Canadian Aftermarket Shops Fare Better Than Dealers in Auto Service, Finds J.D. Power
The J.D. Power 2019 Canada Customer Service Index Long-Term Study (CSI-LT) released in September finds that aftermarket service facilities fare better in the share of visits.
According to the study, aftermarket share of visits is 52%, whereas dealers get a 48% market share. This is despite the fact that 54% of the revenue share from servicing vehicles 4-12 years old goes to the Canadian auto dealers.
The study also finds that average revenue generated per visit is $222 for aftermarket facilities, compared to $323 for dealers. The number of visits to aftermarket service shops has also gone up (from 1.5 in 2018 to 1.6 in 2019). On the other hand, the number of visits to dealers has remained the same (1.3).
In an industry estimated to generate $10 billion annually, dealerships average $323 per visit vs. $222 at an aftermarket facility but customer visits to dealerships remain flat in 2019 (1.3 visits) compared with an increase in visits to aftermarket facilities (1.6 in 2019 vs. 1.5 in 2018).
“Considering the sheer size of the auto service market for maintenance and repair, any fraction gained in market-share translates into millions in potential revenue that auto dealers are leaving on the table,” says Virginia Connell, Automotive Research and Consulting Manager at J.D. Power Canada. “As vehicles age and require more complex and costly repairs, aftermarket service is doing a better job at attracting and retaining customers, especially as warranties start to expire, consequently capitalizing on the more revenue lucrative repair work.”
As per the rankings of the study, NAPA AUTOPRO tops the list in overall customer satisfaction with a score of 811 out of 1000. The second place is claimed by Volkswagen Dealership with a score of 791 and Toyota Dealership is in third place with a score of 789.
J.D. Power measures customer satisfaction and loyalty amongst owners with 4-12-year-old vehicles in its Canada Customer Service Index Long-Term (CSI-LT) Study. The study analyzes vehicle-owners’ satisfaction during warranty and non-warranty visits. J.D. Power has based overall satisfaction on five factors (in order of importance): service initiation (24%); service quality (23%); service advisor (20%); service facility (17%); and vehicle pick-up (16%). The company conducted the study from March to June 2019 has put it together on the basis of 8,815 owner-responses.
When the car is between 4-7 years old, J.D. Power finds that vehicle owners prefer aftermarket shops over dealers. As per the findings of the study, Dealers fair slightly better in customer satisfaction on pure maintenance, scoring 787 as opposed to 782 for aftermarket facilities. However, when it comes to overall satisfaction, the scales tip in favour of aftermarket shops with a 783 vs. 775 score. Satisfaction on repairs is higher for aftermarket facilities, scoring 791 as opposed to 759 for dealers.
“Dealers have this window of opportunity to up their game, ensuring they retain customers even after the warranty expires by providing a better experience—a key factor for driving satisfaction both for repair and maintenance,” says Connell. “For auto dealers, satisfied customers not only translate into repeat service visits but their intent to purchase or lease new vehicles from the dealer increases.”
The 2019 study also features the following additional key findings:
- Customer satisfaction is driven by two key tasks—greeting customers as the enter the shop and returning the car cleaner than when it is dropped off. As per the study, aftermarket shops are doing better at greeting customers than dealers (51% vs. 35%). On the other hand, dealers return the vehicles cleaner (33% vs. 9%).
- Word of mouth recommendation works well for aftermarket shops. Customers recommend their aftermarket shops 52% of the time after maintenance work, as opposed to 39% for dealers. Post repair work recommendation for aftermarket facilities is 57% vs. 34% for dealers.
- Customers are more satisfied with additional recommendations for service work. They are more open to the recommendations when service advisors use tablets to list service details. Customers respond better when the tablets are used in the following ways: list specific details of the issue (59%); provide a cost estimate (57%); access service history (57%); and show a menu of available options (56%).