Category: United States

Memorable (or Forgettable) Year to End Positively as December Sales Up and Average Transaction Prices Surpass $38,000 for First Time

2020-12-22

jillian.breska

The Retail Sales Forecast

New-vehicle retail sales for the month of December are expected to be up from December 2019, according to a joint forecast from JD Power and LMC Automotive. Retail sales for new vehicles are projected to reach 1,400,300 units, a 1.0% increase compared with a year ago when adjusted for selling days. December 2020 contains three more selling days and one more selling weekend than December 2019. Comparing the same sales volume without adjusting for the number of selling days translates to an increase of 13.1% year over year.

New-vehicle retail sales for the 2020 calendar year are projected to reach 12,386,000 a 9.5% decrease from 2019.

The Total Sales Forecast

Total new-vehicle sales for the month of December—including retail and non-retail transactions—are projected to reach 1,619,000 units, a 5.1% decrease from December 2019 when adjusted for selling days. Reporting the same numbers without controlling for the number of selling days translates to an increase of 6.3% from December 2019. The seasonally adjusted annualized rate (SAAR) for total new-vehicle sales is expected to be 16.4 million units, down 500,000 units from 2019.

New-vehicle total sales for 2020 are projected to reach 14,468,200, a 14.8% decrease from 2019.

The Takeaways

Thomas King, president of the data and analytics division at JD Power:
“December’s performance closes the year on multiple positive notes. Retail sales are up, transaction prices are at record levels and retailer profits are at all-time highs. This reinforces that manufacturers and retailers are succeeding in getting vehicles built, shipped and sold in alignment with resilient consumer demand.”

The average number of days a new vehicle sits on a dealer lot before being sold is on pace to fall to 49 days, remaining below the 50-day threshold for the third consecutive month.

—–

“Strong retail sales, combined with record transaction prices and low manufacturer discounts, is good news for manufacturer profitability,” King said. The average incentive from manufacturers in December on new vehicles is on pace to be $4,014 per vehicle, a decrease of $585 from a year ago. Expressed as a percentage of the average vehicle MSRP, incentives will be at 9.2%, down two percentage points from a year ago, and the fifth consecutive month below 10%. For context, incentive spending per unit is 19% lower than when it peaked at $4,953 per unit in April 2020.

A similar story exists for dealers who continue to offer smaller discounts on new-vehicle sales. Total grosses per vehicle sale, inclusive of finance and insurance income, are on pace to reach $2,053, an increase of $813 from a year ago. This marks the sixth consecutive month above $2,000.

—–

Average transaction prices are expected reach another all-time high, rising to $38,077, a 9% increase from a year ago. This is the first time that average prices have exceeded $38,000—just one month after prices exceeded $37,000 for the first time in November 2020. For context, average transaction prices are 20% higher in December 2020 than they were in December 2015 at $31,849. The typical increase in luxury vehicles sales in December remains a key driver, along with disciplined incentives and discounting, and the shift towards more expensive trucks and SUVs. Trucks and SUVs are on pace to account for 79% of retail sales compared with 75% a year ago.

Low interest rates and higher trade-in values continue to support higher transaction prices. The average interest rate for loans in December is expected to fall to 4.2%, 97 basis points lower than a year ago. Over the same time, the average monthly finance payment is up only $20 to $610. Concurrently, the average trade-in value has risen to $5,626, an increase of $709 (or 14.4%) from a year ago. Loan terms are relatively stable with the average term being 69 months, only up one month vs. a year ago.

Consumer expenditures on new vehicles is likely to reach all time high of $53.3 billion, up $10.1 billion from December 2019 and $6.6 billion over the previous record of $46.7 billion in August of 2019.

—–

A Remarkable Recovery, But…

Despite strong demand in the second half of 2020, the massive sales disruption early in the year will be apparent when manufacturers announce their full-year results. Total Sales in 2020 are forecasted to be down 14.8% from 2019 and retail is forecasted to be down 9.5%. Despite lower sales, higher transaction prices will enable the total value of new vehicles purchased by consumers to be down just 4% at $442 billion.

Sales & SAAR Comparison

U.S. New Vehicle	December 20201	November 2020	December 2019
Retail Sales	1,400,300 units (+1.0% higher than December 2019)2	1,022,516 units	1,237,547 units
Total Sales	1,619,000 units (-5.1% lower than December 2019)2	1,191,021 units	1,522,542 units
Retail SAAR	14.4 million units	12.9 million units	13.9 million units
Total SAAR	16.4 million units	15.6 million units	16.9 million units

¹ Figures cited for December 2020 are forecasted based on the first 17 selling days of the month.
² December 2020 has 28 selling days, three more days than December 2019.

The Details

• The average new-vehicle retail transaction price in December is expected to reach a record $38,077. The previous high for any month of $37,140 was set in November 2020.
• Average incentive spending per unit in December is expected to reach $4,014, down from the previous monthly record of $4,599, set in December 2019. Spending as a percentage of the average MSRP is expected to reach 9.2%, down two percentage points from a year ago.
• Average incentive spending per unit on trucks and SUVs combined is expected to be down $698 to $4,004, while the average spending on cars is expected to be down $253 to $4,020.
• Consumers are on pace to spend $53.3 billion on new vehicles, up $10 billion from December 2019.
• Trucks/SUVs are on pace to account for 79.1% of new-vehicle retail sales.
• Fleet sales are expected to total 218,700 units, down 31% from December 2019 on a selling day adjusted basis. Fleet volume is expected to account for 14% of total light-vehicle sales, down from 19% a year ago.
   

Observations on Residual Values

Eric Lyman, vice president, ALG:
“The residual value outlook throughout 2020 was reminiscent of the eye of a hurricane: somewhat calm and stable while surrounded by chaos. Vehicle inventory shortages and increased consumer demand for used vehicles helped buoy used-vehicle prices. This effectively eliminated widespread short-term threats to negative equity in lease portfolios and end-of-term vehicle values. In fact, strong demand for used vehicles meant that most off-lease vehicles were sold for higher prices than manufacturers had expected, delivering a significant financial windfall.

“Longer term,  the drop in lease originations and overall retail sales in 2020 will result in fewer used vehicles returning to the wholesale market, while the reduced number of vehicles sold into daily rental fleets will limit pressure on used-vehicle values in 2021 and beyond. This is a positive for manufacturers as it points to strong residuals in the future allowing them to improve profitability or offer attractive lease payments at lower cost to the manufacturer. However, there is considerable risk. Specifically, the likelihood exists that manufacturers will resume their collective quest to capture market share through profit-eroding incentives that will put pressure on the ALG benchmark residual value forecast. Despite triumph in the face of adversity, we expect old habits to return in 2021.”

Global Outlook for December 2020

Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive:
“After six months of improvement, the global selling rate declined on a month-over-month basis for the first time since the start of the pandemic, as restrictions across Europe tightened and the rate of increase in North America slowed. Even in decline, the selling rate still managed to come in just under 90 million units, a strong improvement from the rate of 49 million in April. The market continues to be supported by improvements in the light-vehicle market in China, which was up 11% in November. In addition, Japan, South Korea and India continue to show improvement as each market grew more than 6% from a year ago. Western Europe and the United States each were off nearly 16% from November 2019, but the declines are affected by fewer selling days.

“The 2% contraction in global light-vehicle sales brings the year-to-date decline to -16%, a slight improvement from October. Even with the sobering news in November and the remaining risks as 2020 closes, the global outlook for the year has improved 500,000 units to 78 million, a decline of 14% from 2019. In 2021, we’ll see a continuing path of recovery. With COVID-19 vaccinations beginning, there is room for further optimism, but the market still needs to weather the risks that are primarily centered in the first quarter. 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

 

Car Shoppers’ Willingness to Purchase Online Remains High as Manufacturer Websites Strive to Evolve, JD Power Finds

2020-12-23

jillian.breska

According to the JD Power 2021 U.S. Manufacturer Website Evaluation Study,^SM only 35% of car shoppers are delaying a new-vehicle purchase due to the pandemic, which is a decrease of five percentage points from the summer of 2020. Additionally, 45% of car shoppers are willing to purchase online and as confidence in online car purchasing increases, manufacturer websites must continue to become more sophisticated to meet shoppers’ expectations.

“The digital retail space continuously evolves but the pandemic forced many manufacturers to speed up the process,” said Jon Sundberg, senior manager of digital solutions at JD Power. “Websites are moving beyond the traditional research tools such as images and videos into a new world of allowing customers to go through the full purchase process online. Continuous updating beyond the basic research capabilities to accommodating interconnected systems which allow shoppers to purchase vehicles fully online will prove to be beneficial to shoppers and manufacturers alike.”

The JD Power U.S. Manufacturer Website Evaluation Study^SM—Winter is a semiannual study that measures the usefulness of automotive manufacturer websites during the process of shopping for a new vehicle by examining four key measures (in order of importance): information/content; navigation; appearance; and speed.

This year’s study finds that overall satisfaction averages 832 (on a 1,000-point scale) for the luxury segment, while the mass market segment averages 827.

Study Rankings

Land Rover ranks highest in the luxury manufacturer website segment with a score of 846. Lexus (845) ranks second and Cadillac (844) ranks third.

Jeep ranks highest in the mass market manufacturer website segment with a score of 850. Dodge (839) and Toyota (839) each rank second in a tie.

The U.S. Manufacturer Website Evaluation Study, initially released in 1999, is based on responses from 11,209 new vehicle shoppers who indicate they will be in the market for a new vehicle within the next 24 months. The study was fielded from October to November 2020.

For more information about the U.S. Manufacturer Website Evaluation Study,^SM visit https://www.jdpower.com/business/resource/us-manufacturer-website-evaluation-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: http://www.jdpower.com/business/about-us/press-release-info

 

Immediate Greeting of Customers Plays Key Role in Aftermarket Service Satisfaction, JD Power Finds

2021-01-13

jillian.breska

Saying hello and acknowledging customers upon arrival at an aftermarket service facility can significantly improve customer satisfaction scores, specifically those for full-service maintenance and repair, quick oil changes and tire replacement. Satisfaction scores decline when customers wait more than three minutes before they’re acknowledged, according to the JD Power 2021 U.S. Aftermarket Service Index (ASI) StudySM fueled by SurveyMonkey, which was released today.

“One of every 10 customers waits more than five minutes before speaking with someone at a service facility,” said Chris Sutton, vice president of automotive retail at JD Power. “Seeing as how the pandemic has affected service volume, it’s really important to do a great job with the customers who do come through the door. Not being acknowledged can make customers feel that their time isn’t valued. Aftermarket service providers need to ensure someone is available to greet customers when they arrive, even if it’s just to say, ‘hello.’ Otherwise, they run the risk of losing out on return business.”

The study, now in its second year following its debut in 2019, measures customer satisfaction with aftermarket service facilities, providing a numerical index ranking of the highest-performing U.S. aftermarket service facilities. Performance in three segments—full-service maintenance and repair; quick oil change; and tire replacement—is based on the combined scores for seven measures that comprise the vehicle owner service experience. These measures are ease of scheduling/getting vehicle in for service; service advisor performance; service advisor courtesy; service facility; time to complete service; fairness of charges; and quality of work.

In all three segments, customers indicate they were very often greeted immediately: 42% of the time for full-service maintenance and repair; 53% of the time for quick oil change; and 34% of the time for tire replacement. However, among customers in each segment who say they waited three minutes or more—which ranges from 27% to 39%—satisfaction scores decline as much as 219 points (on a 1,000-point scale).

Following are key findings of the 2021 study:

• It’s important to recommend additional service the right way: When service personnel recommend additional work, it’s important that customers understand its value and purpose. Satisfaction is highest in all three segments among customers who receive recommendations for—and accept—additional work. Satisfaction among full-service maintenance and repair customers is highest (804) and these customers spend an average of $564, followed by quick oil change customers (782) with an average spend of $252, and tire replacement customers (766), who spend an average of $838. “Suggesting additional work can be a real test of trust,” Sutton said. “Coming across as pushy or recommending perceived unnecessary work can negatively affect satisfaction, but downplaying potentially important work can result in a missed opportunity or even create safety concerns. It’s critical that service personnel be able to justify their recommendations.”
• Fix it right the first time: Successfully completing work the first time is the most important Key Performance Indicator (KPI) to increase customer satisfaction. When work is completed right the first time, satisfaction among full-service maintenance and repair customers increases 230 points, on average, followed by average increases of 223 points among quick oil change customers and 184 points among tire replacement customers.
• Attention to detail boosts customer satisfaction: Maintaining a clean service facility—to which customers have become highly sensitized since the pandemic began—can account for higher satisfaction scores. However, this KPI is met less than one-third of the time: 30% for full-service maintenance and repair facilities; 25% for quick oil change facilities; and 29% for tire replacement facilities. When the service facility is cleaner than customers expect, satisfaction improves between 30 and 42 points. Additionally, satisfaction can improve by 23 points when customers are contacted after service was completed. “Simple things—like explaining to customers about the facility’s cleaning protocols—can make the difference between whether or not they willingly plan to return for future business or will recommend it to others,” Sutton said. “Aftermarket service providers should pay special attention to simple actions that can enhance the customer experience.”

“Even with many Americans having reduced their travel because of the pandemic, many still require automotive service, and their service expectations remain high,” said Timothy Gravelle, senior manager of research science at SurveyMonkey. “This research confirms that quality work done promptly, explained clearly, for a fair price, and delivered with excellent customer service is what leads to customer satisfaction among American drivers.”

Study Rankings

Christian Brothers Automotive Corp. ranks highest in satisfaction for full-service maintenance and repair with a score of 869. Big O Tires (778) ranks second and Goodyear Tire & Auto Service (775) ranks third.

Take 5 ranks highest in satisfaction for quick oil change, with a score of 810. Valvoline Instant Oil Change (784) ranks second and Kwik Kar (775) ranks third.

Les Schwab Tire Centers ranks highest in satisfaction for tire replacement with a score of 820. Discount Tire ranks second (792) and Costco (780) ranks third.

The 2021 U.S. Aftermarket Service Index (ASI) Study is based on responses from 8,148 vehicle owners. Survey data collection was conducted online between July and October 2020. Survey respondents were initially selected from the more than two million people who take surveys on the SurveyMonkey platform each day, and from the SurveyMonkey Audience market research panel. Respondents were then screened for having aftermarket service performed in the past 12 months.

For more information about the 2021 U.S. Aftermarket Service Index (ASI) Study, visit https://www.jdpower.com/business/automotive/us-aftermarket-service-index-asi-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.

SurveyMonkey (NASDAQ: SVMK) is a leader in agile software solutions for customer experience, market research, and survey feedback. The company’s platform empowers over 17 million active users to analyze and act on feedback from employees, customers, website and app users, and market research respondents. SurveyMonkey’s products, enterprise solutions, and integrations enable more than 335,000 organizations to deliver better customer experiences, increase employee retention​ and unlock growth and innovation. Ultimately, SurveyMonkey’s vision is to raise the bar for human experiences by amplifying individual voices.

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

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

 

 

Retail Sales to Post First Gain Since February; Average Transaction Prices Reach Highest Level Ever

2020-09-25

jillian.breska

The Retail Sales Forecast

New-vehicle retail sales in September are expected to be up from a year ago, according to a joint forecast developed jointly by JD Power and LMC Automotive. Retail sales are projected to reach 1,157,800 units, a 3.4% increase compared with September 2019. Reporting the same numbers without controlling for the number of selling days translates to an increase of 12.4% from a year ago. While the increase vs. September 2019 is substantial, it’s important to recognize that it is being aided by the industry sales reporting calendar. September 2020 contains two additional selling days than September 2019 and has the added benefit from promotional activity related to the Labor Day weekend, which last year fell into August sales reporting.

The Total Sales Forecast

Total sales in September are projected to reach 1,288,100 units, a 7.5% decrease from September 2019. Reporting the same numbers without controlling for the number of selling days translates to an increase of 0.5% from September 2019. The seasonally adjusted annualized rate (SAAR) for total sales is expected to be 15.7 million units, down 1.6 million units from a year ago.

The Takeaway

Thomas King, president of the data and analytics division at JD Power:
“Retail sales in September are poised to post the first year-over-year gain since February, a milestone in the recovery from the disruption that COVID-19 has had on the industry. While the results are flattered by the Labor Day holiday falling within the month, the performance points to strong underlying consumer demand for new vehicles. This is despite tight inventory for many of the most popular vehicles.” The average number of days a new vehicle sat on a dealer lot before being sold is on pace to fall to 56 days, the first time below 60 days in five years. Additionally, more than 45% of all vehicles sold in September will have spent fewer than 20 days on dealer lots.

This is enabling manufacturers to reduce overall new vehicle incentives and retailers to reduce the discounts off MSRP that have historically been offered. Incentive spending is expected to fall to the lowest level since July 2019. Average spending is on pace to be $3,964 per vehicle, a decrease of $250 from last year and the first time this year below $4,000. Expressing the same figures as a percentage of the average vehicle MSRP is 9.6%, down 0.8 percentage points from last year and the first time below 10% in 15 months. For context, spending peaked at $4,953 per unit in April of this year.

Retailers also continue to post significant growth in margins on new-vehicle sales. Total grosses per unit, inclusive of finance and insurance incomes, are on pace to reach $2,189, an increase of $723 from a year ago.

—–

Transaction prices are expected reach another all-time high, rising 5.6% to $35,655. The shift towards more expensive trucks/SUVs remains a key driver, with trucks/SUVs on pace to account for 76% of retail sales vs. 72% a year ago. Low interest rates and higher trade-in values are helping to mitigate some of the increases in overall prices. The average rate for loans in September is expected to fall by more than 100 basis points from a year ago to 4.4%. Over the same time, the average monthly finance payment is up only $5 to $582, while the average finance term length is up only one month to 70 months. Concurrently, the average trade-in value has risen to $4,951, an increase of $634 or 14.7% from a year ago.

The combination of elevated sales and transaction prices means that consumers are expected to spend $41.3 billion on new vehicles in September. This represents an increase of $6.5 billion or 18.7% from September 2019.

—–

For the third quarter, retail sales are expected to reach 3.5 million units, a decline of 6.2% from a year ago. Led by the recovery in September, this represents the best quarterly performance this year, with declines of 13% and 23% in Q1 and Q2, respectively. Prices have also simultaneously risen to the highest level ever. Average transaction prices in the third quarter are on pace to reach $35,473—the first-time prices have exceeded $35,000—an increase of 6.5% from Q3 2019.

Higher transaction prices coupled with the modest decline in retail sales volume mean that consumers will spend $123 billion on new vehicles during the third quarter, an increase of $1.4 billion (1.2%) from a year ago. 

Retailer profits have also soared over the quarter and are expected to rise to the highest level in more than a decade. Total grosses (inclusive of finance and insurance incomes) on new vehicles are on pace to reach $7.1 billion, an increase of $2.3 billion (49%) from a year ago.

—–

Looking ahead to October, any easing of inventory constraints coupled with the strong underlying consumer demand that is helping to elevate sales will provide additional support for the overall recovery. “Despite some uncertainties that could affect performance in Q4, one notable tailwind could be the return of customers to the market that took advantage of lease extension offers due to disruption from COVID-19,” King said. Lease penetration in September is expected to be 26.5%, a decline of 2.8 percentage points from September 2019 and the lowest September level since 2014.  “These customers that have traditionally replaced their vehicle at the end of their lease have been waiting on the sideline, getting ready for their next purchase,” King said.

Sales & SAAR Comparison

JD Power U.S. Sales and SAAR Comparison

	September 20201	August 2020	September 2019
New-Vehicle Retail Sales	1,157,800 units (+3.4% higher than September 2019)2	1,202,949 units	1,030,354 units
Total Vehicle Sales	1,288,100 units (-7.5% lower than September 2019)2	1,329,557 units	1,281,449 units
Retail SAAR	14.4 million units	12.9 million units	14.2 million units
Total SAAR	15.7 million units	15.2 million units	17.3 million units

¹Figures cited for September 2020 are forecasted based on the first 16 selling days of the month.
²September 2020 has 25 selling days, two more than September 2019.

The Details

•    The average new-vehicle retail transaction price in September is expected to reach a record $35,655. The previous high for any month, $35,420, was set in August 2020.
•    Average incentive spending per unit in September is expected to reach $3,964, down from the previous record for the month of $4,214 set in September 2019. Spending as a percentage of the average MSRP is 9.6%, down 0.8 percentage points from a year ago.
•    Incentive spending on cars is expected to be down $189 to $3,599, while spending on trucks/SUVs is down $292 to $4,074.
•    Consumers are on pace to spend $41.3 billion on new vehicles, up $6.5 billion from September 2019.
•    Truck/SUVs on pace to account for 76.3% of new-vehicle retail sales, the highest level ever for the month of September.
•    Fleet sales are expected to total 130,300 units, down 52% from September 2019. Fleet volume is expected to account for 10% of total light-vehicle sales, down from 20% a year ago.

Global Outlook for September 2020

Jeff Schuster, president, Americas operations and global vehicle forecasts, LMC Automotive:
“The latest results are encouraging. The global light-vehicle selling rate for August passed 89 million units, up from 88 million in July. Even though volume dropped 9% year over year in August, we see more positive signs in September. China continues to lead the global recovery, with August volume up nearly 9% from August 2019. India’s wholesale demand increased nearly 15% from a year ago, surprising on the upside after posting zero sales in the month of April. The United States and South Korea also showed strength on a selling day adjusted basis. 

“Global light-vehicle sales YTD through August are down 22% from the same period in 2019, a further improvement of 2 percentage points from last month. With continued recovery as the backdrop, the global outlook for 2020 has notched upward to 76 million units, a decline of just 16% from 2019, with accelerating monthly momentum. Lockdown measures are now fairly loose in many parts of the world, but a risk of the reintroduction of more restrictive and widespread measures certainly cannot be ruled out. The United Kingdom and France could follow Australia in a return to a more stringent lockdown.”

Media Relations Contacts
Geno Effler; JD Power; Costa Mesa, Calif.; 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

 

Telehealth Patient Satisfaction Surges During Pandemic but Barriers to Access Persist, JD Power Finds

2020-09-30

jillian.breska

Telehealth has emerged as one of the bright spots in the “new normal,” giving patients the ability to meet virtually with healthcare providers from the safety and comfort of home. However, the technology is still experiencing growing pains. According to the JD Power 2020 U.S. Telehealth Satisfaction Study,^SM released today, patient satisfaction with telehealth services has been increasing during the COVID-19 pandemic, but several barriers to access still exist for many patients, including those most at risk.

“The COVID-19 pandemic has been a moment of truth for telehealth, and, by most accounts, the technology is rising to the challenge and delivering a high degree of satisfaction among those who use it,” said James Beem, managing director of global healthcare intelligence at JD Power. “However, even though the public awareness with Telehealth is higher due to the influence of COVID-19, the barriers for the consumer to engage with the technology has been a consistent theme in our research.”

Following are some key findings of the 2020 study:

• Great patient experience: The overall customer satisfaction score for telehealth services is 860 (on a 1,000-point scale), which is among the highest of all healthcare, insurance and financial services industry studies conducted by JD Power.
• Barriers to access persist: Though telehealth has been pitched as a solution to improve access to healthcare for everyone, more than half (52%) of telehealth users say they encountered at least one barrier that made it difficult to use telehealth. The most common hurdles are limited services (24%); confusing technology requirements (17%); and lack of awareness of cost (15%). Additionally, 35% of telehealth users indicate they experienced a problem during a visit. Tech audio issues (26%) are the most common problem.
• At-risk patients have lower levels of satisfaction: Overall satisfaction is 117 points lower among patients with the lowest self-reported health status than among patients who consider themselves to be in excellent health. Similarly, healthier patients are significantly more likely to understand the information provided during the visit, receive clear explanations, feel their visits are highly personalized and obtain a high-quality diagnosis.
• Safety becomes a top driver of utilization: Among patients who used a telehealth offering this year, 46% say their top reason for choosing telehealth was safety. That compares with just 13% in 2019.

Study Rankings

Amwell ranks highest in telehealth satisfaction among direct-to-consumer brands, with a score of 885. Doctor on Demand (879) ranks second.

Cigna ranks highest among payers of health plan-provided telehealth services with a score of 874. Kaiser Foundation Health Plan (867) ranks second and UnitedHealthcare (865) ranks third.

The JD Power U.S. Telehealth Satisfaction Study, now in its second year, measures consumer satisfaction with their telehealth service experience based on four factors (in order of importance): customer service (42%); consultation (28%); enrollment (19%); and billing and payment (11%). The study is based on responses of 4,302 health consumers who used a telehealth service within the past 12 months. It was fielded in June-July 2020.

For more information about the 2020 Telehealth Satisfaction Study, visit https://www.jdpower.com/business/resource/us-telehealth-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

 

Wireless Carriers Achieve Record High Satisfaction with Business Customers During Pandemic, but Challenges Loom on the Horizon, JD Power Finds

2020-10-06

jillian.breska

In March of 2020, as virtually every aspect of routine business was disrupted by the COVID-19 pandemic, one critical piece of technology kept the world connected without interruption or slowdown: the mobile phone. Accordingly, business wireless customers have responded with the highest-ever customer satisfaction scores for wireless carriers in the JD Power 2020 U.S. Business Wireless Satisfaction Study,^SM released today. However, as deferred billing that amassed under the Keep America Connected pledge comes due, some of these high scores may be compromised.

“Wireless has been a lifeline for business customers during the pandemic, and carriers really rose to the occasion by reliably delivering superb performance in connectivity, call quality and customer service,” said Ian Greenblatt, managing director of technology, media & telecom at JD Power. “The industry also rallied around the Keep America Connected pledge, whereby every major carrier agreed not to terminate service to residential or small business customers because of their inability to pay. However, that initiative ended June 30 and many small business customers may be facing accumulated bills and collection efforts that could negatively affect their perception in the coming weeks and months.”

Following are some key findings of the 2020 study:

• Record high satisfaction in depths of pandemic: Overall satisfaction climbed to record-high levels across all segments of business wireless customers. Large enterprise business customer satisfaction averages 866 (on a 1,000-point scale), an increase of 24 points from 2019. Small/medium business customer satisfaction averages 842, up 25 points from 2019, and satisfaction among very small business customers averages 795, up 7 points from a year ago.
• Very small businesses lag larger counterparts on customer satisfaction: While scores are up across all business segments, the gap between large and very small businesses is significant. Satisfaction among large enterprise customers is 24 points higher than among small/medium businesses and 71 points higher than for very small businesses. This gap is largely due to the lack of a dedicated account representative among very small business customers.
• For smaller businesses, online customer care outperforms phone-based support: Online customer service significantly outperforms phone-based customer service among small/medium business and very small business customers. Phone-based support continues to edge out digital in the large enterprise segment.

 

Study Rankings

Large Enterprise
T-Mobile (887) ranks highest in the large enterprise segment for a fourth consecutive year. AT&T (871) ranks second.

Small/Medium Business
T-Mobile (880) ranks highest in the small/medium business segment for a fourth consecutive year.

Very Small Business
T-Mobile (835) ranks highest in the very small business segment for a fourth consecutive year. Verizon Wireless (805) ranks second.

The 2020 U.S. Business Wireless Satisfaction Study measures satisfaction across six factors: performance and reliability; customer service; sales representatives and account executives; billing; cost of service; and offerings and promotions. Overall satisfaction is measured among three key segments: large enterprise (500 or more employees); small/medium business (20-499 employees); very small business (1-19 employees).

The study is based on responses from 2,787 business decision-makers for wireless services in the United States and includes evaluations of their wireless carriers. The study was fielded in July-August 2020.

For more information about the U.S. Business Wireless Satisfaction Study visit https://www.jdpower.com/business/resource/us-business-wireless-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

 

Life Insurance Customer Satisfaction Flatlines Despite Pandemic Fears, JD Power Finds

2020-10-12

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Even as deaths associated with COVID-19 eclipse 200,000 in the United States, consumers don’t seem motivated to buy life insurance and life insurance customers are largely apathetic toward their insurer despite some standout performances. According to the JD Power 2020 U.S. Life Insurance Study,^SM released today, a combination of infrequent client communications and a pervasive perception of high cost and transaction complexity have suppressed consumer interest and customer satisfaction with life insurance providers.

“The life insurance industry has a significant perception problem because, in the throes of a pandemic, consumers naturally should be more engaged with their insurer—but they aren’t,” said Robert M. Lajdziak, senior consultant of insurance intelligence at JD Power. “We’ve been observing a trend for several years that customer satisfaction with life insurance companies starts declining the moment a policy is purchased and continues to decline throughout the relationship due to a lack of policyholder contact from most insurers. The fact that insurers and agents have not been able to reverse this trend during a historic global pandemic speaks to the depth of the challenge the industry faces. Life insurance providers need to dramatically ratchet up their client communications efforts and demonstrate their value to their end customers—not just to advisors and sales representatives.”

Following are some key findings of the 2020 study:

• Life insurance customer satisfaction flat year over year: The overall customer satisfaction score for life insurance providers is 763 (on a 1,000-point scale), up just two points from 2019. Annuity customer satisfaction increases to 778, also just two points higher than in 2019.
• Customer interest in life insurance unaffected by pandemic: Even during the height of fear and uncertainty about the pandemic in March and April of 2020, a majority (70%) of life insurance customers said their perceptions of their life insurance provider were unchanged by current events. Likewise, the number of customers without life insurance who considered purchasing a policy was largely static during the same period, hovering around 40%. The main reasons customers avoid life insurance continue to be the perception of unaffordability and the complexity of the application process.
• Customer satisfaction declines with product tenure: Customers who’ve owned a life insurance policy for less than five years have the highest overall level of satisfaction with their policy (803). Scores fall 27 points among customers with a tenure of six to 10 years; by 45 points among those who’ve been customers for 11 to 20 years; and by 56 points among customers with a tenure of more than 20 years. Annuity customer satisfaction is relatively stable across tenure segments, increasing among higher-tenured customers, but influenced in those later years due to customers beginning to receive payments.
• Policy understanding is key to improvement: Overall levels of satisfaction rise considerably when life insurance customers indicate having a detailed understanding of their policy and benefits. The key driver of this understanding is consistent communication, achieved through a combination of online access, offering to review policy needs and ongoing interaction.

Study Rankings

State Farm ranks highest among individual life insurance providers with a score of 838. Globe Life (810) ranks second and Nationwide (803) ranks third.

Nationwide and New York Life rank highest in a tie among annuity providers, each with a score of 802. American Equity Investment Life Insurance (801) ranks third.

The 2020 U.S. Life Insurance Study measures the experiences of customers of the largest life insurance and annuity companies in the United States. The study measures overall customer satisfaction based on performance in six factors (in alphabetical order): application and orientation; communications; interaction; price; product offerings; and statements.

The study is based on responses from 5,469 individual life insurance customers and 3,674 annuity customers. It was fielded from June through August 2020.

For more information about the U.S. Life Insurance Study, visit http://www.jdpower.com/business/resource/us-individual-life-insurance-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

 

Auto Insurance Claims Satisfaction Climbs to Record High as Carriers Refine Customer Experience During Pandemic, JD Power Finds

2020-10-19

jillian.breska

One silver lining to the COVID-19 pandemic: a 22% decline in frequency of auto insurance repairable claims has given insurers some breathing room to refine their customer experience and  deliver higher touch and higher quality service during the claims process. According to the JD Power 2020 U.S. Auto Claims Satisfaction Study,^SM released today, that laser focus on quality service has translated into shorter cycle times, better service delivery and, ultimately, a record high level of customer satisfaction.

“The sharp decline in claims volume during the pandemic has served as a test case for the industry in how to make improvements in service delivery that translates directly to increased satisfaction and increased intent to renew,” said Tom Super, head of property and casualty insurance intelligence at JD Power. “This is important because it demonstrates that efforts to improve claimant service delivery translates directly to improved business outcomes. The challenge now, of course, will be maintaining that high level of service as claims volumes start to normalize.”

Following are key findings of the 2020 study:

• Record-high customer satisfaction with auto claims: Overall satisfaction with the auto insurance claims process increases to a record-high 872 (on a 1,000-point scale), up four points from 2019. This is the third consecutive year of improvement in auto claims satisfaction, which has been driven by increases in performance across nearly every factor measured in the study: claim servicing; estimation process; repair process; rental experience; and settlement. The only factor that has not improved year over year is first notice of loss, which remains flat from 2019.
   
• Cycle time improves as claims volume slows: Auto insurers have upped their game during the pandemic, taking advantage of the drop in frequency to increase the speed of processing for claimants. Overall cycle time for claimants with reparable vehicles has improved to just 10.3 days during the pandemic, down from the pre-virus average of 12.6 days.
   
• Quantifying the COVID-19 boost: This year’s study was fielded in four waves from November 2019 through September 2020, giving JD Power the ability to compare pre-virus levels of customer satisfaction with those experienced during the pandemic. Notably, the number of claimants who say they “definitely will” renew with their existing insurer is 76% during the pandemic vs. 72% pre-virus. Carriers have outperformed on a wide range of key performance indicators during the pandemic, including ensuring that representatives are always immediately available; completing work when promised; and providing multiple services at first notice of loss.
   
• Use of direct repair program (DRP) shops improves satisfaction: The industry’s growing use of  directly affiliated repair shops is paying off with a significantly higher overall satisfaction score (888) than for independent repair shops (844). This is driven by quicker cycle times among DRP shops and regular updates on progress.

Study Ranking

NJM Insurance Co. ranks highest in overall customer satisfaction with a score of 909. Amica Mutual (907) ranks second and Auto-Owners Insurance (890) ranks third.

The 2020 U.S. Auto Claims Satisfaction Study is based on responses from 11,055 auto insurance customers who settled a claim within the past six months prior to taking the survey. The study excludes claimants whose vehicle incurred only glass/windshield damage or was stolen, or who only filed a roadside assistance claim. The study was fielded from November 2019 through September 2020.

For more information about the U.S. Auto Claims Satisfaction Study, visit https://www.jdpower.com/resource/jd-power-us-auto-claims-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

 

Despite Challenges of 2020, Gas Utility Business Satisfaction Increases, JD Power Finds

2020-10-20

jillian.breska

Due to the COVID-19 pandemic, it is no surprise that businesses are struggling. One small bright spot exists, however, as satisfaction with gas utilities increases from 2019, according to the JD Power 2020 Gas Utility Business Customer Satisfaction Study,^SM released today. While 14% of businesses say they are worse off compared with a year ago, 67% of respondents said they are aware their gas utility offers various forms of support, which has led to a new level of overall satisfaction across the nation.

“It is very encouraging to see natural gas providers continue to improve the customer experience, especially with the challenges this year has brought,” said Carl Lepper, director of the utility practice at JD Power. “Commercial consumption of natural gas is lower than last year and, given the current work climate, we don’t yet know if this is a new normal. We will only know once traditional payment policies are reinstated and businesses start functioning at their pre-virus capacities.”

Study Rankings
The industry results for the 2020 study are reported across four U.S. geographic regions: East, Midwest, South and West. The following utilities rank highest in customer satisfaction in their respective region:

• East: BGE (for third consecutive year)
• Midwest: Atmos Energy
• South: TECO Peoples Gas (for second consecutive year)
• West: Southwest Gas

Now in its 16th year, the Gas Utility Business Customer Satisfaction Study measures business customer satisfaction with gas utility companies in four regions: East, Midwest, South and West. Each of the 60 brands included in the study serve more than 25,000 business customers, representing more than 4.4 million business customers in total. Overall satisfaction is measured by examining six factors (listed in order of importance): safety and reliability (25%); billing and payment (17%); corporate citizenship (15%); customer service (15%); price (15%); and communications (13%).

The study is based on responses from more than 9,600 online interviews with business customers who spend at least $150 monthly on natural gas. The study was fielded in two waves: January through April  and May through September 2020.

For more information about the Gas Utility Business Customer Satisfaction Study, visit https://www.jdpower.com/business/utilities/gas-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

 

Digital Adoption Rises Nearly 20% for Insurance Claims, JD Power Finds

2020-10-20

jillian.breska

Insurance claimants’ use of digital technologies continues a rapid march forward. That’s the lesson property and casualty (P&C) insurers are learning as claimants have ramped up use of digital channels throughout the claims process during the pandemic. According to the inaugural JD Power U.S. Claims Digital Experience Study,^SM released today, customer adoption of digital claims tools is up nearly 20% during the past three years¹ and customer satisfaction is highest among those who use such digital tools.

“Digital has never been more important to modern claims operations,” said Tom Super, head of property and casualty insurance intelligence at JD Power. “Personal interaction continues to be a critical part of any claims operation. However, 84% of claimants say they’ve used digital at some point during their claim,  placing insurers on notice of the evolving expectations of today’s insurance customers.”

The new study evaluates digital consumer experiences among P&C insurance customers throughout the claims process. The study examines the functional aspects of desktop, mobile web and mobile apps based on four factors (in order of importance):  range of services; appearance; navigation; and clarity of the information. The study was conducted in partnership with Corporate Insight, the leading provider of competitive intelligence and user experience research to the financial services and healthcare industries.

“Digital interaction—particularly via a mobile device—is becoming the most important battleground for the insurance customer experience,” said Michael Ellison, president of Corporate Insight. “Increasingly, the experience customers have scheduling a repair, getting updates on the progress of their claim and even reporting a new claim is occurring on an app or website, and insurers need to be able to convey their values and their unique brand attributes through those digital interactions.”

Following are key findings of the 2020 study:

• Digital adoption surges in claims process: Customer adoption of digital channels during the claims process, including digital first notice of loss, estimation and status updates, has increased 18% since 2017 as insurance customers embrace contactless interactions with their insurers.
• Satisfaction increases along with usage: Satisfaction scores among claimants who use digital channels at any point in the claims process is one point higher, on average, than among those who do not use digital channels (872 vs. 871, respectively, on a 1,000-point scale).
• Scheduling repairs through mobile app drives satisfaction boost: The overall satisfaction score among customers who scheduled their vehicle repairs through the insurer’s mobile app is 909, higher than for any other method.

The 2020 U.S. Claims Digital Experience Study is based on 2,224 evaluations by auto or home insurance customers who filed a claim in the past 12  months. The study was fielded from July through September 2020.

For more on the U.S. Claims Digital Experience Study, visit https://www.jdpower.com/business/insurance/us-insurance-claims-digital-experience-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.

Corporate Insight (corporateinsight.com) is the recognized industry leader in competitive intelligence, user experience research and consulting services to the nation’s leading financial services and healthcare institutions for over 25 years. Its best-in-class research platform and unique approach of analyzing the actual customer experience help corporations advance their competitive position in the marketplace.

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

¹Source: JD Power Auto Claims Satisfaction Study