GoAuto: Industry on notice as JD Power brings Sales Satisfaction Index s
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2016 Australia SSI Study
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MAZDA has emerged as the top-performing automotive brand in Australia for sales satisfaction among new-car buyers, ranking higher than all other leading brands – including prestige marques – in the inaugural JD Power Australia Sales Satisfaction Index (SSI) study released today.
The Japanese car-maker’s industry-leading performance makes it a benchmark brand at both the front and back end of the dealership, having led the field for two out of the past three years in JD Power’s influential Customer Service Index (CSI) study which measures customer satisfaction with maintenance and repair service.
Conducted for the first time in Australia, the SSI study moves the analysis to the new-car showroom and the customer’s purchase experience – an obviously critical area for the car companies and dealerships concerned, particularly when the treatment of a prospective buyer is paramount to not only an immediate sale but long-term loyalty and advocacy of the brand.
The results are sure to send shockwaves through the boardrooms of some of Australia’s leading automotive companies and dealer groups, with six out of the top 10 highest-selling brands, and two top-tier prestige brands, all placing below the industry average of 817 points.
The level of customer satisfaction with the purchasing process is calculated on a 1000-point scale and based on six factors: salesperson (19 per cent), the deal (18 per cent), delivery timing (17 per cent), delivery process (17 per cent), dealer facility (16 per cent) and sales initiation (14 per cent).
Audi placed at the bottom of the table with 749 points, while BMW was third-last on 785 – worrying figures when prestige marques place such a high value on customer service and have implemented new dealership standards and key initiatives, such as non-sales-oriented concierges and ‘product geniuses’.
Both Audi and BMW managed only two points out of five across each category according to JD Power’s ‘power circle’ ratings, with the exception of sales initiation in which BMW scored three.
Mercedes-Benz, Lexus, Volvo and Land Rover were among the brands included in the study, but not ranked due to small or insufficient sample size.
Despite consistently ranking highly in the CSI study, Subaru (791) has not fared as well in JD Power’s front-of-house SSI report, while Ford (815) – which has been a leader among the mainstream brands for customer service initiatives in recent years – also failed to better the industry average.
They were not alone: Nissan (784), Holden (812), Mitsubishi (812) and Volkswagen (813) were all below average.
In contrast, Mazda was the clear leader on 840 points – scoring highly in all six areas of assessment, but, JD Power says, most notably in the delivery process – while Honda and Hyundai were tied for second place on 832 points each, edging out Australia’s market-leading brand Toyota (825) in fourth.
The study provides not only a report card on individual brands and their retail network but a unique insight into the attitudes and motivations of Australian new-vehicle buyers during the purchasing process, which in turn informs the industry on how to best support them.
For example, JD Power’s senior country manager (Australia) Loi Truong pointed to the finding that the vast majority (84 per cent) of car buyers check the internet during the purchase process and that nearly half of them (45 per cent) search and verify information while at a dealership.
With that in mind, the study also found that customers nonetheless still rely heavily on a salesperson’s recommendation of a car in comparison with other models, and that this has a significant impact on satisfaction levels.
Even though six in 10 customers had already decided on the vehicle they wanted to buy before turning up at the dealership, it was still beneficial for them to ask the salesperson to compare it with other models.
More than half the time, the salesperson did not proactively offer to make relevant comparisons if the customer did not ask for it.
“Customers in Australia conduct a massive amount of research while shopping, but they still need someone to help them through the information overload,” Mr Truong said.
“Salespeople who proactively offer model comparisons convey concern for their customers to purchase a vehicle best suited to their needs, thereby increasing their level of satisfaction with the shopping process.”
Satisfaction levels were found to be significantly higher when quotes on a computer or tablet were provided, compared to a verbal quote (received by 32 per cent of customers), while an explanation of the vehicle’s features at (or after) delivery were deemed critical, with almost 15 per cent of customers indicating they were not provided with this service.
Loyalty and advocacy are also clearly linked to sales satisfaction, JD Power says, with the study finding that among those highly satisfied customers (those with scores of 924 or higher), 83 per cent said they “definitely would” purchase the same brand of vehicle again and 88 per cent said they would definitely recommend the brand to family and friends.
In contrast, less than a third (31 per cent) of customers who were highly dissatisfied (scoring 743 points or less) said they would definitely repurchase the same brand and recommend the brand to others.
The effect of the overall experience on a customer also comes into focus when one considers that the primary consideration of many Australian new-car buyers (31 per cent) is, perhaps unsurprisingly, securing the best deal or lowest price – yet among this group, satisfaction levels are below the industry average (down to 812).
Furthermore, those who chose a dealer based on location – closest to home or work – had even lower satisfaction scores (788).
This puts the onus back on dealerships to offer an excellent all-round experience if they want to satisfy their customers and win the loyalty and repeat business that comes as a result.
The SSI study shows that satisfaction scores were higher when customers chose a dealer because they knew someone there or because the dealer has a good reputation (853 and 839 points respectively).
JD Power Asia-Pacific vice-president Mohit Arora said it cuts both ways, with customers who make the effort to find out more about their dealer standing to benefit from a better purchase experience, while dealers are handed a chance to develop important connections.
“While it is important that customers receive a good deal from their dealer, the monetary savings they receive is momentary,” Mr Arora said.
“It is far more gratifying for the customer to have the support of a reliable sales dealer in what may be the beginning of a long-term relationship – a relationship that also benefits the dealer, as the customer may recommend or even buy again from the same dealership in the future.”
The Australian SSI study is based on responses from 2477 new-vehicle owners who purchased their vehicles between September 2015 and June 2016. The study was fielded from March through June this year.
The other brands included in the study but not ranked were Isuzu Ute, Jeep, Kia and Suzuki.