J.D. Power III, Marketing firm founder

Power discusses how he became the man behind one of the most prestigious marketing information companies in the world.

Few have influenced the automotive industry over the past 50 years more than James David Power III. A pioneer in customer satisfaction work, he founded J.D. Power and Associates at his kitchen table with his wife and built it into a global brand. Clients of the marketing information firm—known for its awards based on consumer survey responses—include virtually every automotive manufacturer and importer serving the U.S. market, as well as many other industries around the world. Originally from New England, Power did a stint in the Coast Guard, after which he earned his MBA from the Wharton School of Business before joining Ford Motor Company.

TRANSCRIPT

Tavis: J.D. Power and Associates just about revolutionized how consumers buy cars by putting customers’ opinions front and center in published marketing reports that made the industry sit up and take notice, thankfully.

The man who devised this breakthrough marketing business is James David Power III. A new biography has just been published about him. It’s called “Power: How J.D. Power III Became the Auto Industry’s Adviser, Confessor, and Eyewitness to History.” Mr. Power, an honor, sir, to have you on this program.

James David Power III: Thank you for having me.

Tavis: I feel like I know you. We’ve never met -

Power: Yes.

Tavis: – but I see your name and your work all over the place. I was just saying to you before we came on the air here I was on two planes yesterday, and walking down two different jet bridge, I saw the J.D. Power rank and they were bragging about their on-time arrivals in one jet bridge, and bragging about customer service in another jet bridge.

I was saying to you that it might have started with automobiles, but you do this now for so many different industries. You were telling me you were actually sought out by these industries.

Power: Yes. They asked us to come and provide the same type of information that we were doing for the automobile industry, and it just grew and grew.

Tavis: How does it feel to have people not really seeking your opinion, because you’re getting the opinion of customers for them, but there’s something about your brand that they value so much that they want you to do the research for them.

Power: Well, I think it’s because of our independence, and that we don’t show favorites. We just show the facts and let the facts determine themselves.

Tavis: How have over these years you maintained that independence? I can give you a litany of examples, as you well know, of people who started out that way, and then somewhere along the way they got compromised.

Power: Yes. We had to really work at it and remember, it took us 30 years to finally get the brand image where we needed it.

Tavis: What were the biggest obstacles to getting that brand image where you wanted it over those three decades?

Power: Well, I think it was the automobile industry was production-driven, and the people in charge were those that ran the production. It was very difficult for them to do independent market research. It was always geared to what they felt the management wanted to hear.

I worked in that industry, and so I knew what it was like. I left Detroit to get out of the automobile business. Ended up in California, and at that point I said I’m going to do it myself. That’s the way we looked at it.

Tavis: What do you recall, and there are a number of stories in the book; I can point to a couple, but I’m going to let you answer the question. What do you recall as one or two of the significant breakthroughs where the brand is concerned that let you know that this brand had the power – no pun intended – to be relevant?

Power: Well, I think several things happened over the years. When we first started, we started working for one car company, which was Toyota, and it took time to get through to the Japanese executives. We had a little stonewalling being done by their American counterparts. That was the first one

The second one was when we were doing an independent survey for the Mazda rotary engine, and we sold the project results to all the manufacturers. Mazda didn’t buy it, but 14 others did. Before we knew it, one of them released it to “The Wall Street Journal” against our agreement.

I got a call from “The Wall Street Journal” in Detroit, and he started going through the report; I knew he had it. So I said, “Well, I hope you would entertain using my press release on this study so you have a balanced picture,” and he said, “Well okay, get it to me right away,” and we did. That was my first press release. (Laughter)

Tavis: The rest, they say, is history.

Power: Yes.

Tavis: (Laughter) I’ve always wondered – I want to get into the book here in just a second a bit more, and just kind of walk through some of the lessons that you’ve learned along the way.

Because I think, you know, that’s what people – we know what J.D. Power does as a company, but I’m curious as to the lessons you’ve learned as a manager, as an entrepreneur down through these years.

But before I get into that list, tell me how it feels, how you process that J.D. Power and Associates isn’t just a company, it is your given name, it is who you are. It seems to me that there’s a lot riding on that for you as an individual.

When you pull out your credit cards or you make a reservation somewhere, how do you navigate through the world when that kind of expectation and integrity and credibility is wrapped all up in your given name?

Power: Well yes, it is, but I’d say 80 percent of the people think that it’s a phony name. There’s no such guy as J.D. Power, even today. What we did was we emphasized the trophy that we give out as the brand, and that way I could stay in the background.

I did not want to favor any one manufacturer over another, so we had to remain independent and say it like it is.

Tavis: That must make it difficult when you’re pulling out of the garage in the morning to figure out what car you want to drive.

Power: Oh, no.

Tavis: They’re like, “What’s J.D. Power driving?”

Power: Yes. I used to – really, I don’t drive. I’m not a car nut; I’m more of a statistician and analyzer. I currently drive a Mercury Mirada, and it’s 11 years old now, and I only have 50,000 miles on it. (Laughter)

Tavis: You sound like Warren Buffett. You guys don’t like new cars and don’t like to drive the ones that you have.

Power: Well, we always – well, I always tried to drive the car that was perhaps being on the bottom of our list, and I had an Oldsmobile diesel, if you can remember that fiasco, and the Audi, when they had the unintended acceleration.

I got that model just to show -

Tavis: Why – yeah, why so important for you to – I think I get it, but why so important for you to drive the car at the bottom of the list?

Power: So that I wasn’t – everyone thought I would be driving a Lexus or a BMW or a Mercedes, and it dawned on me that I should not be driving one of those vehicles, because those were getting the top ratings.

So I purposely would buy one that wasn’t rated very high. Jaguar, back in’ 82. They asked me to drive it; well, of course it was on the very low end of the ratings in those days.

I drove that and had an accident – not an accident, but I was driving to the airport and the engine stopped. I pulled over on the side and I missed the flight. I got on the next flight to Washington, D.C., where all the executives were meeting.

The head of Jaguar saw me come in. I missed the better part of a cocktail party, but I got there in time for that. He says, “Dave, how’s the Jaguar running?” (Laughter) I said, “It isn’t.” I had never seen anyone’s chin drop so low. (Laughter) In front of all his competitors.

Tavis: But see, I like the way you did that, though, the way you decided which car you were going to drive. Obviously, you’re taking your life in your hand driving the car at the bottom of the list, but one, you couldn’t be accused -

Power: Sometimes.

Tavis: – of playing favorites. But you, that’s -

Power: I didn’t drive a Yugo, though.

Tavis: You didn’t drive a Yugo, okay. You’re forgiven for that. But that’s your own sort of empirical data.

Power: Yes.

Tavis: Yeah, as the owner of the company. You’re the guy, your name’s on this.

Power: I wanted to set the standards for my staff. We started with my family, my wife doing a lot of the work, and we put the children to work too. They were in there, way pre-teens, and the four of them would help mail out the questionnaires, stuff the envelopes, put a quarter incentive on it, and so forth.

Then we started getting more and more business, so we started hiring people. We called them, all of them, associates – J.D. Power and Associates. Everyone was an associate, even the janitor.

Tavis: That’s a great way to run a company. My time with you is up. I could do this for hours. But let me just highlight, if I can, a number of things. There’s a top 10 list here that Mr. Power has of things that he has learned in business along the way.

I’ll let you get the book and read them for yourself. One on the list is stay true to your values. I love number five: “Have empathy, be kind. The world seems to be lacking these days in empathy.”

I love number two: “Remember who the client is.” It is amazing to me that in this world that’s so driven by customers, driven by consumers, that still companies still don’t get it -

Power: (Unintelligible)

Tavis: – about listening to the client, listening to the customer, the consumer. It seems basic enough, but people still don’t seem to get that all the time.

Power: Right. You have to keep emphasizing it. But it’s changed dramatically in the 40, 50 years that I’ve been involved, and I think that one thing that I want to point out is that the customers, as the cars improve the quality, the customers’ expectations increased as well.

It’s an unending battle for the producers to understand that when you raise expectations, you have to meet them. So it’s an ongoing change that’s going throughout our whole industry.

Tavis: Yeah, and we have you to thank for all that.

Power: Oh, thank you. (Laughter)

Tavis: We have you to thank for all that. If you’re one of those persons, like so many others, who thinks that J.D. Power, or has thought up until tonight that J.D. Power isn’t really a person, J.D. Power is a real person and he sits in front of us tonight.

There is a new book out about his experiences over these years as a business and lessons he’s learned. It’s called “Power: How J.D. Power III Became the Auto Industry’s Adviser, Confessor, and Eyewitness to History.”

I have only scratched the surface. I think you’ll enjoy reading it, though. Mr. Power, sir, an honor to have you on this program. Nice to meet you.

Power: Thank you very much.

Tavis: Thank you for having me.

Power: I want to thank the consumers that filled out the questionnaires, millions of them over the years. That’s why I wrote the book.

Tavis: Well, we’re glad to have you on, and it was our honor to have filled them out. I’ve done one or two in my life, so there you have it.

Power: Thank you. Did you keep the quarter?

Tavis: Yes, I did, absolutely. (Laughter) Absolutely.

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Last modified: December 12, 2013 at 11:37 am