No one is more responsible for the increased quality of cars and trucks around the world than a tall, friendly and unassuming man from Detroit named J. David Power. Yes, Dave Power exists, and his company has spread throughout the world and made (perhaps) hundreds of millions of dollars. Why? Before Power developed his methodologies (which not everyone in the auto and business worlds agree), there was no single, simple way to QUANTIFY the quality (or lack of it) of any given product. Luckily for us, Power's background was in sales and marketing in the auto business, so automotive consumers were the first to benefit from his methods. And nothing better has come along. How does Power's system work? Incredibly simply, and you must keep this in mind: Power does NOT test ANYTHING. His company SURVEYS OWNERS of products or users of services and writes-up the results in easy-to-understand reports that are sold within the industry being surveyed. Sometimes these results are made public, with the agreement of the companies in the industry being surveyed; even more often the results are kept proprietary within a company or an industry. Companies involved pay for the surveys and they more to use the results in advertising. Power's ingenious method allows him to make money on every aspect of the testing and the results! The bottom line is, though Power started his company at his kitchen table, working hand-in-hand with his beloved wife (who has since passed), sending out questionnaires and counting them when they came back, even today most of his work is not made public.
The study, now in its 26th year, measures the customer satisfaction of vehicle owners who visit the dealer service department for maintenance or repair work during the first three years of ownership, which typically represents the majority of the vehicle warranty period. Overall customer satisfaction with dealer service is based on six measures: service initiation, service advisor, in-dealership experience, service delivery, service quality and user-friendly service. (Photo: JD Power company cover page).
Power's latest survey, the 2006 Customer Service Index (CSI), proves that the better a dealership treats its customers and takes care of their problems, the more money that dealership makes. Sounds simple, huh? So why are there still so many lousy dealerships? Anyway, here are the facts:
The overall experience of a customer within a car dealership can considerably impact a dealer's revenue gain per customer, according to the J.D. Power and Associates 2006 Customer Service Index (CSI) Study(SM) released August 10, 2006.
Lexus ranks highest with an overall CSI score of 912 points on a 1,000-point scale, achieving particularly high ratings from repair customers in the areas of service initiation and service quality. Following Lexus in the rankings are Buick (911) and Cadillac (909).
The study finds that customers who are satisfied with the service advisor and the in-dealership experience are more likely to return for service and more likely to repurchase the same make. They are also more likely to recommend the make, which leads to new vehicle sales. A gain in
CSI score of just 10 points for satisfaction with the service advisor or in-dealership experience is estimated to add anywhere from $40 to more than $300 per customer annually, averaged over a one-to three-year customer base.
"Generally, in-dealership improvements have been centered in the sales department," said Jane Crane, director of automotive retail research at J.D. Power and Associates. "However, customers return to the service department more often than to the sales department. The percentage of gross profit for service is substantially higher than for sales, and the influence on future vehicle sales is considerable. Investment in better upkeep, more comfortable seating, improved lighting, Internet connectivity,
and the offer of free refreshments would easily pay for itself in additional service revenue."
The service advisor is responsible for providing a cost estimate to the customer before work commences and to advise when the vehicle will be ready. Failure to communicate these two fundamental elements drops overall CSI ratings by anywhere from 70 to 160 points, yet according to customers, about 15 percent of service advisors do not deliver on these important areas.
The study finds that the most effective service advisors function as a point person, navigating the dealership's processes to make things happen to meet customer needs. They listen intently when the customer speaks, which communicates respect more than superficial courtesies. They are knowledgeable and thorough in telling the customer what needs to be done, but don't come across as trying to sell unnecessary service. Often, they will find alternative solutions that will save their customers time and money.
"When hiring service advisors, customer treatment skills may be more important than technical skills," said Crane. "Certainly, when good service advisors are hired, every effort should be made to retain them. Most importantly, however, service advisors are often the victims of poor service department processes and procedures. A poorly managed or non-existent appointment system, or a system that does not dispatch repair work to the proper technician with appropriate skill level, is a conflict waiting to happen. Conversely, service advisors who are backed up by well-managed service operations are poised to please." (Photo: The much-sought-after JD Power Awards recently won by Lexus).
The 2006 CSI Study is based on responses from 79,580 owners and lessees of 2003 to 2005 model-year vehicles.
Customer Service Index Ranking
(Based on a 1,000-point scale)
Industry Average 873
Land Rover 840