Canadian Service Providers Gaining on Dealerships

(Akron/Tire Review) According to the J.D. Power and Associates 2006 Canadian Customer Commitment Index study, after five consecutive years of losing market share to dealerships, aftermarket service providers have stabilized their share of service occasions. Fountain Tire ranked highest in overall customer satisfaction among Canadian automotive service providers.

“Tyre stores have always had very good relationships with their customers, and this is the third time a tyre facility has been the top-ranked service provider in the study,” said Rohan Lobo, senior manager of automotive research at J.D. Power and Associates in Toronto. “While Fountain Tire’s relationships with customers often begin with a tyre purchase, in many cases, it eventually becomes the facility the customer goes to for all service activity. In fact, customers report that more than 60 percent of the service activity performed at Fountain Tire has been non-tyre work.”

The study, now in its ninth year, is based on responses from 16,258 owners of 2- to 12-year-old vehicles. Owners were surveyed in December 2005 and April 2006. Overall satisfaction and loyalty with the service provider is determined by examining five key factors: appointment/check-in, service advisor, work quality, after service and customer orientation.

Fountain Tire posts improvements across all aspects of the service experience, particularly in the after-service factor. Autopro and Petro-Canada Certigard follow Fountain Tire in the rankings. “Independent Repair Shops” achieved a higher satisfaction score than Fountain Tire, but this category is not included in the rankings because it is a channel as opposed to a branded provider.

For the industry as a whole, customer satisfaction has improved by 8 index points – the largest recorded increase since 2003. The service-station channel shows the strongest improvement, increasing 17 points from 2005, followed by tyre specialists with an 11-point gain.

“The peak selling years of 1999 through 2003 produced a bulge in the number of vehicles that, until recently, were under warranty,” said Lobo. “The tendency of owners to gravitate to dealerships for service while in the warranty period contributed to the steady increase of service share for dealers. We see that most of this increased share captured by dealerships over the last five years came from owners who bought new vehicles. Now that most of these vehicles are beyond their basic warranty, owners have begun to drift back to the aftermarket for service.”

The study also finds that customers of mass merchants (Canadian Tire, Wal-Mart and Costco) and quick lubes are becoming more price sensitive. While cost is increasing in importance, the number of mass-merchant customers who say they would “definitely” return or recommend their facility is the lowest of any channel.

“Mass merchants and quick lubes typically run on a volume-based business model, rather than the relationship model that characterizes most of the other channels in the aftermarket,” said Lobo. “Although this model can create increased service traffic, it can also negatively impact retention and advocacy.”