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What is JD Power?

JD Power Deep Dive

J.D. Power is a globally recognized name when it comes to consumer insights and data analytics. Since being founded in 1968, the company has become influential across various industries due to its in-depth syndicated research reports and rankings based on consumer surveys. But what exactly is J.D. Power, and how did it establish itself as such a reputable authority on the voice of the customer?


This article will provide a comprehensive look at J.D. Power, including its history, range of services, survey methodology, notable awards and certifications, business model, impact on consumers and brands, criticisms, and why the company has remained so relevant after over 50 years. By the end, you’ll have a clear understanding of how J.D. Power leverages consumer data to benchmark brands and shape perceptions.



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Founding and Early History

J.D. Power and Associates was founded in 1968 by James David Power III in Agoura Hills, California. Known as “Dave” to his friends and colleagues, Power started the company out of his kitchen and initially focused exclusively on market research and consumer insights for the automotive industry.

At the time, Power saw that consumers lacked objective information to help guide their purchases. He sought to fill this need by surveying vehicle owners on their satisfaction and sharing those insights. This was the genesis of J.D. Power as we know it today.

In the beginning, the company mostly served auto dealers and manufacturers. Power conducted surveys of thousands of vehicle owners and compiled the results into syndicated research reports. This provided the industry with invaluable consumer feedback based on real ownership experiences.

 

Expansion Into Other Industries

While J.D. Power started out solely focused on the automotive industry, it steadily expanded into assessing consumer experiences across a range of industries and products. In the 1970s, still in the company’s early days, J.D. Power conducted pioneering research on customer satisfaction with banks and other financial institutions. This paved the way for the company to grow its research capabilities beyond just cars.

Over the following decades, J.D. Power leveraged its survey methodology, data analytics, and consumer insights to rate brands across industries like financial services, home building, utilities, healthcare, and travel. The company diversified its offerings to provide a holistic view of the consumer experience across multiple touchpoints. This expansion strategy allowed J.D. Power to cement itself as a leader in consumer insights across sectors, not just automotive.

While automotive research remains core to J.D. Power’s business today, the company has established influential brand studies and awards programs in industries from insurance to telecommunications to airlines. By broadening into new research areas over its 50+ year history, J.D. Power has greatly expanded its reach, relevance and perception as a trusted consumer insights firm.

 

Consumer Insights and Research

J.D. Power is best known for its extensive consumer insights research based on large-scale surveys of verified product owners. The company conducts hundreds of syndicated studies every year across a wide range of industries and products to uncover detailed insights into customer perceptions.

These annual studies benchmark brands and products on metrics like quality, dependability, customer satisfaction, and shopping experience. J.D. Power collects data by sending out surveys to recent buyers and customers of a product or service. The surveys aim to capture the “voice of the customer” by asking about all aspects of their ownership experience.

For example, in the automotive industry, J.D. Power surveys new vehicle owners after 90 days of ownership to get feedback on quality and early dependability. It then surveys these same owners again after 3 years of ownership to understand long-term satisfaction and reliability perceptions.

The survey data collects information on things like problems experienced, service satisfaction, dealership experience and more. By gathering large sample sizes of consumer feedback, J.D. Power is able to benchmark brands against competitors and industry averages to identify pain points as well as excellence.

 

Services and Offerings

J.D. Power is best known for its influential quality and customer satisfaction rankings and awards, especially in the automotive industry. Each year, the company conducts hundreds of independent and unbiased studies across multiple industries and product categories to rate brands and models. J.D. Power surveys thousands of verified owners and customers to gain insights into their experiences with a product or service.

The company then crunches this data to benchmark brands and identify top performers. J.D. Power is highly regarded for its annual Vehicle Dependability Study, which rates models based on the number of problems experienced per 100 vehicles during the past 12 months by original owners of 3-year-old vehicles. The iconic Initial Quality Study looks at problems experienced by owners during the first 90 days of ownership. These and other automotive studies, covering areas like sales satisfaction and performance, help guide new car buyers and influence brand perceptions.

In addition to rankings and awards, J.D. Power offers data analytics services to help companies understand the “voice of the customer” and gain actionable insights from consumer survey data. The company leverages techniques like predictive analytics to identify key drivers of satisfaction and behavior. J.D. Power can integrate its analytics into a company’s operations to enable data-driven decision making to improve products and enhance customer experience.

The company also runs a certification program that benchmarks brands based on customer satisfaction surveys. Companies that meet J.D. Power’s satisfaction criteria can become certified and gain the right to promote their certification in marketing materials. This provides brands with an independent and credible trust mark to highlight their customer commitment. For example, J.D. Power’s Certified Customer Service Program recognizes brands that excel at service interactions.

 

Survey Methodology

J.D. Power utilizes an extensive survey methodology to collect consumer insights across industries. The process involves sending detailed surveys to verified owners and customers to gather data on their experiences. Some key aspects of their methodology include:

 

  • Surveys go to recent buyers and owners in a given product/service category
  • Questions cover quality, dependability, customer service, shopping experience, and overall satisfaction
  • Verification ensures that only genuine owners provide feedback
  • Very large sample sizes, often in the tens of thousands, provide statistical significance
  • Benchmarking standards are established to allow for insightful comparisons
  • Data is collected and analyzed over multi-year periods to identify trends
  • Advanced analytics, AI, and natural language processing provide additional insights

 

This rigorous methodology allows J.D. Power to collect consumer insights that would be difficult for individual companies to access on their own. The large sample sizes and benchmarking ensure that the results provide meaningful comparisons between brands within a market.

 

Awards and Rankings

One of the most well-known aspects of J.D. Power is the prestigious awards and rankings it gives out each year. These recognitions have become incredibly influential in multiple industries.

J.D. Power conducts hundreds of studies across industries every year to rate brands and products on criteria like quality, dependability, performance, and customer satisfaction. Based on a brand’s results in these studies compared to set benchmarks and competitors, J.D. Power bestows awards and certifications.

Some of the most coveted include the J.D. Power Vehicle Dependability Awards, Initial Quality Study Awards, and Customer Service Awards. Within the auto industry, these awards recognize vehicles and brands that excel in areas like long-term reliability, owner-reported problems, and dealership service experience.

Winning a J.D. Power award has become a huge marketing tool for brands. Auto companies prominently display award logos in ads and at dealerships. The awards provide bragging rights and credibility based on J.D. Power’s reputation. Brands leverage the awards to positively influence consumer perceptions.

In addition to awards, J.D. Power’s competitive benchmark rankings also impact purchase decisions and brand reputations. Consumers often reference J.D. Power rankings on quality and dependability when choosing between makes and models. The rankings shape perceptions of which brands build better vehicles.

By distinguishing top performers in different industries, J.D. Power’s awards and rankings provide brands with prestigious recognitions to market while influencing consumer opinions. The competitive nature of the awards inspires brands to improve to earn honors.

 

Business Model and Revenue

J.D. Power has a few key ways in which it generates revenue as a company. While best known for its consumer surveys and rankings, J.D. Power earns a significant portion of its revenue by charging companies for access to its data analytics services. These services are designed to provide clients with detailed insights into consumer preferences and behaviors. By leveraging J.D. Power’s vast repository of consumer data, companies can gain valuable market intelligence to guide their product development, marketing, and customer experience strategies.

Specifically, J.D. Power offers data analytics solutions to help companies understand the “voice of the customer” and identify areas for improvement across the customer journey. This allows brands to pinpoint pain points in the customer experience and take targeted action to increase satisfaction. J.D. Power is able to compile this detailed consumer data through the hundreds of studies it conducts annually across industries. Companies pay substantial fees to access these insights.

In addition to data services, J.D. Power also generates revenue through its licensed awards programs. When a company performs highly in J.D. Power’s rankings and receives an award, they have the option to pay for the rights to promote and advertise using that award. The prestige associated with J.D. Power awards causes many brands to see value in licensing them as part of their marketing and communications strategy.

Between its data analytics services and licensed awards, J.D. Power has established a successful business model by selling access to the unique consumer insights it develops through syndicated research. The demand for this exclusive data is what allows J.D. Power to impact a range of industries.

 

Impact on Consumers

J.D. Power’s rankings and awards have a major influence on consumer perceptions of brands and purchasing decisions across industries. The company’s reputation for impartiality and expertise over 50+ years lends credibility to its ratings.

For car buyers especially, J.D. Power’s Initial Quality and Vehicle Dependability studies are highly regarded benchmarks. Consumers check these ratings when researching potential purchases, as they provide trusted insights compared to advertising claims. High rankings can validate perceptions of quality and reliability, while low rankings may raise red flags.

Likewise, brands heavily promote J.D. Power awards in marketing campaigns. The “J.D. Power Customer Satisfaction Award” badge on vehicles at dealerships shapes first impressions. Consumers view it as an authoritative, third-party endorsement of meeting high standards.

In essence, J.D. Power serves as an institution that guides not just marketing, but also consumer decision-making. Its impartiality compared to brands’ own claims gives it influence. While consumers may be skeptical of advertising, J.D. Power’s 50+ years of experience provide unique insights they can trust.

 

Impact on Brands

J.D. Power’s rankings and consumer insights have a significant impact on how brands market themselves and improve their products and services. The awards and certifications are heavily touted in advertising and marketing campaigns, giving brands bragging rights and credibility.

The rankings provide an independent, third-party endorsement based on actual customer experiences rather than claims made by the company itself. Given J.D. Power’s reputation, brands can leverage high rankings to shape consumer perceptions, differentiate themselves from competitors, justify pricing, and drive sales.

In addition, the granular data from J.D. Power’s surveys identifies problem areas and opportunities for improvement. By seeing exactly where customers are dissatisfied or where a competitor is outperforming them in satisfaction, brands can target investments to address weak points. This helps them enhance the customer experience and in turn improve their J.D. Power scores over time.

Brands closely monitor J.D. Power benchmarks and rankings as key performance indicators. The data informs strategic decisions on where to allocate resources to strengthen brand loyalty and satisfaction. Having the voice of the customer via J.D. Power provides actionable insights that brands may not be able to obtain on their own.

 

Criticisms

While J.D. Power is a highly influential company, it has faced some criticisms over the years regarding potential conflicts of interest and questions about the objectivity of its rankings and awards.

One of the main criticisms stems from J.D. Power’s business model. The company charges manufacturers and service providers to access its proprietary data and insights. This means that brands essentially pay J.D. Power for the opportunity to use its awards and certifications in their marketing. Some argue this introduces potential bias, as J.D. Power benefits financially from keeping its clients happy.

There have also been accusations that brands try to manipulate their J.D. Power ratings by offering incentives to customers for filling out positive survey feedback. This could skew the results and call into question how reflective the rankings are of true customer satisfaction.

Additionally, critics have pointed out that brands frequently trumpet a high ranking in one specific J.D. Power award, while ignoring poor scores in other studies. This selective promotion raises concerns about the usefulness of the awards for consumers looking for objective assessments.

Overall, while J.D. Power states that its data is unbiased, the incentives created by its business model have led some to be skeptical of potential conflicts of interest. However, the company remains highly influential due to its reputation and reach built up over decades in business.

 

Why J.D. Power Matters

Over the past five decades, J.D. Power has established itself as an authoritative voice that both consumers and companies listen to. The company’s reputation carries significant weight due to several key factors:

 

Established Reputation Over 50+ Years

J.D. Power has been conducting syndicated research since 1968, allowing it to build up an esteemed reputation over more than 50 years. The longevity of the company lends credibility to its data and insights.

 

Unique Consumer Insights Competitors Don’t Have Access To

The breadth and depth of J.D. Power’s consumer survey data is unmatched, providing insights that competitors simply don’t have access to. From extensive vehicle owner surveys to customer satisfaction benchmarks across industries, J.D. Power’s data offers a unique window into the voice of the customer.

 

Identifies Pain Points and Opportunities for Improvement

By leveraging its consumer insights, J.D. Power is able to identify pain points in the customer experience and highlight areas for brands to improve. This allows companies to understand where they are falling short of customer expectations and make the necessary changes to their products and services.

 

Competitors

J.D. Power faces competition from several different types of companies in the consumer insights and market research space, including:

 

Other Consumer Research Firms

Some of J.D. Power’s biggest competitors are other large, general market research firms like Nielsen, Forrester Research, Gartner, and Ipsos. These firms conduct consumer surveys, data analytics, and market intelligence across industries similar to J.D. Power. Nielsen specifically competes with J.D. Power in automotive research.

 

Industry-Specific Competitors

Within specific industries, J.D. Power faces competition from niche research firms focused on that sector. For example, in automotive, Edmunds and Kelley Blue Book directly compete with J.D. Power’s vehicle reviews, quality rankings, and pricing data. In financial services, J.D. Power competes with firms like JD Power Associates that rank customer satisfaction at banks and credit card companies.

While other research firms may compete for market share, J.D. Power’s long history, established brand name, and focus on consumer insights differentiate it from competitors in most industries.

 

Recent Developments

In recent years, J.D. Power has continued to evolve and expand its offerings through key acquisitions and new product launches.

One of the most significant developments came in 2016 when J.D. Power was acquired by the private equity firm Thoma Bravo. This provided additional resources and capital for J.D. Power to accelerate its growth and acquisition strategy.

Since being acquired, J.D. Power has launched a variety of new products and services to meet changing customer needs. Some examples include:

 

  • J.D. Power Pulse – real-time customer satisfaction measurement platform
  • J.D. Power Vision – AI and machine learning data analytics capabilities
  • J.D. Power Foresight – automotive research and forecasting tools
  • J.D. Power FinTech Practice – research for financial services companies

 

Additionally, J.D. Power acquired a number of companies to complement its existing offerings including Voci Technologies, a speech analytics provider, and Power Information Network, an automotive data company.

Through these new product launches and strategic acquisitions, J.D. Power continues to expand its capabilities to provide actionable data insights and benchmarking research to clients across industries.

 

Conclusion

In summary, J.D. Power has become an influential force in consumer insights and market research since its founding over 50 years ago. What started as a one-man operation focused on the auto industry has expanded into a global company providing data analytics and consumer intelligence across multiple sectors.

While best known for its annual quality and satisfaction studies and awards, J.D. Power offers a wide range of proprietary data services to help businesses understand the voice of the customer. Its survey methodology and benchmarks allow for detailed comparisons and rankings that impact consumer perceptions and guide marketing strategies.

Despite some criticisms about potential conflicts of interest, J.D. Power has established itself as a leader in syndicated market research. Its reputation for independence and objectivity lends credibility to its data. J.D. Power continues to leverage consumer insights to help brands identify areas for improvement, connect with customers, and drive better business decisions.

 

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Questions About JD Power

JD Power is a global marketing and consumer data company that conducts independent market research surveys across various industries to measure customer satisfaction and product quality. In Canada, JD Power conducts annual vehicle quality and dependability studies, customer service satisfaction studies for dealerships, and award programs across the automotive industry.

 

JD Power’s Canadian automotive studies survey thousands of vehicle owners on problems experienced with their new vehicles in the first 90 days of ownership to determine initial quality. They also survey owners of 3-year old vehicles about problems experienced in the previous 12 months to evaluate longer-term dependability.



JD Power automotive studies in Canada are based on survey responses from thousands of verified owners of specific vehicle models. Surveys ask about problems experienced across various aspects like engine, transmission, infotainment, seats, etc. Responses are aggregated and analyzed to determine the number of problems per 100 vehicles – called the PP100 score. Lower scores indicate higher quality and dependability.

 

Data is also sliced by brand, vehicle segment, and individual models to rank and compare quality and dependability by manufacturer. Awards are then given out for top performers. The process ensures impartiality and credibility of the results.

Key JD Power automotive awards given out in Canada include:

 

– Initial Quality Study (IQS) Awards: For best initial quality by brand and individual model

– Vehicle Dependability Study Awards: For best longer-term dependability

– Customer Service Index (CSI) Awards: For excellence in dealer service

– Automotive Performance, Execution and Layout (APEAL) Awards: For most appealing vehicle design

– Tech Experience Index (TXI) Awards: For best in-vehicle technology

 

Other awards are given out for top mass market and luxury brands across studies. Winning an award signals to customers that a vehicle delivers an exemplary ownership experience.

JD Power’s Canadian dependability rankings allow consumers to see which vehicle brands, models and types have been experiencing the fewest issues after 3 years of ownership. This data offers an additional indicator beyond critics reviews and safety ratings for buyers to evaluate predicted longer-term reliability.

 

Consumers can cross-shop dependability ratings on specific models they are considering to select vehicles likely to hold up well over time. This can help minimize ownership headaches and unexpected repair bills down the road. Reviewing rankings can focus research towards shopping vehicles scoring well for dependability.

Winning JD Power awards provides a credible third-party endorsement that manufacturers can use to promote the quality and dependability of their vehicles to attract customers. Manufacturers often highlight specific models awarded for top dependability or initial quality in their marketing.

 

Dealers can similarly promote to customers that they deliver award-winning service, if certified through JD Power’s dealer programs. This validation from an independent, trusted source helps build brand reputation in a competitive market. It also signals that customer satisfaction is a priority.



The JD Power Circle of Excellence award recognizes auto dealers in Canada that have excelled in customer service satisfaction over the past year, as measured by surveys of verified owners who visited dealership service departments.

 

Winning dealers must meet strict criteria in categories like service quality, service advisor helpfulness, repair quality and fairness of charges to earn the Circle of Excellence honor. It designates dealers delivering overall outstanding customer care. This dealer-level recognition is useful for consumers seeking reputable dealers to purchase and service vehicles.



As the automotive landscape evolves, JD Power is constantly updating its research methodologies to ensure market representativeness and relevance. For example, survey questions for electric vehicles focus on aspects like battery range, charging time and electric powertrain instead of traditional engine and transmission performance.

 

Separate dependability questions around battery packs, electric motors and charging have also been introduced as EVs age to accurately benchmark issues owners encounter. Adapting research for emerging vehicle technologies and ownership experiences allows JD Power automotive studies to remain a gold standard as markets transform.



JD Power’s Canadian auto insurance studies measure customer satisfaction across five factors: interaction; price; policy offerings; billing and payment; and claims. Survey results benchmark performance on metrics like ease of reaching a representative, satisfaction with value for price paid and fairness of claim settlements.

 

Insurers are ranked on an overall 1000-point scale with higher scores indicating greater customer satisfaction. Customers of top-scoring firms report fewer issues, perceive better value and would more readily recommend their provider – signaling superior customer care. The study offers consumers a view into real-world service levels across insurers.

While best known in automotive, JD Power also conducts influential customer satisfaction research, data analytics and advisory work with major Canadian firms across industries like:

 

– Banking/Finance: TD Bank, RBC, Scotiabank, CIBC

– Telecoms: Bell, Rogers, Telus

– Insurance: Desjardins, Intact, Belairdirect

– Airlines: Air Canada

– Retail/ecommerce: Best Buy, Hudson’s Bay, Loblaws

 

JD Power leverages decades of research experience to help these companies transform insights into improved customer experiences and business performance.



JD Power’s Canadian retail research tracks the evolving customer journey to uncover pain points impacting satisfaction across areas like store experience, merchandise, pricing and staff. Benchmark performance insights help retailers diagnose problem areas and guide patient journey improvements.

 

Omnichannel studies also connect experiences with satisfaction across brick-and-mortar, call centers, apps, websites and fulfillment. Research identifies best practices to integrate channels and meet rising consumer expectations. These insights strengthen retail loyalty, advocacy and growth.

Some key limitations and criticisms of JD Power studies include:

 

– Survey samples may not fully reflect all customer subsets

– Self-reported data relies on perception, memory accuracy

– Proprietary models not fully disclosed to public scrutiny

– Industry sponsorship opens potential bias questions

– Rankings simplified into a score may overlook nuances

 

However, JD Power works to maximize sample diversity, validates responses, discloses basics of weighting calculations, maintains strict independence policies, and continues advancing research models to uphold reliability as an impartial industry benchmark. But results still need contextual interpreting.



JD Power’s Canadian telecom studies offer consumers an independent look at the customer service and satisfaction real-world wireless and wireline subscribers are experiencing across major providers like Rogers, Bell and Telus.

 

Performance metrics benchmark areas like network quality, plan value, billing, offerings and the retail sales experience. Consumers can review scores over multiple years to see provider strengths, weaknesses and areas of improvement or decline. These insights supplement plan and network comparisons to guide selection.

JD Power banking research on top drivers of Canadian customer satisfaction reveals convenience factors like branch/ATM locations, mobile app features and website tools enabling self-service are growing in influence. Speed and efficiency dealing with issues also rate highly.

 

However, human interactions remain vital – especially for problem resolution and advisory services. Canadian bank customers still place high importance on empathetic, knowledgeable and transparent assistance from branch staff and call center representatives when needed. Blending digital convenience with individualized personal care is key.



JD Power determines overall Canadian retail bank satisfaction rankings by surveying thousands of customers across the top eight financial institutions. Feedback benchmarks performance on 10 factors like channel activities, convenience, product offerings, communications and more.

 

An overall score out of 1000 summarizes performance across study aspects, with higher scores signaling greater customer satisfaction. Customers of top-ranked banks report better experiences, fewer issues and stronger loyalty. The rigor offers consumers an objective view into comparative bank service levels.



Consumer interest around corporate environmental sustainability and climate action is rising sharply. JD Power has begun tracking how such perceptions influence behaviors like purchase decisions and brand loyalty. This research, though still emerging, helps companies benchmark progress on eco-initiatives against customer expectations and use insights to craft responsive strategies.

 

As stakeholders demand businesses more forcefully address impacts, robust data will become increasingly vital for navigation and risk mitigation. JD Power’s legacy consumer understanding lends an advantage in illuminating this evolving arena for clients.

As blockchain transforms operations and data exchange across industries, JD Power is exploring applications within its research and advisory services. Blockchain-enabled consumer surveys and data gathering could strengthen response validation, transparency and insights delivery. Partnerships with blockchain data platforms may also open new customer experience data streams.

 

Additionally, providing benchmarking, recommendations and predictive analytics to clients on blockchain adoption strategies tailored to their customers represents a significant consultative opportunity given JD Power’s trust and impartiality advantages.

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