http://www.avidbuilder.com/content/110306JDPower
J.D. Power Halts Research in No.1 North American Market
Customer satisfaction ratings firm suspends studies in Toronto and Ottawa.
March 6, 2011
For the past several months, the rumor mill on the streets of Toronto — the largest home building market in North America — has been buzzing about J.D. Power and Associates pulling out. Well, it’s official. The world’s largest customer satisfaction research firm has decided to forgo its Home Builder Satisfaction Study in both Toronto and Ottawa this year. In a letter to the industry, the company stated,
“… our goal in 2011 is to re-evaluate the program to ensure we are able to provide the level of analysis and diagnostics that the industry has come to expect. As a result, fielding of the study in the Greater Toronto Area (GTA) and Ottawa markets will not take place this year. This also includes the Canadian New Condominium Satisfaction study.â€
The company did not provide a timeline for examining this issue and made no mention of when it might reenter the market. You can view a copy of the letter here.
This news comes as little surprise to many close to the situation, as J.D. Power pre-released this announcement to key builders over the past several months. Yet, it’s unclear whether this is a precursor to other markets being shut down or how builders in those Canadian markets will react to not having annual customer ratings being made public. And even if J.D. Power successfully reinvents itself and comes back into those markets, it could have a sizable and expensive challenge winning back consumers and builders.
Hat Tip
It is not unfair to say that J.D. Power experienced a tenuous relationship with the North American home building industry. Why? Because the company has been daring enough to challenge this industry to have better customer service.
Yet, many industry experts — AVID included — applaud J.D. Power for its efforts over the years to improve the home building industry and share in this common goal. Despite the fact that J.D. Power competes with AVID, we value its services and respect the incredible brand it has built since 1969. In many ways, J.D. Power has pushed this industry to improve faster than it might have without having the company’s public rankings. It was controversial, but it worked to get the attention of the industry and push the market for better service.
While J.D. Power has not been perfect in its execution and customer relations, it provided a valuable research study to the market at no charge. This represented the first of its kind to bring transparency to home builders’ level of service. Unfortunately, J.D. Power cannot continue to fund these studies and will most likely begin shutting down this “syndicated†approach to researching markets. However, consumers have already found another, quite different way to fill the information void.
The Future
It’s a brave new world empowered with customer feedback, and if J.D. Power won’t broadcast the voices of the consumer anymore, consumers will create other outlets on the Internet. Actually, this is already happening, with buyers “wired and dangerous†like never before. Renowned author and valued friend Chip Bell is finishing his new book with this very title, and it details how easy it is for the average consumer to sully a company’s reputation to millions of consumers with a single mouse click.
Indeed, it is the Web 2.0 revolution that is captivating the young and old alike, and likewise may be the impetus for J.D. Power to pause and rethink its business strategy.
But make no mistake. If J.D. Power decides to pull out of home building entirely, this development would not signify a return to a lawless “wild west†of customer service. In fact, the opposite is happening. The voice of the customer is currently being broadcast louder than J.D. Power ever could from such sources as Facebook, YouTube, and other social networks. In many ways, the entire world, not just J.D. Power, is reacting to this paradigm shift toward empowerment fueled by the Internet. We have all watched in amazement as this newfound communications network directly empowered the successful overthrow of tyrannical dictators in the Middle East. The home building industry, being significantly more benevolent, is no match against this force. There already exists dozens of websites dedicated to reporting on home builder quality. Only more will come.
If J.D. Power does figure something out and introduces a new offering, it will be very different from what it has traditionally provided. With or without J.D. Power, however, builders need to stay vigilant about customer service and keep customer loyalty improvement as a key initiative in their operations. That’s because the customer’s voice is more powerful than ever.
J.D. Power Halts Research in No.1 North American Market
Customer satisfaction ratings firm suspends studies in Toronto and Ottawa.
March 6, 2011
For the past several months, the rumor mill on the streets of Toronto — the largest home building market in North America — has been buzzing about J.D. Power and Associates pulling out. Well, it’s official. The world’s largest customer satisfaction research firm has decided to forgo its Home Builder Satisfaction Study in both Toronto and Ottawa this year. In a letter to the industry, the company stated,
“… our goal in 2011 is to re-evaluate the program to ensure we are able to provide the level of analysis and diagnostics that the industry has come to expect. As a result, fielding of the study in the Greater Toronto Area (GTA) and Ottawa markets will not take place this year. This also includes the Canadian New Condominium Satisfaction study.â€
The company did not provide a timeline for examining this issue and made no mention of when it might reenter the market. You can view a copy of the letter here.
This news comes as little surprise to many close to the situation, as J.D. Power pre-released this announcement to key builders over the past several months. Yet, it’s unclear whether this is a precursor to other markets being shut down or how builders in those Canadian markets will react to not having annual customer ratings being made public. And even if J.D. Power successfully reinvents itself and comes back into those markets, it could have a sizable and expensive challenge winning back consumers and builders.
Hat Tip
It is not unfair to say that J.D. Power experienced a tenuous relationship with the North American home building industry. Why? Because the company has been daring enough to challenge this industry to have better customer service.
Yet, many industry experts — AVID included — applaud J.D. Power for its efforts over the years to improve the home building industry and share in this common goal. Despite the fact that J.D. Power competes with AVID, we value its services and respect the incredible brand it has built since 1969. In many ways, J.D. Power has pushed this industry to improve faster than it might have without having the company’s public rankings. It was controversial, but it worked to get the attention of the industry and push the market for better service.
While J.D. Power has not been perfect in its execution and customer relations, it provided a valuable research study to the market at no charge. This represented the first of its kind to bring transparency to home builders’ level of service. Unfortunately, J.D. Power cannot continue to fund these studies and will most likely begin shutting down this “syndicated†approach to researching markets. However, consumers have already found another, quite different way to fill the information void.
The Future
It’s a brave new world empowered with customer feedback, and if J.D. Power won’t broadcast the voices of the consumer anymore, consumers will create other outlets on the Internet. Actually, this is already happening, with buyers “wired and dangerous†like never before. Renowned author and valued friend Chip Bell is finishing his new book with this very title, and it details how easy it is for the average consumer to sully a company’s reputation to millions of consumers with a single mouse click.
Indeed, it is the Web 2.0 revolution that is captivating the young and old alike, and likewise may be the impetus for J.D. Power to pause and rethink its business strategy.
But make no mistake. If J.D. Power decides to pull out of home building entirely, this development would not signify a return to a lawless “wild west†of customer service. In fact, the opposite is happening. The voice of the customer is currently being broadcast louder than J.D. Power ever could from such sources as Facebook, YouTube, and other social networks. In many ways, the entire world, not just J.D. Power, is reacting to this paradigm shift toward empowerment fueled by the Internet. We have all watched in amazement as this newfound communications network directly empowered the successful overthrow of tyrannical dictators in the Middle East. The home building industry, being significantly more benevolent, is no match against this force. There already exists dozens of websites dedicated to reporting on home builder quality. Only more will come.
If J.D. Power does figure something out and introduces a new offering, it will be very different from what it has traditionally provided. With or without J.D. Power, however, builders need to stay vigilant about customer service and keep customer loyalty improvement as a key initiative in their operations. That’s because the customer’s voice is more powerful than ever.