a strong positive impact on customer satisfaction and loyalty. Customers who report experiencing a personal connection to their service advisor are five times more likely to report their service experience exceeded their expectations, compared with customers who don't report experiencing a personal connection (41% vs. 8%, respectively). In addition, 75 percent of customers who say that their expectations were exceeded indicate they "definitely will" return to their servicing dealer for future customer-paid work, compared with only 42 percent of customers who say their expectations were merely met.

"In these difficult market conditions, with many dealerships struggling to meet their sales goals, keeping busy with service work is what may separate those facilities that are profitable from those that are not," said Gauer.

The study also finds that, although customer satisfaction with non-dealer service providers is slightly higher than satisfaction levels with dealer service (871 vs. 866), dealer service facilities perform considerably better than do non-dealer facilities in the in-service experience factor, which encompasses how well the facility allows the customer to spend their time during service, as well as the cleanliness, comfort and amenities of the customer waiting area. Among customers of dealer service facilities, satisfaction with the in-service experience averages 878, compared with an average of 743 among non-dealer service customers -- a difference of 135 points.

Among non-dealer service facilities, independent garages tend to provide higher levels of satisfaction than other types of service facilities in this group, including gas station service facilities, specialty service facilities and retail service facilities. The strong performance of independent garages can be attributed in large part to the personal connections their customers report having with the service staff, as well as the quality of service provided.

"Dealerships have an inherent advantage when it comes to creating a satisfying in-service experience, since they are typically equipped with well appointed waiting areas for their customers," said Gauer. "An opportunity exists for non-dealer service facilities to enhance the comforts and amenities they offer for their customers as they wait during service visits. Conversely, dealer service facilities can improve satisfaction levels among their customers by fostering personal relationships. Providing clear and proactive communication and conveying consideration for the customer's time can go a long way in positively impacting satisfaction and loyalty rates."

Acura, Cadillac, Jaguar, Lexus and Saturn perform particularly well among dealer service customers. Brands that perform particularly well among non-dealer service facilities include Goodyear Tire and Valvoline Instant Oil Change.

The 2008 SURS is based on responses from 12,863 owners of 2003 and 2004 model-year vehicles. The study was fielded from March to April 2008.