Happy Customers Go From Sales To Service At Car Dealerships

Lexus, Hummer, Jaguar, Lincoln and Mercedes-Benz lead the pack in J.D. Power & Associates Sales Satisfaction Index, a yearly study that's more about dealerships where cars are sold than the cars themselves. The study also found that dealers who treat customers right and exceed their expectations will get them back to the shop for maintenance services beyond warranty work.

The study found that about 61% percent of customers who described their sales experience as "above expectations" say they will definitely return to the dealership for paid service, compared with 37% of customers who say their experience merely met their expectations.

The industry, which in recent years has moved to create stronger brand experiences at the retail level, saw the fruits of those efforts. The consultancy says that overall, the industry posted a record high index for the second consecutive year.

The study, in its 21st year, analyzes new-vehicle purchase experience based on dealership facility, salesperson, paperwork/finance process, and delivery process and vehicle price, on a 1,000-point scale.



The firm says the industry average improved by 5 points to 852, from the previous record of 847 set in 2006. Among 14 brands whose consumers ranked their retail experience below average were Chrysler's three brands, Toyota, Scion, Honda, Nissan, Hyundai, Kia and Volkswagen. Twenty-two brands above the median included all eight of GM's brands, Ford's brands, BMW and Mini, Acura, Infiniti, Porsche and Audi.

Interestingly, Mazda--one-third of which is owned by Ford--was three places from the bottom of the list. The company has made a strong effort in recent years to completely rebrand its retail operation under a program called Mazda Retail Revolution, which involves a redesigned dealership with more of a youth-centric nightclub, high-tech feel, complete with kiosks and wireless devices.

Lexus, which jumped 10 points to 897, improved by four ranking positions to No. 1 this year.

Tom Gauer, senior director of automotive retail research at J.D. Power and Associates, says Lexus ranked high because its salespeople were especially sensitive to customers' budget concerns, helped them choose the right vehicle for their needs, and made the negotiation process clear and understandable. Hummer had a score of 895, up by 21 points from 2006.

The study, based on responses from 38,654 new-vehicle buyers who registered their vehicles in May 2007, also determined that nearly half of new-vehicle buyers report spending more than they planned for their new vehicle. Such customers' satisfaction scores an average 67 points less than customers who say they spent within the amount they had budgeted. However, a salesperson who carefully explains the vehicle's features and demonstrates its value can more than compensate for this decrease in satisfaction.

"While all new-vehicle buyers hope to get a good deal, customers are receptive to spending more than they originally budgeted, provided that the salesperson does a good job of educating the customer about the features and benefits that they are receiving," says Gauer. "Customers are looking to the salesperson to help them buy a vehicle that fits their budget, but they are certainly open to spending more if the salesperson can successfully convey the value of the vehicle."

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