TORONTO (Aug. 15, 2006) — Among Canadian automotive service providers, Fountain Tire Corp. has been ranked highest in overall customer satisfaction, according to the latest J.D. Power and Associates 2006 Canadian Customer Commitment Index Study.
Now in its ninth year, the study measures the service satisfaction and loyalty of owners of 2- to 12-year-old vehicles. J.D. Power, a global marketing information services firm based in Westlake Village, Calif., said it examines five key factors when determining overall satisfaction and loyalty with a service provider: appointment/check-in; service advisor; work quality; after service; and customer orientation.
Fountain Tire improved by 12 rank positions to lead the rankings, with an index score of 876 points on a 1,000-point scale. The Edmonton, Alberta-based tire dealership posted improvements across all aspects of the service experience, particularly in the after-service factor, Power said. Following Fountain Tire in the rankings were Autopro with 873 points and Petro-Canada Certigard with 869.
The “Independent Repair Shops” category achieved a higher satisfaction score than Fountain Tire, Power noted, but is not included in the ranking because it is a channel as opposed to a branded provider.
“Tire stores have always had very good relationships with their customers, and this is the third time a tire facility has been the top-ranked service provider in the study,” said Rohan Lobo, senior manager of automotive research at J.D. Power in Toronto.
“While Fountain Tire's relationships with customers often begin with a tire 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-tire work,” he added.
According to the Power study, customer satisfaction has improved for the industry as a whole by 8 index points—the largest recorded increase since the study was redesigned in 2003. The service station channel showed the strongest improvement, increasing 17 points from 2005, followed by tire specialists with an 11-point gain.
The study also found that after five consecutive years of losing market share to car dealerships, aftermarket service providers have stabilized their share of service opportunities. Over this time period, dealerships have steadily increased their share of the service market, hitting a high point in 2005 at 45 percent—up from 40 percent in 2002. In 2006, car dealerships lost 1 percentage point of service share to aftermarket brands, creating a 44 percent/56 percent mix between dealers and aftermarket providers. This loss was confined to vehicles that were 2 to 3 and 8 to 12 years old, with dealerships being able to defend their share among vehicles in the 4- to 7-year-old bracket, Power said.
Each percentage point of share translates into almost $90 million in service revenue annually for car dealerships in Canada, the firm explained.
“The peak selling years of 1999 through 2003 produced a bulge in the number of vehicles that until recently were under warranty,” Mr. Lobo said. “The tendency of owners to gravitate to (car) 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 merchandisers—including Canadian Tire Corp., Wal-Mart Stores Inc. and Costco Wholesale Corp.—and quick lube operations are becoming more price sensitive. While cost is increasing in importance as a criteria for selecting these providers, the number of mass merchant customers who say they would “definitely” return or recommend their facility is the lowest of any channel, Power said.
“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,” Mr. Lobo said. “Although this model can create increased service traffic, it can also negatively impact retention and advocacy.”
The 2006 Canadian Customer Commitment Index Study is based on responses from 16,258 owners of 2- to 12-year-old vehicles. Owners were surveyed in December 2005 and April 2006.