Not many statisticians are household names, but J.D. “Dave” Power III is. Called the high priest of customer satisfaction by the business press, Power has lent his name to the market research company that has become synonymous with automotive-quality rankings. In 2006 he sold J.D. Power and Associates to McGraw-Hill for an undisclosed sum, but he remains chairman and continues to be one of the most influential figures in the global auto industry.
Power began his career doing market research for companies such as Ford and General Motors. Bored and frustrated with the way management massaged his research to justify their decisions, he left the auto industry in the mid-1960s for chainsaw maker McCulloch Motors Inc., which was having trouble cracking the consumer market. He spotted a basic flaw: The company forecast chainsaw sales based on the number of lumber trees it could find. “I said, ‘You don’t sell to trees, you sell to people,’” Power told McCullough executives.
Power’s research also showed that the saws needed to be smaller, less expensive, and able to tolerate long periods of idleness. McCulloch listened, and sales took off. Power set off on his own in 1968. Toyota was an early client, initially asking Power to survey the forklift market and beginning his long relationship with Japanese carmakers.
Today, Power is often credited with accelerating the popularity of Japanese cars in the United States. “At the time, Detroit didn’t think Japan could produce anything other than motor scooters,” he says. Based in Westlake Village, CA, J.D. Power and Associates has 750 employees in 12 offices worldwide and generates over $145 million a year in revenues, according to published reports—a fivefold increase over the past decade.
Though the company is best known for rating autos based on surveying tens of thousands of consumers a year, Power today rates products and services in categories as diverse as cellular communications, satellite TV, hospitals, banks, real estate, and airports. Heightened competition today fuels the growth of the firm. Its services have expanded to include proprietary tracking studies, media studies, forecasting, and training services, as well as business operations analyses, and consultancies on customer satisfaction trends.