IMPACT OF CUSTOMER SATISFACTION ON FINANCIAL RESULTS OF CAR SERVICING COMPANIES: FINDINGS FROM SLOVENIA

In this study, we explore the applicability of a service profit chain concept for the authorized car servicing network of five European car brands in Slovenia. Under this concept, increased quality positively influences customer satisfaction, which in turn leads to better financial results through increased customer loyalty. We demonstrated that there are significant differences among the three size classes of car servicing companies. At the same average level of customer satisfaction, there is a strong negative dependence between increases of customer satisfaction and financial results for the small-sized car servicing companies, and a positive dependence between those two for the medium-sized and large-sized car servicing companies, which is moderate for the former and very strong for the latter. It seems that the relationship between the overall customer satisfaction and financial results is largely dependent on the level of competition in the local environment. Bigger car servicing companies are usually located in cities, where there are often other authorised same brand car servicing companies. Hence, it is not that difficult for customers to switch to a different car servicing company if they become dissatisfied with the services. In those circumstances it makes sense to invest more into high customer satisfaction, because it leads to high customer loyalty. Loyal customers are namely less likely to change a car servicing company and are less susceptible to higher hourly rates. The results also suggest that a certain optimal level of customer satisfaction exists and whe n this level of satisfaction is surpassed, the financial results actually do not improve any more. Moreover, they usually deteriorate.