J.D. Power: Consumers Experience Few Instances of Dealers Upselling Unnecessary Work

Along with listing which brands fared best, J.D. Power and Associates’ 2011 U.S. Customer Service Index Study refuted an industry stereotype that dealerships routinely pressure customers to accept unnecessary maintenance or repair services.

Turns out, the study says very few service customers indicate experiencing upselling by the dealer. In fact, overall J.D. Power found only 7 percent of service customers in 2011 indicate that their dealer attempted to sell them service work that they perceived as unnecessary.

However, customer-reported rates of upselling increase as vehicles age.

Analysts determined that among owners of 1-year-old vehicles, 4 percent indicate that the dealer tried to sell them unnecessary work. This rate increased to 9 percent among owners of 4-year-old vehicles.

J.D. Power emphasized customer perceptions of upsell pressure have a notable impact on overall satisfaction with dealer service. Among service customers who say they do not perceive that they were upsold, the study revealed overall satisfaction averaged 780 on a 1,000-point scale.

In contrast, among customers who experienced upselling from the dealer, the study pointed out satisfaction averaged 642 — a difference of nearly 140 points.

“Suggesting additional service work can actually benefit both customers and dealerships — customers may prolong the life of their vehicle, while service facilities may gain additional revenue,” explained Jon Osborn, research director at J.D. Power.

“However, it is key for dealerships to properly train their staff in the subtleties involved in adequately explaining the necessity and value of additional services without placing undue sales pressure on the customer,” Osborn suggested.

CSI Brand Rankings

The study also examined satisfaction among vehicle owners who visited a service department for maintenance or repair work. J.D. Power explained the CSI rankings are based on dealer performance during the first three years of ownership, which typically represents the majority of the vehicle warranty period.

Five measures were examined to determine overall customer satisfaction with dealer service. Listed in order of importance, they were service quality, service initiation, service adviser, service facility and vehicle pickup.

J.D. Power discovered Lexus ranks highest in customer satisfaction with dealer service among luxury brands for a second consecutive year.
Lexus achieved an overall CSI score of 846, and study orchestrators found the brand performed particularly well in all five measures.

Rounding out the top four nameplates in the premium segment were Jaguar (837), Cadillac (830) and Acura (828). Among luxury brands, J.D. Power noted Volvo and Porsche achieved the greatest improvements from 2010.

Among mass market brands, J.D. Power pointed out Mini ranked highest with a score of 805 and improved by 19 points from 2010. Analysts said Mini performed particularly well in the vehicle pickup and service quality factors.

Also among the top 10 brands in the mass market segment were GMC (803), Buick (799), Chevrolet (792), Kia (784), Hyundai and smart in a tie at 783 each, Volkswagen (779), Ford (773) and Honda (765).

Of mass market brands, analysts indicated Mazda and Suzuki achieve the greatest improvements from 2010.

The study also found that during the past five years, dealer service facilities have gradually increased their share of service visits and spending, particularly among customers whose vehicles are under warranty.

Between 2007 and 2011, J.D. Power said the share of service visits at dealer facilities has increased from 67 percent to 74 percent. During the same time frame, overall share of spending for dealer service visits increased from 70 percent to 73 percent.

“By becoming more competitive in terms of cost and convenience, dealer service facilities are making some progress in capturing share from non-dealer service facilities,” Osborn surmised.

“Due to low sales levels during the past three years, service volumes for new in-warranty vehicles are expected to steadily decline through 2013,” he added. “As a result, maintaining service customer share and loyalty will be vital to dealers in the coming years.”

J.D. Power explained the 2011 U.S. CSI Study is based on responses from more than 97,300 owners and lessees of 2006 to 2010 model-year vehicles. The firm noted the study was fielded between October and December 2010.

Analysts mentioned they measures dealer service in various countries throughout the world, including Australia, Canada, China, France, Germany, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, the Philippines, South Africa, Taiwan, Thailand and the U.K.