Canadian dealers lagging aftermarket

According to the J.D. Power 2019 Canada Customer Service Index Long-Term Study (CSI-LT), aftermarket service facilities are doing a better job compared to Canadian dealers in capitalizing on more costly repairs for four to 12 year old cars. The study, which was released on Thursday, also showed that aftermarket service facilities are achieving a higher overall satisfaction rate than Canadian dealerships.

The study found that Canadian auto dealers receive 54% of the revenue spent to service four to 12 year old vehicles, but they still continue to fall behind aftermarket shops in the share of visits, with Canadian dealers receiving 48% of visits compared to the 52% of visits received by aftermarket service facilities.

Dealerships leaving millions on the table

One of the key takeaways of the study is that dealerships are losing out in an industry that generates approximately $10 billion annually. While aftermarket facilities make less on average per service visit, they saw visits increase by 0.1 percent in 2019.

According to Virginia Connell, Automotive Research and Consulting Manager at J.D. Power Canada, “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.”

Aftermarket facilities better in customer service

The study found that Canadian owners prefer aftermarket shops over dealerships when their car is between four to 7 years old. Not only are aftermarket shops the preferred choice, but they’re also outpacing dealerships in customer service.

“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,” Connell said in a recent press release. “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.”

However, according to the J. D. Power study, “while dealers have a slight advantage in customer satisfaction when it comes to pure maintenance (787 vs 782, on a 1,000-point scale), aftermarket service facilities have higher overall satisfaction than dealers (783 vs 775) and higher satisfaction with repairs (791 vs 759).”

Key findings

According to the study, two areas that drive noticeable satisfaction increases include greeting customers immediately and returning a customer’s vehicle cleaner than when it arrived.

The study also found that customer satisfaction is highest “when customers receive and accept recommendations for additional service work from their service advisor,” and they’re more likely to accept these recommendations when tablets are used.

Specifically, tablets boost acceptance rates of work recommendations when used to “list specific details of the issue (59%); provide a cost estimate (57%); access service history (57%); and show a menu of available options (56%).”

Source: J.D. Power 2019 Canada Customer Service Index Long-Term Study (CSI-LT)^SM