Service Departments Can Fuel Store Loyalty

J.D. Power: Service Departments Can Fuel Store Loyalty

August 17, 2007

WESTLAKE VILLAGE, Calif. — Personal relationships between vehicle owners and a dealership's service department are likely to reap significant rewards, a recent study by J.D. Power and Associates revealed.

According to the 2007 Service Usage and Retention Study, vehicle owners who report experiencing a personal connection with their dealer service adviser are more likely to return to the dealership for future service, spend more money during service visits and repurchase a vehicle of the same make.

The study measures customer satisfaction of vehicle owners who visit a dealership's service department for maintenance or repair work during the fourth or fifth years of ownership, which officials said typically represents the period after the manufacturer's vehicle warranty expires.

The study found that among vehicle owners who report a sense of connection to the dealer service adviser, 70 percent say they would "definitely return" to the dealership for work not covered by warranty.

In addition, results showed that among customers who felt a personal connection to the dealership, about 46 percent said they "definitely will" repurchase a vehicle of the same make, compared with only 15 percent among customers who don't report such a connection.

The study also discovered that dealerships' failure to meet customer expectations has a considerable negative impact on customer loyalty. Among customers who say their service visit fell below their expectations, only 4 percent intend to return to the dealership for future service.

However, this figure increases to 73 percent among customers who say that their expectations were exceeded during a service visit.

"When dealership service staff take extra time and energy to connect with customers on a personal level — for example, by calling customers by name, treating them in a friendly and courteous manner and being honest and upfront about the work that's required on a vehicle — it inspires increased feelings of trust and loyalty in the dealership," said Tom Gauer, senior director of automotive retail research at J.D. Power.

"This can translate into repeat business for the dealership, not only for vehicle maintenance and repair, but also for future vehicle purchases," Gauer added.

In addition, Gauer said incumbent upon dealerships strive to exceed customer expectations during every service visit, as one unsatisfactory service experience could open the door for previously loyal customers to permanently defect to a non-dealer service facility.

"Once customers have a good experience at a non-dealer service facility, they are less likely to return to a dealership. This demonstrates the need for dealerships to focus on keeping customers from going elsewhere in the first place," he concluded.