Friday, January 11, 2013

2013 Customer Sentiment Survey Is In – More “Good” Got “Great” … But, The Bad Got Uglier

Top-box satisfaction with the most recent dealer service experience increased by 6 percentage points. This sort of improvement is critical for keeping service customers in-channel (e.g., making sure customers stay, broadly, in the dealer channel). Unfortunately, chains picked up the most with top-box service satisfaction increasing from 42% in 2012 to 51% in 2013. It is easier for the chains to implement strategy because they do not have “independent” dealers.

Use of the internet as a resource for service research actually declined in 2013 as this resource matured. Furthermore, service provider "switching" declined from 30% in 2012 to 28% in 2013 switching service providers – either in-channel or to an alternative channel). Digital Service Customers had already found their sources of information and were more prone to stick with them.

Why? The most probable explanation, which fits with other survey results, is the economy moving ever further away from the 2009 recession where disposable income was very tight. More service customers found “their guy” and stuck with him or her, and were less concerned with finding the “best deal”. Use of the dealer channel for the most recent service or maintenance repair was up in 2013, reflecting (1) dissatisfaction primarily with independent repair facilities, (2) crappy white-box parts flooding the independent channel, and (3) “compassionate waterboarding”. The switching charts tell the story about the migration from the independents. “Compassionate waterboarding” reflects a situation where bad dealer service practices have become less-bad, for a host of reasons.

So, for most dealer customers things got better. Only 24% of dealer customers switched providers. But, when they switched, an increasing number went outside the dealer channel for maintenance or repair; 21% stayed in channel in 2013 vs. 27% in 2012. So, when things got bad, they got worse. Using the Internet as a resource to make service provider “switching” decisions exacerbated the problem – 9% fewer Internet-driven switchers stayed in channel in 2013 vs. 2012. What’s going on? The migration out of the dealer channel is dominated by middle-income customers (earning less that $100K a year) and females. 17% fewer of female dealer switchers stayed in-channel.

In terms of fulfilling customer values, dealer scores for the top ten values improved. So, we made some headway in the past 12 months. But, maybe, not enough. Not enough to keep our most fragile customers from looking elsewhere.

Bottom Line: When “Great” is represented by a top-box satisfaction score of 56%, we need to worry about the not-so-great 44%. When our service customers leave, they have an increasing propensity to leave the channel altogether. And, if they are middle-income or female, they lead this exodus. There’s a lot of them out there.

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