Positive Service Experience Has Big Impact on Future Sales

The promise of good service post-sale is one key to successful vehicle sales. This has been common knowledge for generations, but it's borne out by hard numbers in the March 2015 PowerRater Consumer Pulse, a monthly analysis developed jointly by J.D. Power and DealerRater. A focus on the back of the store might be the most effective way for dealers to increase vehicle sales over the long term.

The inaugural PowerRater Consumer Pulse asserts that a dealer's ability to satisfy its service customers boosts its reputation for good service overall. Highly satisfied service customers (overall satisfaction scores of 901-1,000 on a 1,000-point scale) are more likely to write a review about their experience, compared with those who are merely satisfied or indifferent (scores of 750-900), according to J.D. Power.¹ Among the 37% of highly satisfied customers, 4.3% indicate that they posted an online review of their experience. In contrast, less than 3% of service customers who are merely satisfied, or indifferent, posted an online review.

Among highly satisfied customers who posted an online review of their last service experience, 91% of the reviews were positive; among merely satisfied or indifferent customers who posted a review, 71% of the comments were positive. And according to data collected by DealerRater,² 40% of car buyers indicate that the service department's reputation was significantly important in choosing the dealer they purchased from.

"Clearly, there is a strong incentive for dealers to maximize customer satisfaction as it leads to a greater likelihood that customers will post a positive review, helping to support the reputation of the dealer's service department," said Chris Sutton, vice president, U.S. automotive retail practice at J.D. Power.

Data collected by DealerRater also shows that by improving its service reputation via positive reviews increases a dealership's likelihood of winning new service business and positively impacts its ability to sell vehicles.

"Considering how competitive the market is, and the tight profit margins that dealers are fighting, strengthening online reputation to maximize sales opportunities is becoming a critical business objective for new-vehicle dealers," said Gary Tucker, chief executive officer of DealerRater.

J.D. Power identifies the five processes with the highest potential impact on customer satisfaction with dealer service:

• A service advisor who focuses on customer's needs (+73 points)

• Providing the customer with helpful advice (+55 points)

• Getting the vehicle fixed right the first time (+53 points)

• Access to the service advisor within 2 minutes of arrival (+45 points)

• Ensuring the vehicle is ready when originally promised (+41 points)

Since, on average, dealers fix vehicles right the first time 93% of the time, and service advisors focus on customers' needs 92% of the time, Sutton noted that dealers can focus on improving timely access to advisors and setting realistic expectations for when vehicles will be ready, which are met only 73% and 77% of the time, respectively.

[1] Source: J.D. Power 2015 U.S. Customer Service Index (CSI) Study^SM, which measures customer satisfaction with service at a franchised dealer facility for maintenance or repair work among owners and lessees of 1- to 5-year-old vehicles. The 2015 U.S. CSI Study is based on responses from more than 70,000 owners and lessees of 2010 to 2014 model-year vehicles and was fielded between November and December 2014. Data of online reviews are based on owners and lessees of 1- to 3-year-old vehicles.

[2] Based on a survey, conducted between February 27 and March 16, 2015, of 15,211 consumers who wrote a review on DealerRater.com after recently purchasing a vehicle or visiting a dealership for service.