Tuesday, October 21, 2008

Is India Different?

J.D. Power just released its 2008 India Customer Service Index (CSI) Study for automobiles. They received responses from 5,594 owners of nearly 41 different vehicle models. The study measured satisfaction among vehicle owners who visited their authorized dealership service center for maintenance or repair work during the first 12 to 18 months of ownership.

Some of the more interesting findings are:
1. 77 percent of owners said they definitely would recommend their vehicle make, compared with 82 percent in 2007.
2. 64 percent of owners in 2008 said they would definitely repurchase their vehicle make, compared to 63 percent in 2007.
3. 94 percent of highly satisfied customers definitely would recommend their vehicle make, compared to 55 percent of customers with the lowest levels of satisfaction.
4. 84 percent of highly satisfied customers said they definitely would repurchase their vehicle make, compared to 43 percent of customers with the lowest satisfaction scores.
5. The cost of gasoline powered vehicles have risen by 7 percent since 2007, compared to diesel powered vehicles that had only a minimal increase since 2007.

Overall satisfaction is determined by J. D. Power on a 1000 point scale and includes measures of problems experienced , service quality, user-friendly service, service advisor, service initiation, service delivery and in-service experience. The highest score was achieved by Maruti Suzuki with a score of 820 points. The industry average increased by 3 points since 2007.

These scores look very similar to the US. Once again the impact of excellent service on loyalty and the willingness to recommend correlate highly.

The bottom line is that car manufacturers and dealers can easily see from these statistics that loyalty and repurchase relate to the overall satisfaction increases. The report seems to indicate that it only covered satisfaction from the service perspective. The concern that always comes to my mind is whether or not the survey should also measure salesman's influence as well as other business features such as ease of financing, location of the dealership and the general appearance of the dealership. These were not discussed in the limited version I saw of the report so I must add the caveat that I have not had access to the entire report. If they were not included this may have limited value since these other factors may be equally, if not more, important to loyalty; otherwise, if these other factors were included and had little or no impact, it might make an even stronger case for the value of service. I wonder what the NPS would tell them?

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