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Sewells best practise: Rates should carry a satisfaction warning

"Cars of high build quality usually attract the best customer satisfaction ratings for servicing and repair. The more cynical might observe that if a car rarely goes wrong then repairers have less chance of being found lacking.

But clearly the build quality of even run-of-the-mill cars has improved massively in recent years, and this has had a lot to do with improving levels of satisfaction – the industry average per workshop is now less than 50 customer complaints a year.

Both franchised dealer and independent workshops have come to realise the major benefit of treating customers well – retention for future business. And, as frontline workshop staff will tell you, better customer relations benefit them through less stress in their jobs.

Behind all of this has been a substantial effort, especially by carmakers, to train customer-facing staff in the finer points of keeping the customer happy. However, our research suggests that franchised dealers could have become a little complacent.

It’s true that customers are more satisfied with independents because they have lower levels of expectation. However, price and value for money are also factors in satisfaction, and there is no doubt that franchised dealers charge an awful lot more than independents – 67% more in terms of hourly rates according to the RMI/Sewells 2004 Pay Guide.

But how many motorists know about these differences? How many really shop around for that once-a-year service? Not many, but motorists tend to know how much last year’s visit to a workshop cost them, and franchised dealers’ increasingly large year-on-year hikes in labour rates have not gone unnoticed. Over the last five years, independents increased their labour rates by just under 20% whereas franchised dealers applied an increase of nearly 30% from a much higher starting point. Any franchised dealer contemplating another sharp rise in labour rates this year should considering how this could damage customer satisfaction and, therefore, retention. They should also note the recent press reports that fleets and warranty companies are increasingly dissatisfied with franchised dealer labour rates.

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