Two customers seek service at a large car dealership in Linyi, Shandong province, on July 7. [Photo/Agencies]

J.D. Power study finds service matters more than sales

Chinese car dealers are being urged to shift their focus onto customer service from sales goals as dealer-customer relations have plunged to their lowest point since 2009.

According to a survey conducted in China by US-based global market research company J.D. Power, only 25 percent of customers said they would recommend their car dealers to their friends and relatives, only 23 percent said they would revisit their dealers when their car's warranty expires, and only 11 percent said they would purchase cars again from the same dealers.

The study surveyed 18,577 car owners in 57 Chinese cities from October 2015 to May 2016.

Ironically, the results come as dealers have been working to improve car owners' overall satisfaction. In the premium market, the survey results were up from 717 points out of 1,000 in 2015 to 742 in 2016; and in the mass market they were up from 664 points to 674 points.

A possible reason is that dealers might have been pushing their style of service but ended up paying insufficient attention to what customers actually wanted, the study said.

Hu Xiaolong, head of auto service and loyalty at J.D. Power China, said that for six years in a row "dealers caring about me" has been a top three item of concern among respondents who were asked for a wish list about after-sales experience.

He said meeting customers' demands was critical for the industry, as people are becoming increasingly concerned about their experience as car owners.

Charles Mills, J.D. Power's vice-president for global retail, said: "When they come to the dealers they have different and much higher expectations than when they go to quick-fix stores or the mama and papa in the alleyway."

And compared with US customers, Chinese customers always expect more, he said. "They are changing, they are evolving. And their expectations are increasing."

Mills said dealers who want to win business should change their mindset first and provide differentiated service.

"It begins with how brands and dealers view service," he said. "A lot of brands still call service after-sales. For me, that does not work. In reality the service experience is more important from the profit standpoint, and from the loyalty standpoint, and from the customer relationship standpoint."

Service has become a larger source of profit than new car sales, both in the United States and China, he said.

Mills said as cars are becoming more similar, the ability to differentiate in products is becoming extremely difficult, but there are still many opportunities to differentiate in the customer experience.

"Dealers should know their customers very well," Mills said. "They should know their names, know who they are, and provide a very personalized experience. 'You know me, care about me, and make me want to do business with you'."

However, he stressed that Rome was not built in a day. "It is a journey. We talk about service events, but in reality it is a continuous process, trying to keep customers with you and your brand."