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Franchised dealers are working in overdrive to satisfy customers

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Automobile manufacturers and new car dealerships have been consistently investing in improvements to their auto service operations and it appears to be getting a return on investment (ROI) in terms of more highly satisfied and loyal service customers.

The emergence of independents like Jiffy Lube and Firestone were strictly entrepreneurial. Astute business people saw a need that was not being filled by the franchised dealer for fast, efficient service and provided it to customer-it was that simple.

Now dealerships facing the fact that the products they receive on the lot are better built need to attract those customers back to stay profitable.

Some have opened up Express Service Lanes which are staffed to provide quick oil changes, tire rotations and the key to a great customer experience-the multi-point inspection.

The multi-point is misunderstood said Miles Illes, a former veteran service director, now consultant who has worked at some of the largest Ford dealerships in Texas. “The multi-point inspection provides the customer with peace of mind if presented properly because it informs the customer ahead of time what maintenance is needed in the future, soon or right now.”

The results of the J.D. Power and Associates U.S. Customer Service Index (CSI) Study, which found that overall customer satisfaction with service at a dealer facility increased to 797 (on a 1,000-point scale), an improvement from 787 in 2012 and up by 29 points since 2011. Additionally, overall satisfaction with dealer service facilities averaged 44 index points higher than satisfaction with independent service facilities, a gap that has expanded by six points from 2012, according to J.D. Power.

Putting that into more easily digestible terms the average Joe or Jane is generally experiencing better service when they visit a franchised domestic or import auto dealer.

"Manufacturers have made large investments in their retail programs and dealers have made significant investments in key customer touch-points—people, improved processes and customer waiting areas—which are having a profoundly positive impact on their customers," said Chris Sutton, senior director at J.D. Power. "Dealerships are placing more emphasis on the service advisor's role, which is essential to effectively handling service customers. Having a skilled, trained advisor is vital for a positive customer experience."

Some service advisors still lack the necessary training to provide an experience that is uniquely satisfying, but more dealers have invested in training to close the gap.

The study examined satisfaction among vehicle owners who visited a service department for maintenance or repair work. The CSI rankings are based on dealer service performance during the first three years of new-vehicle ownership, which typically represents the majority of the vehicle warranty period.
Five measures were examined to determine overall satisfaction with dealer service:
• Service quality;
• Service initiation;
• Service advisor;
• Service facility; and
• Vehicle pick-up.
The study determined that vehicle owners visited a car dealership service department an average of 2.6 times per year, most frequently for vehicle maintenance. About 77 percent of vehicle owners surveyed indicated their most recent dealer service visit was for maintenance, such as an oil change or tire rotation—an slight increase from 2013 and significant move upward since the 63 percent in 2011.
When dealerships communicate what they offer effectively the customer returns more frequently and feels comfortable. As part of the financial investment many dealerships now provide cappuccino and espresso in the service waiting area as well as pastries and donuts.

Overall satisfaction among owners who took their vehicle to a dealership for maintenance work averaged 806, compared with 768 among those who took their vehicle in for repair work. Among owners who visited an independent service station, overall satisfaction averaged 754 for maintenance work and 750 for repairs.
"The service offerings continues to shift to maintenance and away from repairs, which is a testament to the improvement in vehicle quality and dependability, Owner satisfaction is generally higher for maintenance than for repairs for several reasons, primarily because maintenance tends to be less expensive and time-consuming and can be scheduled and completed at the owner's convenience."

When excluding complimentary service, service customers spend less out-of-pocket per visit at their auto dealership, compared with 2013 ( about $118 vs. $125, respectively); however, this amount still remains higher than the average spent per visit at an independent service facility ($44), according to the study.
While improving over time preventive maintenance still has not been adopted in every new car dealership as a way to do business. Some dealerships still cling to the homerun swing looking for out of warranty cars with significant engine powertrain issues.

In the past heavy repair items and warranty work were the bread and butter of many dealers. Today providing scheduled maintenance and professional disclosure on what should be next in the ownership cycle is what many customers yearn for.

Owners of premium vehicles spend an average of $198 per dealer visit, compared with $31 when they visit an independent service station, while owners of non-premium vehicles spend an average of $108 per dealer visit and $45 per visit to an independent service station.

In Oklahoma City, Bob Howard Nissan General Manager, Rodney Guthrie said” I started out in the business as a salesman and worked hard to get promoted. One thing for sure is that things have really changed in our industry. The internet has brought in more knowledgeable customers and they demand a certain type of experience. We will not gouge a customer because the long term ramifications are not worth it ”

The study identified a direct correlation between service satisfaction and loyalty. Overall, 79 percent of vehicle owners surveyed indicated they "definitely will" return to their car dealership for maintenance and repairs covered under their vehicle's warranty, and 64 percent indicated they "definitely will" return to the dealership for service work after their vehicle's warranty expires.

"The service experience has a deep impact on vehicle owners, not just where they take their vehicle the next time they need maintenance or repairs, but also on their next vehicle purchase. Dealers know this and most are taking the appropriate actions to ensure their customers have the best experience possible on both the sales and service sides of the dealership.
Manufacturers like Nissan have upped the ante with a Rewards program that provides financial incentives to its members. The Nissan Rewards program has a little something for every customer. Sales incentives have reached as high as $2000 on selected vehicles and that is in addition to any other Nissan incentive if the customers are a member of One to One Rewards program. On the service side the customer earns dealer funded points that can be utilized to purchase additional repairs and also benefit from factory service incentives that allow the customer to maintain their vehicle for less.
Other manufacturers have different programs designed to help the dealership retain customers and improve loyalty.
The manufacturers have also hired executives with the single goal of improving the customer loyalty experience.

"While there are a lot of things dealers can't control, such as the product and the incentive levels on the sales side, one thing they can control is the service they provide. When new-vehicle sales dropped in 2008, dealers increased their focus on service, and that attention on the service customer continues today.
Still there is significant work to be done. J D Powers ranking system is based on a 1000 point scale and so far GMC ranks best at 819.

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