• by Karl Greenberg , November 28, 2008

Most of the auto business is heading south, but J.D. Power and Associates says at least one element of the business is going in the other direction. According to the firm's 22nd annual Sales Satisfaction Index (SSI), consumers' happiness with the new vehicle retail process--once about as much fun as getting a tooth pulled -- is continuing the upward trajectory it started in 2005.

The firm surveyed 35,805 new-vehicle buyers who purchased or leased in May this year. The analysis parses customer purchase experience based on: the dealership facility, the sales staff, vehicle price, paperwork and finance process, and delivery.

Overall satisfaction across the industry--which J.D. Power measures on a 1,000-point scale--is up, from 842 points in 2005 to 857 points this year. The firm says more than 90% of brands examined in the study improved their overall satisfaction score this year versus last, mostly from physical improvements and better delivery processes.

With the improvements, however, there is a lag in dealing with consumers who arrive at showrooms after they have done their research online, per Tom Gauer, senior director of automotive retail research at J.D. Power and Associates. He says those younger, more affluent, and better-educated consumers who do a lot of Web research and pricing first are less satisfied overall with the experience than people who don't shop online. The latter group also constitutes a shrinking portion of new-vehicle shoppers.

Web-first shoppers "are more discriminating, discerning and critical," says Gauer. "They walk in knowing what they want and at what price. They may even know the vehicle options, incentives, and cost--because of staff turnover, they may know more than the salesperson knows."

He says sales staff must be responsive to customer needs, which means talking less and listening more. "When we look at satisfaction levels, it's more a manner of customers being greeted quickly and salespeople asking questions to determine what their needs are, responding accordingly."

According to J. D. Power's New Autoshopper.com study, 75% of consumers now use the Internet to shop for their new vehicle--up from 70% last year. In the sales satisfaction study, satisfaction among those Web-savvy car shoppers averaged 851 points, while those who do not use the Web have satisfaction scores averaging 873 points.

Gauer says unhappiness at the dealership is viral, since customers who are disappointed with their sales experience tell an average of six people to avoid shopping there.

In the study, Jaguar ranks highest in satisfying buyers with the new-vehicle sales process, followed by Hummer, Lexus, Cadillac and Mercedes-Benz.

On the positive side, customers who are delighted with their purchase experience make an average of five positive recommendations regarding their new vehicle, per the firm.

Among customers who leave a new-vehicle dealership without making a purchase, 40% cited poor treatment as the primary reason, per the study. Conversely, "hassle-free" negotiation is a leading reason that buyers choose to purchase from one dealer compared to another dealer.