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Sector Spotlight: Automotive Customer Satisfaction Benchmark Data
Our new customer satisfaction data shows that automotive aftersales care must improve.
The slump in UK car sales shows little sign of slowing. Latest figures from the Society of Motor Manufacturers and Traders (SMMT) reveal that new car sales fell for the seventh consecutive month in October. Sales dropped 12% year-on-year in October to 158,192 units, leading the trade body to predict the car market is heading for its first annual decline since 2011.
There are many reasons driving the decrease in demand, predominantly a decline in business and consumer confidence caused by the 2016 Brexit vote – which has led many people to hold on to, rather than spend savings – and government tightening its policy on diesel-fuelled cars.
In a move to improve air quality, government has announced buyers of new diesel cars that do not meet latest emission standards will face a one-off tax increase in April.
News of potential price hikes before they were announced officially in the November budget caused demand for diesel cars to fall away – SMMT figures reveal that sales of diesel cars fell by 30% in October.
As well as fewer people in the market to buy, the weak pound has made dealer profit margins even tighter, forcing many to withdraw enticing incentives and discounts, deterring buyers further.
New Research Shows Customers View Vehicle Aftersales Care as ‘Non-Existent’
With the automotive sales market facing its worst decline in years, it’s never been more important for dealers to focus not only on attracting new customers but retaining existing ones.
As well helping dealers stay afloat in lean economic times, it costs five times as much to acquire a new customer than it does to keep an existing one. One of the principle ways dealers can ensure customers keep coming back for more is by providing valuable, customer-focused aftersales services.
However, our latest customer satisfaction statistics (TTI Global Research – Automotive Benchmarking Report, November 2017) reveal that
on a scale of 1 to 10, respondents awarded dealers just 3.64 for Aftersales Care
indicating key post-sale services, such as, servicing, repair work under warranty and extended warranty, finance and insurance plans, fell short of customer expectations.
In contrast, respondents rated attributes such as policy transfers, helpful and efficient staff and the ease with which they were able to obtain what they want, nine and above.
Value of Retaining Customers for Main and Independent Car Dealers
Maintaining customer satisfaction beyond initial sale is vital to gain customer trust, loyalty and repeat purchase. And while applying quality, personalised after-care makes sense for all businesses, it’s especially important for dealers as aftercare services account for approximately 80% of profits.
Additional reasons for improving customer satisfaction during post-sales interactions, include:
- Improve Customer Lifetime Value (CLV) – Providing a good aftercare experience by offering quality warranty, insurance and finance products, increases opportunities to sell more to existing customers. For example, if a customer takes a car warranty, servicing work is often needed to ensure the validity of the warranty, repairs may need to be carried out under the warranty and at renewal time, the customer may opt for an extended warranty plan – all generating extra revenue for the dealer.
- Drive Customer Loyalty - Dealers’ treatment of customers influences perception and loyalty – satisfied customers are more likely to come back, creating steady repeat business.
- Increase Customer Recommendation – Car buyers are spoilt for choice when it comes to servicing and repairs - providing exemplary customer service is a unique differentiation point and boosts customer referrals.
- Positive Social Media – It’s easier than ever for customers to share negative experiences on social media. Dealers focused on raising customer satisfaction, before and after a sale, run less risk of negative stories and are more likely to receive positive mentions, enhancing brand reputation.
Accelerate Customer Satisfaction with Aftersales Care Customer Research
Every customer touchpoint, whether its sending a MOT reminder text or outlining a five-year service plan, is an opportunity for employees to enhance satisfaction and build advocacy. The first step for any dealer wanting to improve sales is commissioning customer satisfaction research. Customer surveys and questionnaires not only enable better understanding of satisfaction drivers but pinpoint exactly where process improvements are required to make customers happy.
About TTi Global’s Automotive Benchmark Survey
The survey was conducted between 1 June and 31 October 2017. Respondents were asked to provide customer satisfaction and customer effort ratings, as well as answer questions about their loyalty and recommendation intentions relating to interactions with their car dealership and servicing providers.
Customer satisfaction was rated on a 1 – 10, 10 being the most positive.
For further information about TTi Global’s automotive benchmarking survey, or to discuss your own business customer satisfaction benchmarking, contact Glyn Luckett at firstname.lastname@example.org or call 01753 214000. You should also join our our new Customer Satisfaction Linkedin group.