analyst note february 2014
DESCRIPTION
JD Power PIN for February 2014TRANSCRIPT
1 J.D. Power does not guarantee the accuracy, adequacy, or completeness of any information contained in this publication and is not responsible for any errors or omissions or for the results obtained from use of such information. Advertising claims cannot be based on information published in this publication. Reproduction of any material contained in this publication, including photocopying in part or in whole, is prohibited without the express written permission of J.D. Power . Any material quoted from this publication must be attributed to J.D. Power.
© 2013 J.D. Power and Associates, McGraw Hill Financial. All Rights Reserved.
Canada February 2014
For many dealership salespeople, delivery of a new
vehicle is a delicate balance. While it’s clear that the
delivery process significantly impacts customer
satisfaction with the sales process, it can mean spending
premium time away from the sales floor.
As a result, dealers have employed differing strategies
when it comes to the final vehicle delivery process, in
order to maximize both customer satisfaction as well the
bottom line. But among the strategies most often in place
(salesperson led delivery, employing a delivery specialist,
or a second delivery) which of these is most effective?
The 2013 Canadian Consumer Retail Experience Study
sheds light on this critical process and provides the
industry’s first look at a leading practice in this area.
According to the study, customers who had their
vehicle delivered by a delivery specialist had the
highest overall satisfaction with that process, with an
average score of 881 on a 1,000 point scale. That said,
adoption rates across the industry remain relatively
low. On average, 12% of new vehicle purchasers said
their vehicle delivery was handled by a specialist as
opposed to the salesperson.
However, the concept of delivery specialists is gaining
traction. Both on the non-luxury and luxury side of the
coin, top manufacturers in terms of specialist adoption
are either at, or very close to one-in-five new vehicle
deliveries conducted by a specialist. These OEs also
perform very well in the overall CRES study.
A critical finding from the 2013 study is the negative
impact on delivery process satisfaction in the event of a
second delivery. Although some dealers and
manufacturers utilize this as a satisfaction strategy,
study data shows that this is a sub-optimal process.
Interestingly, in the Non-Luxury segment, when a
specialist is involved in the initial delivery, the need for
a second delivery drops to 13% from 24%.
As many dealers and OEs now realize, the importance
of the new vehicle delivery has implications not just
for the overall satisfaction with the sales process for
its own sake, but for much broader strategic reasons
such as overall product satisfaction as well as the
customer’s intent to return for service.
Among purchasers who rated their purchase
experience as a 10 on a 10 point scale, 76% say they
will definitely return for service work that they have
to pay for. When that purchase experience dips to 7
out of 10, only 27% say they will definitely return.
The new-vehicle delivery is also a critical function in
terms of limiting perceived quality problems,
particularly regarding the types of problems that can
be classified as “Difficult to Use” as opposed to actual
manufacturing defects. Among owners who said their
delivery was rushed, 31% said they experienced at
least one problem in the first 90 days of ownership.
When the delivery took the “right amount of time”,
however, only 13% experienced a problem, cutting
the rate by more than half.
Behind the Numbers
Here’s the Deal on Delivery [email protected] 416-507-3254
SATISFACTION WITH DELIVERY IS HIGHEST WHEN CONDUCTED BY A SPECIALIST
Source: J.D. Power 2013 Canadian Consumer Retail Experience StudySM
881 873
840
800
820
840
860
880
900
Delivery Specialist Salesperson Returned forSecond Delivery
Del
iver
y P
roce
ss In
dex
Sco
re
(1,0
00
-po
int
scal
e)
2 J.D. Power and Associates does not guarantee the accuracy, adequacy, or completeness of any information contained in this publication and is not responsible for any errors or omissions or for the results obtained from use of such information. Advertising claims cannot be based on informati on published in this publication. Reproduction of any material contained in this publication, including photocopying in part or in whole, is prohibited without the express written permission of J .D. Power and Associates. Any material quoted from this publication must be attributed to J.D. Power and Associates.
©2014 J.D. Power and Associates, The McGraw-Hill Companies, Inc. All Rights Reserved.
Brian Murphy
416-507-3253 ▪ [email protected] February, 2014
61 19
20
49 48
3
New Vehicles Used Vehicles
Cash Lease Loan
50
54
58
62
66
70
Jan
-13
Fe
b-1
3
Ma
r-1
3
Ap
r-13
Ma
y-1
3
Jun
-13
Jul-
13
Au
g-1
3
Se
p-1
3
Oct-
13
Nov-1
3
De
c-1
3
Jan
-14
New Used
$470
$490
$510
$530
$550
$570
$590
Jan
-13
Fe
b-1
3
Ma
r-1
3
Ap
r-13
Ma
y-1
3
Jun
-13
Jul-
13
Au
g-1
3
Se
p-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan
-14
New Lease New Loan
VEHICLE PURCHASE TYPE Percent of Total Transactions (Past 12 Months)
DAYS TO TURN
MONTHLY PAYMENTS Average per Customer
PERCENT NEW-VEHICLE LOAN TERM 72 Months and Greater
57%
0%
10%
20%
30%
40%
50%
60%
70%
200
9
201
0
201
1
201
2
201
3
201
4
VEHICLE PRICE VS. CUSTOMER FACING PRICE Data from JDPA PIN Incentive Spending Report (ISR)
20%
30%
40%
50%
Jan
-13
Fe
b-1
3
Ma
r-1
3
Ap
r-13
Ma
y-1
3
Jun
-13
Jul-
13
Au
g-1
3
Se
p-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan
-14
% Negative Equity Trade-In %
PERCENT NEGATIVE EQUITY & TRADE-IN Percentage of negative equity vehicles at trade-in
$27,000
$28,000
$29,000
$30,000
$31,000
$32,000
$33,000
$34,000
Jan
-13
Fe
b-1
3
Ma
r-1
3
Ap
r-13
Ma
y-1
3
Jun
-13
Jul-
13
Au
g-1
3
Se
p-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan
-14
Vehicle Price Transaction Price