J.D. Power: Service "Upsells" Aren't As Common As You Think

April 6, 2011

It's not the message about imminent car repairs that's important, but how it's delivered.

That's what J.D. Power discovered about maintenance and repair services offered at car dealerships in its recent study of customer service.

The study recorded the reactions of nearly 100,000 owners and lessees of 2006 to 2010 model year vehicles contacted between October and December 2010.

At question was the often maligned practice common to auto repair shops of all stripes--the upsell. For the uninitiated, the upsell is when dealers suggest service above and beyond the maintenance requested by the owner.

The Power survey found only 7 percent of the respondents reported that their dealer "attempted to sell them service work that they perceived as unnecessary." But upselling may be in the eye of the beholder, or so the Customer Service Index (CSI) numbers reflect.

Those repair customers who did not perceive that they had been upsold rated the dealers at 780 out of a possible 1000 CSI. When consumers felt they had been upsold, the rating fell nearly 140 points to 642. This prompted J.D. Power research director, Jon Osborn to comment, "it is key for dealerships to properly train their staff in the subtleties involved in adequately explaining the necessity and value of additional services without placing undue sales pressure on the customer."

Another finding seems more predictable: only 4 percent of owners of one-year-old vehicles thought they had been upsold, while 9 percent of the owners of four-year-old vehicles thought that unnecessary work had been sold. As the vehicle exits the warranty period and more of the repair bills become the responsibility of the owner, it would make sense that the consumer would be more resistant to suggested work. At play could be the same mindset that plagues healthcare reform--as true costs are revealed only over time.

There is good news if you regularly pass through the overhead doors to a Lexus Service Department. That brand's service was rated at 846, which was the highest rating for the luxury category and the highest overall. The lowest rating went to Suzuki, which is labeled a mass-market brand and comes in at 724.

Osborn said there was good and bad news for car dealer service operations. The good news first - their competitiveness in cost and convenience has made inroads into the market share of independents. The bad news is that poor new car sales for the past three years and projections of the same until 2013 will mean a reduced volume of in-warranty work. This will make market share and customer loyalty a priority in coming years.

Maybe that isn't bad news, so much as a challenge.

[PR Newswire]

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