Category: United States

Independent Insurance Agents Face Headwinds Brought On by COVID-19 Pandemic, JD Power Finds

2020-11-16

jillian.breska

The perennial dominance of the agent channel in the insurance industry continues to face strong headwinds due to increased competition and evolving consumer expectations that have been highlighted by the COVID-19 pandemic. According to the JD Power 2020 U.S. Independent Agent Performance and Satisfaction Study,^SM released today, misalignment and poor execution continue to place agent-based carriers on their heels in their ongoing battle with direct-to-consumer insurers as the channel of choice among modern property and casualty insurance consumers.

The study, now in its third year, was developed in alliance with the Independent Insurance Agents & Brokers of America (IIABA). It evaluates the evolving role of independent agents in P&C insurance distribution, general business outlook, management strategy and overall satisfaction with personal lines and commercial lines insurers in the United States.

“The effects of COVID-19 have highlighted the importance of personalized insurance as consumers seek help navigating their way through this period,” said Tom Super, head of property & casualty insurance intelligence at JD Power. “Ironically, in many instances it was direct-based carriers, which have made a concerted effort in recent years to emulate the high-touch and high-quality agent experience, that were able to step up and deliver during this crisis. The independent agent channel should use this as a learning experience and redouble efforts toward improved alignment, execution and efficiency to drive more beneficial customer outcomes.”

Following are key findings of the 2020 study:

• Effects of pandemic put spotlight on independent agent challenges: More than one-third (36%) of agents say they were unaware of their carriers’ efforts during the pandemic. Agents, too, have been falling short in leveraging their strategic advantage during the pandemic. Only 42% of independent agent customers say they were contacted to help manage their policy costs during the crisis vs. 52% of direct customers who say the same.
• Progressive wields influence on independent agent growth: While independent agents write 58% of all P&C policies, their market share is falling, particularly in personal lines auto, in which independent agents write just 31% of all policies. Notably, Progressive’s agency channel accounts for 52% of all personal lines’ growth among independent agents, solidifying its growth across both direct and agent channels.
• Digital support could improve agent satisfaction: Digital channels are independent agents’ preferred means of communication with insurers, with email and online dashboards leading the way. Specific digital tools that drive agent satisfaction focus on sales and product training and identification of cross-sell opportunities. Though these digital offerings are associated with high levels of agent satisfaction, they are used by fewer than 60% of agents.
• “Help me help you”: Satisfaction among independent agents is highest among carriers with diversified product offerings, such as enabling agents to offer flexible design and onboarding or enabling them to offer product bundling. Fewer than half (43%) of independent agents indicate receiving this level of support from insurers.
• Cost efficiency not linked to agent satisfaction: The notion that simply paying agents a higher commission translates to higher agent satisfaction and improved business outcomes is not true. Many of the top-performing agent-based insurers have been able to maintain expense discipline while also delivering on agent expectations.
• Independent agents focused on alignment with carriers: Among independent agents, overall satisfaction with carriers that demonstrate better market alignment, as evidenced by providing adequate support for targeted industries, is 126 points higher (on a 1,000-point scale) than with those carriers that do not provide adequate support to targeted industries.
• Traditional agents face competition from virtual agents: More than three-fourths (81%) of consumers say they would be open to working with virtual insurance agents to perform core insurance activities. This indicates that traditional agency distribution is increasingly threatened by technological innovation that is helping to close the gap on expertise by leveraging data and machine learning.

Study Ranking

Auto-Owners Insurance ranks highest among personal lines with an overall satisfaction score of 816. Safeco (761) ranks second and Chubb (755) ranks third.

The 2020 U.S. Independent Agent Performance and Satisfaction Study surveyed P&C insurance independent agents and gathered 1,817 evaluations of personal lines insurers with which agents had placed policies during the prior 12 months. The study was fielded in two waves: September through November 2019 and July through September 2020.

For more information about the U.S. Independent Insurance Agent Performance and Satisfaction Study, visit https://www.jdpower.com/business/resource/us-independent-agent-performance-satisfaction-study.

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

Small Business Customer Satisfaction with Electric Utilities Could Use Digital Charge, JD Power Finds

2020-11-16

jillian.breska

Overall business customer satisfaction with electric utilities has climbed this year, aided by record high reliability scores, but serious gaps in satisfaction exist between small and large businesses. According to the JD Power 2020 Electric Utility Business Customer Satisfaction Study,^SM released today, satisfaction among large businesses has increased eight points (on a 1,000-point scale) during the pandemic but has declined 11 points among small businesses during the same period.

“While overall customer satisfaction remains high this year, it should be cause for concern that smaller businesses that have been more significantly affected by the COVID-19 pandemic are, in many cases, less aware of relief efforts and not receiving the same level of outreach as bigger businesses,” said Adrian Chung, director of utilities intelligence at JD Power. “Peel back the layers of the data and it’s clear that utilities need to fully leverage digital channels in an effective manner to engage with the broad population of small business customers.”

Following are some key findings of the 2020 study:

• Business customer satisfaction climbs: Overall business customer satisfaction with electric utilities is 793, up 14 points from 2019, driven largely by improvements in customer contact and power quality and reliability. Nearly one-third (31%) of business customers say they received perfect power throughout 2020, up from 29% in 2019. Among those businesses that did experience an outage, 61% say they received some form of proactive communication from their utility.
• Digital channels highly effective and most often used for connecting with utilities: Overall satisfaction among business customers that interact digitally with their electric utility via website and mobile app is 26 points higher than among those that communicate primarily by phone. Most digital customers also say their utility is easy to do business with and is a valued business partner.
• A performance gap: Overall satisfaction among large businesses has increased eight points during the COVID-19 pandemic, while satisfaction among small and medium-sized businesses has declined during the same period. Small businesses posted the largest decline (-11 points) from the pre-pandemic period of Feb. 12-March 11 through the end of fielding in October. Small businesses in the study also cite increased financial stress during the pandemic, with 27% saying they are financially worse off now than before the pandemic.
• Awareness of relief efforts: Overall customer satisfaction is significantly higher (73 points) among the 64% of businesses that are aware of COVID-19-related relief efforts, such as late payment forgiveness, waived charges and fees and community support initiatives. However, 36% of business customers say they are unaware of these efforts.

Study Rankings

Within each of the four U.S. geographic regions included in the study, utility providers are classified into one of two segments: large (serving 85,000 or more business customers) and midsize (serving 40,000-84,999 business customers). The following utilities rank highest in business customer satisfaction in their respective region:

• East Large: BGE and Con Edison (tie) (BGE ranks highest for a fourth consecutive year.)
• East Midsize: Pepco
• Midwest Large: Ohio Edison
• Midwest Midsize: Kentucky Utilities (for a second consecutive year)
• South Large: Georgia Power (for a third consecutive year)
• South Midsize: Southwestern Electric Power
• West Large: Idaho Power
• West Midsize: Seattle City Light

The 2020 Electric Utility Business Customer Satisfaction Study, now in its 22^nd year, measures satisfaction among business customers of 88 targeted U.S. electric utilities, each of which serves more than 40,000 business customers. In aggregate, these utilities provide electricity to more than 12 million customers.

Overall satisfaction is examined across six factors (listed in order of importance): power quality and reliability; corporate citizenship; price; billing and payment; communications; and customer contact.

The study is based on responses from 18,457 online interviews of business customers in decision-making roles related to their utility company. The study was fielded from February through October 2020.

For more information about the JD Power Electric Utility Business Customer Satisfaction Study, visit https://www.jdpower.com/business/utilities/electric-utility-business-customer-satisfaction-study.

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

Credit Card Companies’ Support for Small Businesses during COVID-19 Not Enough to Drive Customer Satisfaction, JD Power Finds

2020-11-18

jillian.breska

Significant efforts by credit card issuers to support their small business customers with late payment forgiveness, waived charges and community initiatives during the COVID-19 pandemic have failed to drive strong customer satisfaction, loyalty or brand advocacy. According to the JD Power 2020 U.S. Small Business Credit Card Satisfaction Study,^SM released today, small business customer satisfaction declines sharply from 2019, regardless of whether those business owners were aware of relief efforts put in place by their card issuers.

“Business credit card customers are broadly aware and appreciative of the relief efforts card issuers have put in place during the pandemic, but it hasn’t been enough to outweigh the tough times and strain these businesses are feeling,” said John Cabell, director of wealth and lending intelligence at JD Power. “This is particularly true among the smallest small businesses. Strategies that are resonating for issuers and small business customers during this challenging time are those that focus on increased communication—particularly through digital channels—in which issuers offer advice and guidance, community support and late payment forgiveness.”

Following are some key findings of the 2020 study:

• Overall customer satisfaction declines during pandemic: Overall satisfaction among small business credit card customers is 840 (on a 1,000-point scale), which is nine points lower than a year ago. Small business customers—25% of whom say they’re spending less with their cards—have  lower levels of trust and feel less loyal to their card issuer. More than nine in 10 (91%) of small businesses say their business has been affected by the pandemic and 29% say their business is worse than it was a year ago.
• COVID-19 relief efforts help, but not enough: Across the small business landscape, 71% of small business customers say they are aware of card issuer efforts to help in response to COVID-19-related business challenges, and these efforts do have a positive effect on customer satisfaction, especially late payment forgiveness and waived charges and fees. Overall satisfaction is 58 points higher among business owners who are aware of card issuer relief efforts than among owners who are not aware. However, a key driver in the nine-point decline in overall satisfaction from 2019 is the low satisfaction scores of business owners who are unaware of card issuer relief efforts.
• Need for better communication around card benefits: Overall customer satisfaction among small businesses with credit card benefits declines nine points this year, with the sharpest declines occurring in retail co-brand cards (-35 points). Given changing spending patterns, it is critical that card issuers emphasize special offers and benefits through proactive communication with small business cardholders.
• Digital customer support channels disappoint during pandemic: Fewer small business credit card customers say they are able to find the information they need on their card issuer’s website, with 47% of customers who started to search for information online eventually turning to the phone for assistance. Website satisfaction declines 13 points this year, while mobile satisfaction declines 10 points.
• Advice for cardholders: The results of this study make it clear that small business credit card customers need to address any concerns or potential payment difficulties they may be having as early as possible, recognizing that issuers are dealing with a large number of customer challenges and that it may take some time to resolve their issues. Small business cardholders should also re-evaluate whether their current card rewards and benefits are still aligned with their spending patterns in the new normal.

Study Ranking

Discover ranks highest in customer satisfaction among national issuers for a second consecutive year, with a score of 867. American Express (861) ranks second and Bank of America (849) ranks third.

The JD Power 2020 U.S. Small Business Credit Card Satisfaction Study, now in its second year, measures customer satisfaction with the largest small business credit card issuers in the U.S. by examining six factors (in alphabetical order): benefits and services; channel activities; credit card management; credit card terms; key moments; and rewards. The 2020 U.S. Small Business Credit Card Satisfaction Study includes responses from 2,962 small business credit card customers and was fielded in July-August 2020.

For more information about the U.S. Small Business Credit Card Satisfaction Study, visit https://www.jdpower.com/business/resource/us-small-business-credit-card-study.

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

JD Power Poised to Set New Vision for Automotive Forecasting After Completing ALG Acquisition

2020-11-24

jillian.breska

Completing its purchase today of ALG from TrueCar, Inc., JD Power will dramatically broaden its vision of automotive residual value forecasting, especially important as the industry prepares to launch a wave of new electric vehicle (EV) models and pushes toward increased vehicle automation and other emerging technologies.

JD Power is the global leader in data analytics and consumer intelligence, while ALG is the industry authority on automotive residual value projections in both the United States and Canada. ALG is being integrated into the data & analytics division of JD Power.

“As the automotive industry continues to face several technological, environmental and economic factors, the significance of what ALG brings to JD Power data and analytics capabilities provides additive value to our clients,” said Dave Habiger, president and CEO, JD Power. “The industry is about to experience a product shift unlike anything it’s ever seen before with new EV models and other new technologies quickly gaining adoption over the next several years and beyond. Having ALG’s expertise in forward-looking residual value forecasting will enable us to provide dynamic new product offerings that focus on new vehicle technologies and retail channels.”

Determining an accurate residual value—the value of a vehicle at the end of a lease term—is the foundation of auto leasing, because it allows dealers and manufacturers to set the most competitive lease terms today, while securing their bottom lines tomorrow. Approximately one-third of new vehicles sold each year are leased, typically for a three-year term. At any point in time, the value of vehicles in outstanding lease portfolios is estimated at $500 billion. Looking to the future, the combination of ALG’s expertise in residual values with JD Power’s wide range of data and analytics on market performance values and individual vehicle configurations will become increasingly valuable as the electric vehicle segment continues to grow.

“The large number of new and redesigned EVs entering the market coupled with evolving customer attitudes to transportation and EV ownership mean the auto industry must be prepared because their financial lives depend on it,” said Thomas King, president of data and analytics and chief product officer at JD Power. “Navigating this new landscape requires data, science and deep industry and consumer expertise. Manufacturers can rely upon our experts for reliable, transparent analysis and forecasting so critical contenting, pricing and incentive decisions can be made with confidence.”

Countless variables affect the actual residual value of a vehicle over a multi-year lease term. Examples include new vehicle sales tactics (incentives), used supply, quality/reliability, options and packages, and the macroeconomic environment. Accurate forecasting has become particularly important in the current marketplace, where vehicle valuations have been affected by a combination of macroeconomic volatility and the rapid-fire introduction of new models, including EVs, which have unique depreciation schedules and continue to influence traditional vehicle sales. Since these factors need to be taken into account in order to accurately forecast residual values, the more granularity and greater the understanding of the effect of each variable, the better equipped manufacturers and lenders are able to maximize profitability.

“Pairing ALG’s proven residual value forecasting algorithms and expertise with our existing automotive data, analytics and vehicle valuation capabilities, will enable us to deliver a truly end-to-end solution for understanding vehicle price performance and optimizing pricing decisions in all facets of the vehicle sales process,” said Jonathan Banks, vice president and general manager, vehicle valuations, at JD Power. “There has never been a more critical time to focus on precision valuation forecasting. With the basics of automotive supply-and-demand disrupted by the pandemic and a long recovery still ahead, our new capabilities will be central to navigating the ‘new normal.’”

”JD Power has proven itself over the last half-century as a pioneer and leader in delivering the trusted insights the auto industry can rely on to optimize business decisions,” said Eric Lyman, senior vice president at ALG. “I look forward to working with this amazing team to continue to drive new innovations that help the industry keep growing, particularly in the face of current challenges and for what the future brings.”

The ALG acquisition follows closely on the heels of JD Power’s recent merger with Autodata Solutions to create an industry-leading provider of new and pre-owned automobile transactional data, valuation tools, vehicle feature information and consumer analytics to the automotive industry.

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info

 

Vehicle Retail Sales Decline due to Quirky Sales Calendar; When Adjusted for Selling Days, Retail Sales Stable

2020-11-25

jillian.breska

The Retail Sales Forecast
New-vehicle retail sales for the month of November are expected to decline marginally from November 2019, according to a joint forecast from JD Power and LMC Automotive. Retail sales for new vehicles are projected to reach 1,040,000 units, a 0.7% decrease compared with November 2019 when adjusted for selling days. November 2020 contains three fewer selling days and one less selling weekend when compared with November 2019. Comparing the same sales volume without adjusting for the number of selling days translates to a decrease of 12.2% year over year.

The Total Sales Forecast
Total new-vehicle sales for the month of November, including retail and non-retail transactions, are projected to reach 1,208,100 units, a 3.5% decrease from November 2019 when adjusted for selling days. Reporting the same numbers without controlling for the number of selling days translates to a decrease of 14.6% from November 2019. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 15.8 million units, down 1.3 million units from 2019.

The Takeaways

Thomas King, president of the data and analytics division at JD Power:
“November 2020 is a prime example of why accounting for selling day differences is important in measuring comparable sales performance. After two consecutive months of year-over-year retail sales gains, a quirk in the November sales calendar will result in new-vehicle retail sales appearing to fall 12%. This year, November has three fewer selling days and one less selling weekend compared with 2019. When these calendar quirks are accounted for, new-vehicle retail sales are expected to almost match 2019 levels. While the sales results illustrate the continued strength of consumer demand, that strength is further reinforced by transaction prices hitting another record high, even as manufacturers and retailers continue to remain disciplined on new-vehicle incentives and discounts.”

The average number of days a new vehicle sits on a dealer lot before being sold is on pace to fall to 48 days, remaining below post-recession lows of 50 days for the second consecutive month.

—–

The average incentive from manufacturers on new vehicles is on pace to be $3,866 per vehicle, a decrease of $657 from a year ago and the third consecutive month below $4,000. Expressed as a percentage of the average vehicle MSRP, incentives for November are 9.0%, down two percentage points from a year ago, and the fourth consecutive month below 10%. For context, incentive spending per unit is 22% lower than when it peaked at $4,953 per unit in April 2020. Retailers also continue to offer smaller discounts on new-vehicle sales. Total grosses per unit, inclusive of finance and insurance income, are on pace to reach $2,144, an increase of $776 from a year ago. This marks the fifth consecutive month above $2,000.

—–

Average transaction prices are expected to reach another all-time high, rising 8.3% to $37,099. Disciplined incentives and discounting, along with the shift towards more expensive trucks and SUVs, remains the key drivers. SUVs and trucks are on pace to account for a combined 78% of retail sales compared with 74% a year ago. For context, average transaction prices are 18% higher in November 2020 than they were in November 2015 at $31,397.

Low interest rates and higher trade-in values are supporting higher transaction prices. The average interest rate for loans in October is expected to fall 91 basis points from a year ago to 4.4%. Over the same time, the average monthly finance payment is up only $19 to $602. Concurrently, the average trade-in value has risen to $5,175, an increase of $772, or 17.5%, from a year ago. Loan terms are relatively stable with the average term up only one month, to 70 months, compared with a year ago.

—–

Looking ahead to December, a healthy sales pace is expected to continue thanks to manufacturers’ progress in relieving inventory constraints, continued strong consumer demand and the year-end sales season.

Sales & SAAR Comparison

U.S. New Vehicle	November 20201	October 2020	November 2019
Retail Sales	1,040,000 units (-0.7% lower than November 2019)2	1,177,770 units	1,184,187 units
Total Sales	1,208,100 units (-3.5% lower than November 2019)2	1,350,746 units	1,414,963 units
Retail SAAR	13.1 million units	14.2 million units	13.8 million units
Total SAAR	15.8 million units	16.3 million units	17.1 million units

¹ Figures cited for November 2020 are forecasted based on the first 17 selling days of the month.
² November 2020 has 23 selling days, three fewer days than November 2019.

The Details

• The average new-vehicle retail transaction price in November is expected to reach a record $37,099. The previous high for any month of $36,755 was set in October 2020.
• Average incentive spending per unit in November is expected to reach $3,866, down from the previous monthly record of $4,523, set in November 2019. Spending as a percentage of the average MSRP is expected to reach 9.0%, down two percentage points from a year ago.
• Average incentive spending per unit on trucks and SUVs combined is expected to be down $742 to $3,880, while the average spending on cars is expected to be flat at $4,230.
• Consumers are on pace to spend $38.6 billion on new vehicles, down $2 billion from November 2019.
• Truck/SUVs are on pace to account for 78.1% of new-vehicle retail sales.
• Fleet sales are expected to total 168,100 units, down 18% from November 2019 on a selling day adjusted basis. Fleet volume is expected to account for 14% of total light-vehicle sales, down from 16% a year ago.
   

Global Outlook for November 2020

Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive:
“Despite the effect and increased risk of disruption from rising COVID-19 case counts and new restrictions, the global selling rate came in about 90 million units for the third straight month. After upward adjustments in China, the SAAR was at 91 million units in October, up from the 89 million-unit rate a year ago. The strong selling rate is supported by a 2% increase in volume from October 2019. The gain in volume is driven by continued strength in China and India, up 10% and 13%, respectively. Light-vehicle sales in Japan were stronger than expected, up 29% from a low base in 2019 caused by a consumption tax increase. Western Europe was a notable drag on October sales, falling by 6% from October 2019.

“With the solid growth in October, global light-vehicle sales continue to improve on a year-to-date basis. Sales through October are down 17% from a year ago, an improvement from the 19% decline reported last month. The 2020 global outlook remains at a drop of 15% to 77 million units, but the forecast did move upward slightly. Looking ahead to 2021, the global industry will be grappling with the optimism surrounding a COVID-19 vaccine and the reality of a likely negative near-term effect to the economy and auto sector from increasing infection numbers. The 2021 forecast for global light-vehicles is holding at 86 million units, an increase of 11% from 2020.”

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Emmie Littlejohn, LMC Automotive; Troy, Mich.; 248-817-2100; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info
About LMC Automotive www.lmc-auto.com

 

Increase in Digital Automotive Retail Due to Pandemic Paves Way for New Normal, JD Power Finds

2020-12-08

jillian.breska

Decreased showroom traffic caused by COVID-19 shutdowns fast-tracked dealer adoption of remote selling capabilities, according to the JD Power 2020 U.S. Sales Satisfaction Index (SSI) Study,^SM released today.

“The pandemic provided dealers with a wide-open path to allow different approaches to sell vehicles outside of their traditional showroom sales process,” said Chris Sutton, vice president of automotive retail at JD Power. “It’s revealing, too, that 44% of online shoppers are now selecting the exact vehicle they want from inventory on a dealer’s website, which is an increase of 13 percentage points from January of this year.

“The more shoppers are exposed to remote communication and actual online buying options, the more they may prefer these methods in the future over traditional showroom visits to wade through inventory and negotiate. In fact, nearly one in four buyers say their purchase experience during the pandemic will make them less likely to shop in person in the future, indicating that digital retail processes are here to stay. These lasting effects make it imperative for dealers to step up their digital offerings to remain competitive.”

The study, now in its 35^th year, has been redesigned for 2020 and places a much greater emphasis on digital retail and remote buying. Digital retail activities measured in the study include the ability to select vehicle from inventory; receive credit approval; review F&I products; agree on purchase price; and complete purchase paperwork. All saw a spike during the onset of the pandemic and, while many declined in the May-June timeframe, all are still up nearly 50% from January.

The study also finds that, as dealers implemented and refined digital procedures at the onset of the pandemic (March-April), buyer satisfaction among digital customers increased. Most notably, satisfaction among buyers who finalized a price online was nearly identical to those who didn’t finalize a price online before the pandemic began. By the May-June timeframe, satisfaction among buyers who agreed to a price online was 42 points higher (on a 1,000-point scale) than among those who hadn’t. This demonstrates how quickly dealers were able to implement and refine processes that resonated with buyers.

Following are some key findings of the 2020 study:

• Key pandemic-related buying activities improve satisfaction: Even though most buyers say COVID-19 affected their buying process in ways they didn’t expect, many were more satisfied as a result. In fact, satisfaction among buyers who say their process wasn’t affected at all is seven points lower than among those who were affected. Buyers who completed most of their paperwork online are the most satisfied, with satisfaction averaging 873, which is 35 points higher than among those who didn’t complete paperwork online. Similarly, satisfaction scores among those who had more virtual communication are 17 points higher than among those who didn’t. These activities illustrate why such trends are likely to continue.
• Online F&I review can enhance take rates: Reviewing F&I products online increased after the COVID-19 outbreak, but it’s still uncommon—only 7% of buyers say they reviewed products online during the March-June timeframe. However, the take rate among buyers who reviewed products online is higher compared with those who reviewed products in the showroom, especially for extended warranty (36% vs. 28%); prepaid maintenance (23% vs. 16%); and tire protection (18% vs. 12%).
• Brand and dealer advocacy aren’t aligned: On average, vehicle brands have a higher Net Promoter Score^® (NPS)[1] than their dealer base, with nearly a 20-point gap (on a 100-point scale) between the scores. However, there’s also a wide range of gaps between the two groups that vary by brand, the largest of which is 34 and the smallest of which is -2. Key performance indicators (KPIs) that have the highest effect on buyer satisfaction index scores include sales consultant completely understood needs (+94); vehicle delivered in perfect condition (+55); and finance staff not too pushy selling additional products (+52). These KPIs are met nearly 90% of the time. NPS measures customer advocacy for the model they own and can be a strong predictor of future business growth.
• Tesla profiled for first time: Tesla receives an SSI score of 804. The automaker is not officially ranked among other brands in the study because it doesn’t meet ranking criteria. Unlike other manufacturers, Tesla doesn’t grant JD Power permission to survey its owners in 15 states where it is required. However, Tesla’s score was calculated based on a sample of surveys from owners in the other 35 states.

 

Study Rankings

Lincoln ranks highest in sales satisfaction among luxury brands, with a score of 827. Lexus (826) and Mercedes-Benz (826) rank second in a tie.

MINI ranks highest in sales satisfaction among mass market brands with a score of 824. GMC (804) ranks second and Buick (803) ranks third.

The U.S. Sales Satisfaction Index (SSI) Study measures satisfaction with the sales experience among new-vehicle buyers and rejecters (those who shop a dealership and purchase elsewhere). Buyer satisfaction is based on six factors (in order of importance): delivery process (28%); dealer personnel (21%); working out the deal (19%); paperwork completion (19%); dealership facility (10%); and dealership website (4%). Rejecter satisfaction is based on five factors: salesperson (28%); price (27%); negotiation (18%); dealership facility (14%); and variety of inventory (13%).

The study is based on responses from 35,816 buyers who purchased or leased their new vehicle from January through June 2020. The study is a comprehensive analysis of the new-vehicle purchase experience and measures customer satisfaction with the selling dealer (satisfaction among buyers). The study also measures satisfaction with brands and dealerships that were shopped but ultimately rejected in favor of the selling dealership (satisfaction among rejecters). The study was fielded from July through October 2020.

To learn more about the 2020 U.S. Sales Satisfaction Index (SSI) Study, visit http://www.jdpower.com/resource/us-sales-satisfaction-index-ssi-study.

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info

¹Net Promoter,® Net Promoter System,® Net Promoter Score,® NPS,® and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

 

Capital One Ranks Highest in Customer Satisfaction in JD Power National Banking Study

2020-12-10

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Superior digital banking offerings, clear products that match customer needs and helping customers save time and money are becoming key differentiators for the country’s largest retail banks. According to the JD Power 2020 U.S. National Banking Satisfaction Study,^SM released today, Capital One ranks highest in overall customer satisfaction by delivering compelling products, clear fee structures and a consistently strong digital customer experience.

“Banks that have been most effective in managing the transition to a digital-first model have earned high marks for customer satisfaction in a year when mobile apps and websites have become a vital lifeline for banking customers,” said Paul McAdam, senior director of banking services at JD Power. “It is noteworthy that Capital One—a bank that has been aggressively reducing its physical footprint and currently has 46% fewer branch offices than it did five years ago—has earned the highest ranking in this study. JD Power data also indicate that strong digital offerings have the added benefit of helping customers improve or maintain their financial health, a key feature in a time when so many are experiencing economic distress.”

Study Ranking

Capital One ranks highest with an overall satisfaction score of 688 (on a 1,000-point scale). Chase (684) ranks second and PNC (680) ranks third. These three banks outpace the national average customer satisfaction score of 657.

The study, now in its fourth year, provides a comprehensive view of customer experience with all retail bank product lines for eight national banks in the United States, which account for 45% of total domestic deposits. It evaluates bank customer experience across seven factors: trust; people; account offerings; allowing customers to bank how and when they want; saving time and money; digital channels; and resolving problems or complaints.

The study defines a national bank as a U.S. bank holding company with domestic deposits exceeding $200 billion. The study is based on responses from 8,877 retail banking customers and was fielded in August-September 2020.

For more information about the JD Power U.S. National Banking Satisfaction Study, visit https://www.jdpower.com/business/financial-services/national-bank-satisfaction-study.

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

Electric Utilities’ Good Deeds—and Communication about Them—Pay Off During Pandemic, JD Power Finds

2020-12-11

jillian.breska

Overall, electric utility residential customer satisfaction for the industry is high, especially for customers that are aware of payment deferment and other good deeds offered by their utility during the pandemic, according to the JD Power 2020 Electric Utility Residential Customer Satisfaction Study,^SM released today. Open and frequent communication about policies and assistance programs has proven to be key in maintaining high customer satisfaction, especially during the pandemic. Satisfaction among customers who are aware of assistance programs during the pandemic is 795 (on a 1,000-point scale) vs. 719 among those customers who were not aware.

“These satisfaction scores are evidence that kindness and being a good corporate citizen during challenging times is worth all the effort and communication that goes with it,” said John Hazen, managing director of utilities intelligence at JD Power. “The challenge will come in 2021 as electric utility providers go back to business as usual and continue collections and shut-offs. The way to maintain higher satisfaction will be to continue to communicate when these changes will occur and provide excellent service.”

Study Results

• East Large Segment: PPL Electric Utilities (for a ninth consecutive year)
• East Midsize Segment: Rochester Gas & Electric
• Midwest Large Segment: MidAmerican Energy (for a 13^th consecutive year)
• Midwest Midsize Segment: Kentucky Utilities (for a fifth consecutive year)
• South Large Segment: Florida Power & Light
• South Midsize Segment: EPB (for a fifth consecutive year)
• West Large Segment: SRP (for a 19^th consecutive year)
• West Midsize Segment: Clark Public Utilities (for a 13^th consecutive year)
• Cooperatives Segment: Sawnee EMC

The 2020 Electric Utility Residential Customer Satisfaction Study is based on responses from 96,546 online interviews conducted from January through November 2020 among residential customers of the 143 largest electric utility brands across the United States, which represent more than 102 million households.

For more information about the Electric Utility Residential Customer Satisfaction Study, visit https://www.jdpower.com/business/resource/electric-utility-residential-customer-satisfaction-study.

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info

 

JD Power Acquires Inventory Command Center

2020-12-11

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JD Power, a global leader in data analytics and consumer intelligence, today announced the acquisition of Inventory Command Center (ICC), a leading automotive Inventory management SaaS-based platform. The business, which is being integrated into the Autodata Solutions division of JD Power, is positioned to aggregate the anticipated growth of VIN-specific details brought on by more electric vehicles and automated technologies.

“With more automobile buyers than ever searching local inventories online before they ever set foot in a dealership, accurately and consistently displaying vehicle inventory has taken center stage,” said Dave Habiger, president and CEO of JD Power. “Accurate information on vehicle supply has become a critical component of the increasingly complex auto sales ecosystem thanks to the growth of new technologies and powertrains, such as electric vehicles and automated technologies. By combining ICC’s proven inventory management technology with our robust vehicle feature information and valuation tools, we are giving multiple industry stakeholders, including dealerships, manufacturers, third-party websites and consumers the most comprehensive information available on nationwide vehicle supply.”

Evolving digital retailing strategies require dealers to optimally merchandise and differentiate their digital inventory from the competition by utilizing solutions that showcase their inventory to online shoppers within a customer centric experience and then syndicate that experience to all third-party sources from one unified command center platform. The command center platform aggregates, normalizes, transforms and syndicates vehicle data—creating a “source of truth” of vehicle information for dealers, automotive manufacturers, car shopping sites, dealership websites and anyone else who needs to present accurately described and priced inventory. For example, the command center platform specifically merchandises the new automation technologies and powertrains such as battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and hybrid electric vehicles (HEVs).  

“Like the current market of cars and trucks available today, inventory data comes in all shapes, sizes and engine types,” said Craig Jennings, president of the Autodata Solutions division at JD Power. “ICC’s team has developed a unique platform that filters innumerable and often inconsistent data sets into a single, robust feed that is easy to consume. The result, combined with JD Power VIN description and merchandising solutions, is a service that supports dealers and manufacturers with syndicating appropriately branded, described and priced inventory. This will be even more critical with the influx of new EV models, features and technologies.”

“JD Power is at the pinnacle of delivering data and insights to the automotive industry,” said Kenny DellaPorta, JD Power head of inventory data services and former CEO of ICC. “As a result, car shoppers can more easily find the right vehicle that meets their needs. It’s an honor to join such a strong team and be able to collaborate on solutions that will help drive the industry forward by delivering on the value proposition of complete and precise inventory.”

Vehicle inventory merchandising is a critical aspect of online marketing with more than 56 million new and used vehicles being sold each year. Providing accurate branded descriptions, options and pricing are key to a full and complete online view of a vehicle specifically as it related to digital retailing. The Command Center’s Inventory as a Service platform is already integrated with thousands of dealer inventory feeds and powers numerous third-party car shopping websites. While it aggregates VIN-level data, Inventory as a Service will leverage the ChromeData suite of products, which will properly brand, describe, price and visually merchandise each vehicle. The service is also able to deliver with each exported inventory record incentives and rebates, Chrome Image Gallery photos as well as VIN and model-specific videos.

Portico Capital Securities served as exclusive financial advisor to ICC with respect to this transaction.

The ICC acquisition follows JD Power’s recent acquisition of ALG and the merger with Autodata Solutions to create an industry-leading provider of new and pre-owned automobile transactional data, valuation tools, vehicle feature information and consumer analytics to the automotive industry.

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
Shane Smith; East Coast; 424-903-3665; [email protected]

About JD Power and Advertising/Promotional Rules www.jdpower.com/business/about-us/press-release-info

 

Commercial Insurance Providers Fall Short for Small Businesses Hit Hard by Pandemic, JD Power Finds

2020-12-11

jillian.breska

Small business owners struggling through the COVID-19 pandemic are largely unaware of efforts made by their commercial insurance providers to help them, and that has contributed to a decline in overall customer satisfaction for the first time in the eight-year history of the JD Power 2020 U.S. Small Commercial Insurance Study.^SM According to the study, which was released today, more than half (59%) of small commercial insurance customers say they are not aware of insurer efforts to assist through initiatives such as modified terms and waived fees or other more creative solutions. In instances where insurers have reached out proactively to their customers, however, satisfaction scores have climbed significantly.

“The huge financial strain small businesses have been facing throughout the past year is having a negative effect on small business insurance customer satisfaction, particularly when it comes to price,” said Robert M. Lajdziak, senior consultant of insurance intelligence at JD Power. “While that creates a tough challenge for insurers, there are things they can do to help. Notably, proactive communication—when an insurer reaches out to a business owner and offers guidance and help—has proven to lift satisfaction scores, even when customers are under significant financial duress.”

Study Rankings

Chubb ranks highest in overall customer satisfaction with a score of 853 (on a 1,000-point scale). State Farm (852) ranks second while Erie Insurance and Liberty Mutual (850) rank third in a tie.

The 2020 U.S. Small Commercial Insurance Study is based on responses from 1,854 small commercial insurance customers. The study, now in its eighth year, examines overall customer satisfaction among small commercial insurance customers with 50 or fewer employees. Overall satisfaction is comprised of five factors (in order of importance): interaction; policy offerings; price; billing and payment; and claims. The study was fielded in July-October 2020.

For more information about the JD Power U.S. Small Commercial Insurance Study, visit https://www.jdpower.com/business/insurance/us-small-commercial-insurance-satisfaction-study

JD Power is a global leader in consumer insights, advisory services and data and analytics. A pioneer in the use of big data, artificial intelligence (AI) and algorithmic modeling capabilities to understand consumer behavior, JD Power has been delivering incisive industry intelligence on customer interactions with brands and products for more than 50 years. The world’s leading businesses across major industries rely on JD Power to guide their customer-facing strategies.

JD Power is headquartered in Troy, Mich., and has offices in North America, Europe and Asia Pacific. To learn more about the company’s business offerings, visit JDPower.com/business. The JD Power auto shopping tool can be found at JDPower.com.

Media Relations Contacts
Geno Effler, JD Power; West Coast; 714-621-6224; [email protected]
John Roderick; East Coast; 631-584-2200; [email protected]

About JD Power and Advertising/Promotional Rules: www.jdpower.com/business/about-us/press-release-info