Winnipeg Free Press - PRINT EDITION

He's got the power

J.D. Power (yes, he's real) talks about how his company virtually invented consumer satisfaction ratings

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Over the years, J.D. Power and Associates has had a lot of influence in the automobile industry.

But the founder of the company that virtually invented the "consumer satisfaction" ratings in the auto industry, J.D. (Dave) Power, has never been a car nut.

In an interview with the Free Press, Power said he made a point of never driving any car model that was at the top of his list.

"I have a 2003 Mercury Marauder and prior to that I had an Impala SS -- the last of the front-wheel drive Impalas in the late '90s. I also drove a Jaguar when it was in the dumps and I had an Audi 5000 when it had the unintended acceleration problems. Oh yeah," he added. "I also drove an Oldsmobile diesel."

The latter model apparently performed so poorly some say it damaged the North American passenger diesel market for the next 20 years after its demise in the mid-'80s.

In a new book called Power: How J.D. Power III Became the Auto Industry's Adviser, Confessor, and Eyewitness to History, Power shared experiences from 50 years in the auto industry with the book's authors Sarah Morgans and Bill Thorness.

The company was sold to McGraw Hill Financial in 2005 and it now does customer satisfaction market research in industries including consumer electronics, energy, finance, health care, homes, car and home insurance, retail, telecom and travel.

But it's the auto industry 82 year-old Dave Power (and his wife and kids) blazed a trail in originally from their kitchen table of their home near Calabasas, Calif.

The Toyota Motor Co. was their first client in the late '60s that understood the marketing power of customer satisfaction surveys.

But it wasn't until 1973 that his independently produced survey results attracted media attention and, subsequently, manufacturers' attention.

It was a particularly troubling issue with a feature on the reliability of the then-new Mazda rotary engine in 1973 that the J.D. Power name rose in notoriety and value as a truly independent gauge of customer satisfaction.

"Mazda did not buy the survey, but everyone else did and one of the other companies, I think it was Ford, released the information to the Wall Street Journal," he said. "There was a story on the front page of that paper the next day and Mazda wanted to talk right away."

That incident made him realize the potential popular interest in the independent surveys he was doing.

A few years later, Subaru quoted its own high ranking in a high-profile ad on a Super Bowl broadcast and that made it clear to Power there was commercial potential in the manner in which the subjects of the surveys used the results.

Through it all, the family firm simultaneously produced independent surveys as well as doing fee-for-service quality consultations with the manufacturers, often vetting new models before commercial production began.

He said one of the reasons the yearly awards based on in-depth consumer surveys have maintained their value in the marketplace has been Power's assiduous separation of church and state.

Many years ago, he had a conversation with the retired chief legal counsel of the Hearst Publications, one of whose titles was Good Housekeeping. Back in the day, the "Good Housekeeping Seal of Approval" was a big deal.

"He told me to watch out and not do what they did," he said, which was effectively to charge a fee for inclusion in the Good Housekeeping program. "You can't sell the award. I always made sure the people who administer the awards have to be separate from those selling the research. That was important advice for me."

It was the auto industry that established the firm's credentials and the one it is still most widely recognized with. Power said the only reason he started work in other sectors was because he was asked to by other industries.

The airline industry, one people are never shy of expressing their opinions about, was among the first.

As an example of the kind of influence the J.D, Power rankings had, he was asked to meet the CEO of Continental Airlines, Gordon Bethune, after that U.S. airline ranked last in a survey in the mid-'90s.

"He had just taken over that airline and wanted to know what he had to do to get to be first," Power said. "We explained what the top three were doing and what Continental wasn't doing. He got to work on it, and the airline went from last place to first place and he wrote a book about it."

It took more than a couple of decades for Power to build his company into the strong brand it is now (and when he sold it in 2005).

Market research has proliferated and changed a lot over those years, but there are not many examples of brands that can challenge the value of a top ranking in a J.D. Power survey.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition November 2, 2013 $sourceSection0

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About Martin Cash

Martin Cash joined the Free Press in 1987 as the paper’s business columnist.

He has spent two decades chronicling the city’s business affairs.

Martin won a citation of merit from the National Newspaper Awards in 2001 for his coverage of the strike and subsequent multi-million-dollar union settlement at the Versatile tractor plant. He has also received honours and awards for his work on agriculture and technology development in Manitoba.

Martin has written a coffee-table book about the commercial and industrial make-up of the city, called Winnipeg: A Prairie Portrait.

Martin Cash on Twitter: @martycash

martin.cash@freepress.mb.ca

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