TORONTO -

Virginia Connell says that with the substantial size of the auto service market for maintenance and repair, when a sector gains even a fraction in market share, that means auto dealers are leaving millions of dollars in potential revenue on the table.

“As vehicles age and require more complex and costly repairs, aftermarket service is doing a better job at attracting and retaining customers, especially as warranties start to expire, consequently capitalizing on the more revenue lucrative repair work,” said Connell, who is automotive research and consulting manager at J.D. Power Canada.

According to the J.D. Power 2019 Canada Customer Service Index Long-Term Study released on Thursday, auto dealers in Canada receive 54% of revenue spent on servicing vehicles 4 to 12 years old. But they continue to fall behind aftermarket service facilities in share of visits, 48% vs. 52%.

The study states that dealerships average $323 per visit compared to $222 at an aftermarket facility. However, customer visits to dealerships, at 1.3 visits, remain flat in 2019, while visits to aftermarket facilities increased, from 1.5 in 2018 to 1.6 in 2019.

NAPA AUTOPRO ranked highest in the study for overall customer satisfaction, with Volkswagen Dealership ranking second and Toyota Dealership placing third.

Another key finding of the study: When their vehicle is 4 to 7 years old, owners’ preference moves toward aftermarket shops over dealers.

Also, dealers show a small customer satisfaction advantage —787 vs. 782, on a 1,000-point scale — in the area of pure maintenance. However, aftermarket service facilities beat dealers in overall satisfaction — 783 vs. 775. Aftermarket facilities also show higher satisfaction with repairs, 791 vs. 759.

In addition, greeting customers immediately as they enter the shop is of high importance to customers, and returning the car cleaner than when it arrived also increases satisfaction, according to the study.

Overall, aftermarket providers do a better job in that first area, with a 51% to 35% advantage over dealers in greeting customers immediately. Dealers do better in the second area, being more likely by a 33% to 9% margin of returning vehicles cleaner.

The study measures satisfaction and intended loyalty among owners of vehicles that are 4 to 12 years old, and it also analyzes the customer experience for warranty and non-warranty service visits. The study, fielded from March through June 2019, is based on responses of 8,815 owners.

The study measured the importance of word of mouth. Friends’ or relatives’ recommendations are much more important to customers when choosing an aftermarket shop compared with a dealer.

Fifty-two percent of the time, aftermarket customers say they “definitely will” recommend their facility after maintenance work, while 39% said that for dealers. That gap grows when it comes to repair work, with a 57% vs. 34% advantage for aftermarket customers over dealers.  

Satisfaction grows when customers receive and accept recommendations for additional service work from their service advisor.

And the use of tablets is important.

When tablets are used to list details of the service, customers are much more likely to accept additional work recommendations. Broken down by use, acceptance rates of work recommendations grow when the tablet is for the following: list specific details of the issue (59%); provide a cost estimate (57%); access service history (57%); and show a menu of available options (56%).

“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. “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.”