Quality talk

When the global car industry (heck even the electronics, finance, telecom, insurance, healthcare, homes and travel industries on a worldwide scale) talks about quality, all eyes focus on what J.D. Power has to say.

Headquartered in Westlake Village, Calif., J.D. Power and Associates is an ISO 9001-registered global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually and are regularly cited by manufacturers in their advertising and marketing campaigns.

Then there is J.D. Power Asia Pacific, established in 1990, which conducts customer satisfaction research and provides consulting services in the automotive, information technology and finance industries. It is from this regional office where we get the most relevant quality-related news for the local automotive industry.

J.D. Power Asia Pacific’s most recent news release is datelined "SINGAPORE: 28 OCTOBER 2006." In a report entitled "J.D. Power Asia Pacific 2006 Philippines Sales Satisfaction Index (SSI) Study," Ford ranks highest in customer satisfaction with the new-vehicle sales and delivery process in the Philippines.

The annual SSI Study, conducted independently by J.D. Power Asia Pacific since 2001, measures customer satisfaction with the new-vehicle purchase experience in the Philippine market. The study examines six factors that contribute to overall satisfaction with the sales experience. In order of importance, these factors are: delivery process, delivery timing, salesperson, paperwork, deal and dealer facility.

The overall industry average is 841 based on a 1,000-point scale. The study covers seven makes, and includes Hyundai for the first time. With an overall index score of 851, Ford moves up two positions from 2005 to rank highest in the study. Ford performed particularly well in the areas of delivery timing, dealer facility and deal.

"Ford has shortened its average delivery time from 4.6 days to just 3.5 days, setting the benchmark for the industry in 2006," said Gerrit Kuyntjes, managing director at J.D. Power Asia Pacific. "Ford also improves on its ability to deliver the vehicle at the promised time, demonstrating the principle that customer satisfaction is not just about efficiency in the process, but also about honoring commitments to customers."

Isuzu maintained its second place in the ranking, with an overall score of 846. Isuzu also leads the industry in three factors: delivery process, salesperson and paperwork. Overall sales-leader Toyota closely followed Isuzu with a score of 844.

The study finds that customers who take a test drive are more satisfied with the delivery process and the sales process overall. More than half of all Ford customers, for example, took a test drive of their new vehicle.

"Taking a test drive not only gives customers an idea of the features and driving experience of the vehicle, but is also an important time in which the salesperson can provide detailed explanations of the vehicle both in terms of its features and servicing requirements," said Kuyntjes. "It is a time when the quality of interaction with the salesperson can effectively influence satisfaction with the overall sales and delivery process."

The study also finds that customers experiencing any form of sales pressure — to take delivery at an inconvenient time or to pay/contract more than their budgeted amount, for example — leads to dissatisfaction with the sales and delivery process. Fewer than 20 percent of customers who report having an outstanding sales experience (those reporting SSI scores above 984 points) say they received some form of pressure from their selling dealer, compared to the industry average of 33 percent.

"While some amount of sales pressure is necessary to ensure the closure of the sale, judging the right amount of pressure the customer can bear before it becomes uncomfortable is a soft skill that salespeople develop with experience," said Kuyntjes.

The 2006 Philippines Sales Satisfaction Index Study is based on evaluations from more than 1,300 new-vehicle owners who are surveyed at two to six months of ownership. The fieldwork for the study was conducted from June 2006 to August 2006 and includes buyers who purchased their vehicles between December 2005 and June 2006.

In the area of aftersales, however, General Motors’ Chevrolet brand ranked highest in customer satisfaction with authorized dealer aftersales service in the Philippines, according to a separate J.D. Power Asia Pacific 2006 Philippines Customer Satisfaction Index Study dated 28 September 2006.

The Philippine CSI Study, now in its sixth year, is independently conducted by J.D. Power Asia Pacific to measure customer satisfaction with the aftersales service process. Overall customer satisfaction is measured by dealer performance in seven areas. In order of importance, they are: problems experienced, service quality, user-friendly service, service delivery, service advisor, service initiation and in-service experience.

The overall industry average CSI is 830 on a 1,000-point scale, a marginal improvement of 3 points from 2005. Three makes debut in the J.D. Power 2006 Philippines CSI Study: Chevrolet, Mazda and Hyundai.

Somewhat surprisingly for a newcomer, Chevrolet achieved the highest overall index score of 850. It also set the industry benchmark on five of the seven factors contributing to overall customer satisfaction: service quality, service advisor, service delivery, service initiation and user-friendly service.

Sister companies Ford and Mazda, both relative newcomers to the market, followed Chevrolet in the ranking in a tie, each with a score of 842. Ford is the most improved make in the study with a 34-point increase compared to 2005.  Ford’s largest gains are seen on problems experienced and on in-service experience, for which it also records the highest ratings in the industry.

Toyota, which ranked highest in 2005, received an index score of 835, three points behind Honda’s score of 838, which came in third. Toyota maintains its industry lead on problems experienced — the factor with the greatest impact on CSI.

The study also finds that customers who were notified they were due for a service and were contacted again after their service was completed, were considerably more satisfied than customers who were not contacted at all. Customers who are contacted both before and after their service rate their service dealer an average of 52 points above the industry average. In contrast, customers who were not contacted at all register an average score 12 points below the industry. Chevrolet and Ford performed particularly well in contacting customers both pre- and post-service.

"Simply getting in touch with the customer before and after performing the vehicle service goes a long way toward increasing customer satisfaction," said Kuyntjes. "Currently, only six percent of customers report that they were contacted by their dealer on both occasions. Apart from focusing on services that are expected, customer satisfaction can also be improved by delivering services that are not commonly provided but tend to have a noticeable positive impact on customers. Customers who are satisfied with the dealer’s service department are more likely to return to the dealer for service in the future and to repurchase another vehicle in the future."

The study also establishes that maintaining customer contact promotes loyalty and advocacy. More than 70 percent of customers who were contacted pre-and post-service express a definite intention to revisit the dealer for future service and to recommend the dealer to others. In contrast, fewer than half of those who were not contacted at all state they "definitely would" revisit dealer after the warranty expires, while just 51 percent state they "definitely would" recommend the dealer.

The 2006 Philippines CSI Study is based on evaluations from more than 1,000 new-vehicle owners surveyed at 12 to 18 months of ownership and includes customers who purchased their personal-use vehicles between October 2004 and June 2005.

The lesson? With the overall build quality and reliability getting closer and closer between different makes (even mixing in the high-end luxury brands), and with the all-important car styling (even of the relatively young Korean car industry) becoming yet another closely rivalled aspect, the ballgame goes back to the timeless virtue of good service.

While it used to be as simple as "Build it, and they will come;" now it’s "Satisfy them and they will come back."

Lastly (and this is something apparent in every industry), while Ford and Chevrolet are hardly at the top of the sales charts, there is something about guys fighting for a larger slice of the pie that gives them the impetus to offer that extra service.

In contrast, it’s very common for makes with fast-selling models to pile on "accessories" that they charge extra (often at exorbitant rates) just so you could get your vehicle earlier than what waiting in line would normally take.

The same applies to aftersales service. Drive into a popular brand’s service center and be prepared to wait. Go to a relatively slow-selling brand and be prepared to have a team of service staff waiting on you hand and foot and your car serviced first in line. Well, that’s business.

Here are some of your comments from last week.

Chaotic traffic is the result of absence of a national mass transport system and the unchanging culture of Filipinos. — A.F. Aquino, Pangasinan

Jeepneys running without headlights at night? Fine them P3,000, then give P1,000 to the enforcer and this problem will be resolved soonest. — 09202664571

Traffic on the so-called "express lane" along EDSA-South bound underneath the Kalayaan Flyover is slower than the Buendia bond lane. — 09179871156

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