I've always heard about JD Powers' coveted award. They review products and services and rate them on a variety of factors. When a product wins the award, they often let customers know via their advertising.
But how accurate is this information? Well, in some respects it's very good. In others, it's missing something.
They compile their information solely from customer surveys. As long as they have a large enough sample this is good information, but in some cases it's incomplete. For example, customers may be very pleased with a certain car, but JD Powers doesn't include crash test ratings. I would certainly want to know that about a car before I bought it. What about insurance? They have ratings on everything from cost to claims, so they must have surveyed some customers who had claims. I would also love to see the policies reviewed by an expert who could compare coverage. I'm sure their process for sending out surveys and collecting data is audited by a third party, just like financial statements are. As long as you know how they get their information, that's fine. You probably still have some research to do before you buy.
Here's one problem that concerns me, though. Companies have to pay JD Powers to have their product reviewed. If they win an award, they have to pay again to use their name in their advertising. This doesn't mean that the ratings are suspect. They have a reputation to protect, and I'm pretty sure that there survey methods are very good and well documented. The money issue does present a few problems, though.
Not all products or services in a category will be reviewed. I saw a category with less than ten companies reviewed. That's only a small fraction of the companies that make this particular product. And what about companies that participate, but routinely end up at the bottom of the ratings? Why would they pay money to participate again?
Of course any company would have to make money somehow to pay for all the work involved in conducting the surveys. They don't sell a magazine like Consumer Reports.
Maybe they should have memberships, like the Better Business Bureau does. Companies would pay a fee to be audited for certain minimum requirements. If they don't meet these requirements, they can't become members. They could use this designation in their advertising so that customers know that JD Powers has verified that they've met these requirements. Then they could take the money from memberships and use it to survey customers of all products and services in a category, not just those that are members. This would be more beneficial to the companies who rate the highest because customers could see how they stack up against all of their competitors.
