• 'Big Data' Could Give J.D. Power A Big Boost

    These days there is a great deal of talk about “big data.” According to J.D. Power Chief Digital Officer Bernardo Rodriguez, his firm is already converting “big data” into valuable analysis that can help automakers, car dealers and consumers. Depending upon how that analysis is used, it could change the competitive balance among automakers, enable savvy dealers to leap ahead of their peers and shake up the hidebound third-party auto advisor websites.


    “There is no value to large amounts of data if you can’t use it,” Rodriguez told forbes.com. “We are not only able to harvest more data than ever before; we are able to digest that data to draw useful conclusions.”


    Those useful conclusions concern both vehicles themselves — their operation and consumers’ perceptions of them — and the sales and service experience. Through partnerships that date back to the early 1990s, J.D. Power gathers an immense amount of data surrounding new and used vehicle transactions and vehicle service. Further, its data bank of statistically reliable consumer-provided information about individual make-models is unmatched worldwide, giving the firm the ability to provide consumers, car dealers, suppliers and vehicle manufacturers useful yardsticks.

    According to Rodriguez, his company has barely scratched the surface of the valuable insights it can deliver based on the data it collects and crunches. He pointed to electronic driver’s aids as just one example of the scores of systems built into today’s vehicles about which his firm has compelling data.


    “Let’s look at lane departure systems for a minute,” he said. “Some systems are very assertive, while others add guidance more gently. From in-car sensors, we can see how often the systems are being engaged, how they are being used and what drivers’ reactions are. Some systems irritate drivers so much that they turn them off. Being able to deliver that information in the context of how systems are operating across brands is a major advantage.”


    Using its consumer-provided information J.D. Power was quick to identify in-car entertainment and information systems (so-called infotainment units) as significant “dis-satisfiers.” The absence of a volume knob on several Honda models a few years ago sent the brand’s Initial Quality Study scores tumbling, and that is just one of many instances in which a system that is working as designed still causes consumer consternation.


    Certainly, carmakers don’t want to equip their vehicles with expensive safety, entertainment or comfort-and-convenient features that antagonize or irritate buyers, but they run the risk of doing so, despite their internal testing and audits. The “Voice of the Customer” delivered through J.D. Power analysis can keep manufacturers out of the ditch.


    At the same time, it can help consumers get a better understanding of what makes and models are most worthy of their attention…and their purchase dollars. Many third-party websites offer expert reviews of vehicles but very few incorporate the collective consumer experience into their reports. That is an area in which, Rodriguez said, the J.D. Power consumer automotive website can offer a “differentiated experience.”


    “Most big third-party sites — Kelley Blue Book, Autotrader, Edmunds — are bound by their success,” Rodriguez said. JDPower.com and NADAGuides.com, which is owned and managed by J.D. Power, don’t have the traffic that the heavy hitters in the space have. Rodriguez looks at that as a potential competitive advantage going forward.


    “We are not bound by legacies,” he said. “We can innovate without worrying about disrupting our current business.”

    Innovate is just what Rodriguez intends to do. He recently brought in Tanya Parkes, a senior director of product management at KBB.com, to oversee and organize J.D. Power’s efforts in the digital automotive realm. At KBB.com, Parkes was instrumental in developing lucrative special projects that helped cement the brand’s relationship with some key advertisers.


    Interestingly, advertising might take a back seat as J.D. Power attempts to build a compelling consumer experience that doesn’t mimic the current big players.


    “I think we can move forward without advertising to provide a great consumer experience,” Rodriguez said. “Once we get there we can begin to introduce advertising.”


    Even then, advertising might not come in the traditional on-line style of rectangles placed here and there on individual pages. Instead, Rodriguez said he’s interested in native advertising and affiliate marketing as ways to monetize the efforts.


    Certainly competing against the big names in the third-party auto advisory space is daunting, but when it comes to recognition J.D. Power is already a big name. In fact, thanks in part to television ads that use J.D. Power awards to tout products, the J.D. Power brand is very well-recognized by American consumers. With the intimidating volume of consumer-, transaction- and vehicle-sourced data it can bring to bear, there is a reason to believe that J.D. Power can be the disruptive force that Rodriguez says it will be. And that could be a very good thing for carmakers, car dealers and car buyers alike.


    This article first appeared on Forbes and was written by Jack R. Nerad and can be found here.

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