Last week was survey after survey. One survey wondered how their customers feel about American corporations, while another survey went over how buyers perceived the quality of their vehicles. And a third survey — a poll, really — found that the past decade’s speculation on which generations are buying automobiles was completely inaccurate.
Let’s start with a list The Fiscal Times published of the most respected corporations in America. Keep in mind that just being in the top 10 means the word “Excellent” was placed next to your name and position. That said, this new Harris poll found Amazon.com in first place with a rousing 86.27 percent satisfaction score. But by the time you get to fourth place (Johnson & Johnson), the scores have already fallen to 82.57 percent. Tesla made ninth place at 81.70 percent. Again, all of the Top Ten were marked Excellent on this year’s survey.
Now let’s contrast that with customer satisfaction scores of local automobile dealers, many of whom field CSI scores well over 90. Speaking specifically of Chrysler, the manufacturer’s standard for Sales Advocacy is 92.4 percent, while the Overall Sales Consultant guideline is a whopping 93.3 percent. That’s right, the guideline for the sales department at a Chrysler dealership is fully seven points higher than Amazon.com’s real world score — and some dealers do much better than that.
Jim Hardick, General Manager of Moritz Chrysler in Fort Worth, was kind enough to send me his official CSI scores for January of this year; and for Sales Advocacy his staff scored 95 percent. They achieved a perfect overall Sales Consultant Score of 100 percent. Now, the first time I ever saw anyone hit a 100 percent CSI score was Ken Thompson’s Chevrolet surveys, almost two decades ago. But, over the last few years, many local new car dealers in Dallas Fort Worth have scored well into the 90s and above in terms of customer satisfaction. Now, one car company even tougher than Chrysler on its sales expectations is BMW; the manufacturer demands 95.5 percent satisfaction with service and 98.5 percent with the sales department. Chad Chase at Autobahn BMW said his family’s store typically came in right at BMW’s demands for service satisfaction, while the sales department was slightly above the BMW standards. For the record, both Moritz and Autobahn are part of my radio show.
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It’s that Grumpy 15 Percent …Now, we know that there are still some bad actors in the auto industry. After all, the national automotive CSI scores are the same 84 – 85 percent they were 30-some-odd years ago. Which makes sense, because 85 percent of the buying public is wonderful to deal with, whether they’re making a small retail purchase or something as large as an automobile. But that percentage also disproves most media reporting on car buying in America. Still reported as if purchasing a new car were a form of medieval torture, yet survey after survey for decades has shown that those purchasing a new car are either as happy or happier than people enjoying things from Apple (82.07 percent CSI) or products from the Walt Disney Company (82 percent CSI). The customer satisfaction surveys have always shown a major disconnect between buying a new car and the media reporting of the same.
In the American Customer Satisfaction Index covering the Cable TV industry, the best company listed only manages a satisfaction rating of 80. The best department store has only an 82 percent satisfaction rating, while the best airline has the same score as the best Cable TV provider. ACSI also tabulates all of the industries in America and averages out how the public feels about them overall — and that score is a pitiful 75.4 percent for 2016. Just for the record, if a new car dealer had a 75.4 percent customer satisfaction rate, their manufacturer would have sent out the first termination of franchise notice already. If their customer satisfaction wasn’t improved quickly, that dealer would lose his or her franchise.
Now let’s discuss the J.D. Power Vehicle Dependability Study for last year. One wonders how this company stays in business, because its studies have become meaningless — for the most obvious reasons.
According to Power’s group, the communications, entertainment and navigation systems now account for 22 percent of all reported automotive quality problems. What does that mean? Is the equipment actually failing, or is someone just frustrated with making it work? Both issues are counted as a negative on this study. In fact, however, not figuring out how to use your car’s navigation system is not the same as its failing mechanically.
This first came to my attention years ago from one of Power’s Initial Quality Surveys, in which Hummer, then brand new, was savaged by owners for two “major problems.” The first was poor fuel efficiency, which is not a defect at all — just a reality. The second was that the headlights were set too high. Again, not a defect: truck headlights are higher off the ground than an automobile’s. That’s why, when you drive down the road at night, the pickup truck’s headlights behind you are blaring into your rearview mirror: because those headlights are higher than your trunk.
And why does Power continue to use a ranking based on 100 cars? It’s easy enough to move a decimal point. In this case, of 100 cars sold Lexus came in at first place with 110 problems. Why not just say the average Lexus has 1.1 problems to correct? Like I said, move the decimal point.
But even this survey is almost meaningless. Here’s why: Does Lexus’ exceptional 1.1 problems per car mean that engines seized up or transmissions came apart? After all, Cadillac has only 1.52 problems per vehicle; and if their problem is something like the cigarette lighter doesn’t work, combined with one blown fuse, that’s minor compared to car companies with better scores if their mechanical problems are bigger financially in nature.
Tens of millions of cars have been recalled for having Takata airbags in them. Honda, covered by this survey, has a bunch of them, yet it shows Honda having only 1.43 problems per car. Does that mean if you take Takata out of the equation, Honda has only a .43 percent problem rate? After all, these are three-year-old cars, and that means almost every Honda involved in this survey has a failed Takata airbag in it. Shouldn’t that count as one problem in every Honda?
The point here is that a fuse blown is a problem on this survey, and so is a transmission that craters. Those problems are not the same in customers’ minds, yet each counts as an equal one problem per car.
Ultimately, most people are not that put off by problems with their vehicles. In the late Nineties, there was a huge recall because transmissions in Lincoln Navigators were failing very rapidly. A couple of our radio station sales reps owned that vehicle, and both lost their transmissions within a few thousand miles. Sure, they were concerned; but, as I told them, it’s no big deal other than the inconvenience. They would get brand new transmissions, and mechanically transmissions are any vehicle’s most bulletproof part. One of the two went on to purchase another Navigator a few years later.
Now, if I go back even further, in the early Eighties Mercedes’ best selling vehicles were their 300D and 300 SD models — or those with an inline five-cylinder diesel engine. And in those days, if it was cold enough outside, the glow plug just wasn’t enough to kick-start that engine. So in December of 1983, when an ice storm and frigid weather blew through and stayed in North Texas before Christmas, unless one had a heated garage it was tough to get those engines to turn over and start.
Of course, knowing this, the company inserted a coupon for a free engine block heater in every Mercedes buyer’s owner’s manual. Hard to figure out how many customers called, furious, that week because they couldn’t drive their vehicle. Even more remarkable is that there were fewer than a handful of Mercedes engine block heaters in the entire U.S. that week. Who knows? Maybe the Northern dealers knew to order and stock that part before winter hit — but I can’t tell you how many customers took my head off on the phone that week.
Yet it really didn’t seem to put anyone off buying a Mercedes-Benz after that winter. This proves my point: Those surveys don’t mean much in reality. They don’t influence purchase decisions in the short term, no less further out.
Oh, and that new survey about the percentage of cars being purchased by Millennials? Sure enough, they are now purchasing right at the same percentage of new vehicles that Baby Boomers bought back in the late Sixties, Seventies and Eighties. So 100 percent of the speculation that Millennials didn’t like cars, or couldn’t care less about owning them, was false. They simply needed better jobs to afford them. (And for their parents to quit buying their cars for them) Which is exactly the ground we covered in this column years ago.
Makes you wonder why all of us love to read surveys. Because at the end of the day, they never seem to say anything truly meaningful or affect us in any way.
© 2017 Ed Wallace
Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, conferred by the Anderson School of Business at UCLA. He reviews new cars every Friday morning at 7:20 on Fox Four’s “Good Day” and hosts the top-rated talk show, “Wheels”, 8 a.m.- 1 p.m. Saturdays on 570 KLIF AM. E-mail: email@example.com