JD Power looks to leverage the power of digital data

Among the many research agencies in the global and Indian automobile industry, JD Power is a known market research and consultancy firm in the automotive community as well as to motorists, who have purchased a new vehicle, or get theirs regularly serviced at authorised service centres.

Founded by James David Power, the US-based JD Power and Associates has been catering to the automotive sector for a good 50 years in 17 countries, since its inception in 1968. The brand, has, over the years, done a tonne of research on various aspects gauging the performance of competing automotive brands in a market, in terms of their customer-centricity, as well as taking into account the various other aspects of the automobile business. It publishes its annual reports under the Customer Service Index (CSI) and the Sales Satisfaction Index (SSI) titles, among a host of other banners.  

While CSI takes note of customer reactions, who are between 1-2 years old in terms of their new vehicle ownership and have got the vehicle serviced at least once in the last six months to qualify as being suitable respondents for the survey, the Initial Quality Survey (IQS) reveals the level of contentment of owners, whose new vehicle is only 2-6 months old and takes account of a large number of qualitative parameters, detailing the vehicle’s performance in comparison to the customer’s expectations.

A JD Power survey combines on-the-ground data collection or the ‘Active Voice of Customer’ in JD Power-speak from around 5,000 to 9,000 respondents, chosen from across vehicle segments and spanning across active vehicle manufacturers. The total process, right from data aggregation to its synthesis and analysis takes around four months, before the results are announced, starting with the SSI in August, CSI in October and the IQS in November every year. The scores are defined on a 1,000 point scale, indicating at the company’s holistic performance across multiple parameters.

In India, in the 2017 CSI study, denoting the aftersales experience and workmanship, Hyundai Motor India topped the charts with a definitive score of 923 points, while Maruti Suzuki India, which had topped the 2016 CSI, slipped to second spot to tie with Tata Motors with a score of 893 points. The parameters judged include service initiation, service advisor competence, service facility, and vehicle pick-up and service quality. Mahindra & Mahindra stood slightly below the mass-market average (877), with a score of 871 points. Honda Cars (831), Ford (807) and Toyota (806) completed the tabulation, which also revealed that 87 percent of the 7,878 total respondents experienced that the work was carried out right in the first go itself. Also, around 24 percent of the customers preferred staying back at the service centre while the vehicle was being worked upon and close to 60 percent were offered six or more amenities by the dealer staff, a significant 25 pointer jump over the 2016 results.

Leveraging the digital potential
While the company is known for its Active VoC methodology, the increasing penetration of technology has enabled it to enhance its data collection with use of telematics, connected vehicle technologies, and also by using facial recognition at dealerships to gauge customer engagement, in order to aggregate plenty more data, which it now terms as the ‘Passive Voice of Customer’. According to Shantanu Nandi Majumdar, regional director, Automotive Practice, JD Power, “The consumer is evolving and so are we. With implementation of AI and machine learning technologies like facial recognition, we intend to leverage fast-accelerating data technology to gather more passive inputs, and bring out even better analysis with our research.”

“We are very transparent in our processes, and even with technology coming in, there would be the need of a lot of licensing to access the data being beamed out from various sensors in a car or even from interactive systems at dealerships,” he added.

Passive data collection will also be vital for OEMs to strengthen customer knowledge, and utilise it to offer personalised offerings and enhance their outreach to their customers. In the two-wheeler segment, the technology driven data aggregation can also help manufacturers delve further into a customer’s decision making process to anticipate growth trends in the market.

According to the JD Power 2017 Two-Wheeler Initial Quality Survey (2WIQS), a low frequency rate of initial problems related to the engine, brakes, transmission, fit-and-finish, gauges or lights, experienced by a new two-wheeler customer is set to see positive word of mouth for the particular brand among friends and family of the individual. Over 52 percent of the total respondents were found to be more than two times as likely to recommend a product if the initial product experience was above expectations.

The study also gave a hint to the notable rise in scooter sales in the recent past, which sold 56,04,601 units in FY2017 and grew 11.39 percent as the 2017 2WIQS reported 129 problems per 100 vehicles for scooters, as opposed to 150 for motorcycles, which only grew by 3.68 percent in comparison. India’s largest selling commuter scooter, the Honda Activa came out with a respectable score of 70, with TVS’ Star City Plus and Hero’s Super Splendor nearing in at 110 and 115 in the executive motorcycle segment respectively.

The findings also denote the importance of a product briefing to the customer at the time of taking the vehicle’s delivery. Around 72 percent of the respondents were given a product demo and they encountered fewer initial niggles than those who did not get such an overview. Moreover, while mileage and comfort are the key purchase criterions in the executive scooter and executive motorcycle segments, the market gradually tilts towards aesthetic and stylish looks in the upper executive and the premium motorcycle segments.

Darren Slind: "Our role is soon going to shift to being a data analytics company, wherein we analyse the data and give it back to the OEs and dealers to aid product as well as sales planning.” 

According to Darren Slind, vice-president, South Asia, ASEAN and Oceania, JD Power, “Our mission for all these 50 years has been to be the voice of the customer and as the industry changes with technological developments, we also need to transform our business.”

“Our role is soon going to shift to being a data analytics company, where there are going to be a myriad data types and sources, including observational data, which we are calling as the Passive Voice of Customer. We would analyse the data and give it back to the OEs and the dealers, in order to aid product as well as sales planning.”

“Moreover, with telematics, we will also capture the voice of the vehicle and merge it with the voice of the customer, in order to get a richer context to analyse a situation,” he added.

Dealerships to adapt to the future
The auto industry has been dramatically impacted by the digital tools available to customers within arm’s reach today. The past five years alone have seen a 100 percent jump in the number of online-aided vehicle purchases in India. Web-driven product enquiries that stood at 25 percent in 2012 grew to 49 percent in 2017. Manufacturer websites and social media channels have brought in a dollop of information, easily accessible to customers, to the extent that almost 44 percent of passenger vehicle buyers in 2017 even knew what variant and colour of the car to be purchased, even before landing up at a brand’s dealership. “I would say that out of the 3 million PVs sold in India last year, around 1.2 million of those were merely ‘delivered’ at the dealerships rather than being sold, which had happened online itself,” said Slind.

Even as the penetration of digital tools increases, the role of a dealer cannot be completely eliminated. “People still trust human relationships more and the dealership model is going to stay relevant in the times to come. The opportunity would lie in the dealer facilitating a fair transaction through the purchase, as well as engaging the customer and giving a long-lasting experience,” he added.

Upcoming disruptions in the mobility space, including the significant shift in propulsion technologies from liquid fuel-based internal combustion engines to hybrids and full electrics, along with increasing penetration of connected vehicle systems, autonomous driving and the booming concept of shared mobility, are all set to drive a digital revolution, bringing its impact to the entire automotive ecosystem, from retail to after-sales as well.

According to JD Power’s own research, a majority of the millennials, who fall in the 17 to 40 age group, have already started showing interest in alternate mobility solutions, with 56 percent of the respondents being comfortable with ride sharing services, as well as with shared vehicle ownership.

Dealers would then need to embrace the change and evolve into being more tech-savvy and capitalising on digital sales services. Aftersales is another important field for them to invest and innovate to develop expertise in handling software and electric technology, and proactively work towards getting prepared for the future. “Aftersales and servicing is going to become the most crucial aspect of a dealer’s business going forward, if not already. While it is a general conception that customers sway away to local garages for vehicle servicing once it comes out of warranty; transparency, quality and convenience definitely make for retaining a customer even after the warranty period.”

“Canada, for instance, has seen OEMs draw customers back to authorised workshops purely because the convenience is unmatched and is topped by top-notch service quality. It directly translates into better profits for the dealers as well as the OEMs,” said Slind.

While there is a humongous opportunity ahead of the company, it believes that the data collection needs to be done in a cost-effective manner. “Our investments in the space of digital data acquisition tools had started in 2017 and a major part of it is also going to continue in 2018 as well. We have brought on-board a chief digital officer, and are hiring data scientists to offer a relevant insight into the big data, by referencing it with key parameters which are beneficial for the industry,” concluded Slind.

Main image: courtesy Daimler