Lack of attention from the salesperson is the most frequently cited non-price-related reason for customer rejection of European premium and volume automotive brands, while poor interior design is the top non-price-related reason for rejection of non-European volume brands in Germany, according to the J.D. Power and Associates 2008 Germany Automotive Shopper Study released.

The inaugural study analyzes reasons that new-vehicle shoppers may reject certain models, brands or dealerships, as well as the factors that influence customer satisfaction with the new-vehicle sales process. The study also examines customer shopping habits and reveals strengths and weaknesses in the selling process, as well as their influence on customer satisfaction. Customer satisfaction with the new-vehicle sales process is based on five factors (listed in order of importance): delivery process (34%); dealership facility (20%); salesperson (17%); paperwork process (17%); and negotiation of the deal (12%).

The study finds that as customer satisfaction with attentiveness of the salesperson increases, the likelihood that the shopper will reject a brand due to price or product reasons decreases.

“High satisfaction with dealer and salesperson performance make it significantly less likely that the shopper will reject due to price,” said Dr. Tobias Schutz, director at J.D. Power and Associates, Munich. “When sales processes are fully aligned to meet shopper expectations, customer service can, to some extent, compensate for product deficiencies and price concerns.”

Of the 11 makes included in the study, BMW, Mercedes-Benz, Renault and Toyota are amongst the highest-ranked brands for overall sales satisfaction with the sales personnel, paperwork and delivery processes.

The study also finds that the satisfaction levels are higher, on average, among customers who purchase their vehicles from manufacturer-owned dealerships (known as “Niederlassungen”), or smaller independent dealerships, compared with customers who purchase from medium or large dealerships. Customers who purchase from Niederlassungen dealerships are particularly satisfied with the dealership facility and the paperwork and delivery processes. Customers who purchase from smaller independent dealerships are being particularly satisfied with the interactions with salespersons.

“Niederlassungen dealerships tend to be more flexible and are able to offer competitive prices to potential buyers, while smaller independent dealerships are able to manage personal relationships with customers,” said Schutz.  In order to increase satisfaction levels and potentially gain new and repeat sales, medium and large and dealerships in particular should focus specifically on offering competitive prices and developing personal relationships with buyers.”

While there is no significant difference in overall satisfaction ratings provided by male and female customers, the salesperson’s gender does have a substantial impact on satisfaction with the overall shopping experience. The study finds that while male shoppers appreciate assistance by female salespersons, female shoppers may be not be as appreciative when served by female salespersons.

“The study also finds that female shoppers tend to reject relatively often due to product issues, such as interior styling, exterior design or lack of room in the cargo area or trunk,” said Schutz. “In order to conquest sales in the down turned economy, dealerships need to consciously manage their sales personnel gender mix when dealing with shoppers, in addition to offering diverse product availability.”

Additionally, the study finds that among customers who say they are “extremely satisfied” with the purchase process, 75 percent report that they are willing to recommend their dealership to friends and family. In contrast, among all other customers, only 27 percent report that they are willing to recommend their dealership to friends and family.

“J.D. Power’s research repeatedly finds that recommendations from customers are crucial for the economic success of dealerships, and it is evident that there is a strong relationship between overall customer satisfaction and willingness of customers to recommend their dealerships,” said Schutz. “The same correlation can also be observed when examining the likelihood of new-vehicle customers to have their vehicle serviced at the selling dealership.”

The study also finds the following key purchase behavior and decision drivers among new-vehicle shoppers in Germany:
• Satisfaction among non-European volume brand customers is significantly higher than satisfaction among European volume brand clients.
• Younger shoppers (those younger than 30 years old) are the single-most-dissatisfied demographic segment, while older shoppers (ages 50 and older) are the most satisfied, on average.
• Younger shoppers are more price-driven when making vehicle-purchase decisions, while older shoppers are more likely to base decisions on their prior experience with a make and the durability of the vehicle model.
• Top reasons cited by customers for purchasing a particular model include: low price (15%); good past experience with the make (14%); and obtaining a satisfactory deal (11%). 

The Germany Automotive Shopper Study is based on responses from more than 1,500 customers who purchased a new vehicle during the past year. The study was fielded in September and October 2008.

Courtesy: J.D. Power and Associates

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Posted by Naresh Koshti on 26 November, 2008 11:35:48 AM IST #