Delight: A More Comprehensive Measure of the Customer Shows that It's Not Just Size that Counts.

SAN DIEGO -- 2004 is over. Some automotive manufacturers were winners and some fell short of their targets. Strategic Vision Inc. (SVI) takes a clear position on the key to success: Delight your customers. Who did it well and who did not? What do you need to do to create a success? Where can you go next to create a positive leverageable position that leads to success? Who will be the winners for 2005?

In order to answer these questions, Strategic Vision is providing its Total Delight study a new title: Customer Delight. "This re-orientation focuses on the key player in the equation: your customer," stated Dr. Darrel Edwards, founder of Strategic Vision Inc., a research-based consultancy. "No matter how much you put into a product or how well you execute your plan, if you do not Delight your customer, you have failed. In order to help product planners develop delightful vehicles that will address the needs and desires of customers, we created the Customer Delight measure that reflects both the rational and emotional aspects of customers' responses."

The Edwards Customer Delight Scale(R) provides a comprehensive look at the product attributes and benefits that explicitly create "super-positive" delightful responses from the primary drivers of the vehicles.

"Four significant issues emerged to lead the multitude of discoveries that are revealed with the new measure: (1) the industry continues to improve its ability to Delight its customers; (2) attention invested in a small car or truck can produce as positive a response as that created by a much larger and often more expensive vehicle; (3) there is a new kid on the block that needs attention: the Wagon/Sport Wagon, and (4) the hybrids are coming ... actually, they are already here," noted Dr. Edwards.

Overall, the CDI(TM) (Customer Delight Index(TM)) is 48 points higher (04 CDI = 529 vs. 03 CDI = 481). The index is calculated from the "top box" scores recorded for 110 product attribute/benefits versus the other responses recorded for the vehicles the respondents primarily drive. The 48-point gain on a scale that records responses ranging from 000 to 1000 is a statistical giant step for the industry.

Strategic Vision, has often exhorted the industry to think of an "entry level" vehicle as "a noble destination" to which customers aspire as they choose their first car or truck or chose a vehicle that will explicitly fulfill their needs at a particular point in time. Hyundai's Small Car Elantra (CDI = 602) created as much Delight for their customers as did many larger or more expensive vehicles (Large Car: Mercury Marauder = 583; Large SUV: Nissan Pathfinder Armada = 583; Near Luxury: Lexus ES 300 = 597; Luxury: Acura RL = 593).

The new, emerging, morphing class of vehicles arises out of the traditional categories and appears as a cross between wagons, sport utilities and tall cars. They are the new capable vehicles that Dr. Edwards described in a seminar for the automotive community five years ago when he introduced the concept of the STAR (part SUV, part Truck and part CAR). Now, they are here in force. Chrysler's revolution took the shape of a PT Cruiser; Volvo introduced a Sport Wagon; Honda has its Element; Toyota produced a new line and introduced its Scion xB. While these vehicles may rest uneasily in several current segments, they will have evolved to form a new class in 2005 for SVI.

From electric to hybrid, the industry is poised to meet the demands for fuel efficiency, some political freedom from oil, and environmental friendliness. This new segment will find a place in the immediate future although trying to predict the exact time shows the complexity of the issues involved in the transformation. Beyond the Prius, Toyota proposes to have a hybrid alternative in all of its segments. Toyota's bold proposition potentially holds tremendous merit for the automotive industry, and it exposes the need to rethink segmentations in 2005 that have been in place for decades.

The Most Delightful Vehicles in Class

The Far Eastern and European imports dominated the car and SUV classes with the Volkswagen Phaeton presenting an amazing balance between luxury and performance (CDI = 800), receiving the highest score on the 2004 Delight Index(TM). The Lexus RX330 (CDI = 724) was a leader in the truck-based vehicle segments. The Lexus SC430 Convertible (CDI = 761) and the Mercedes-Benz CL Coupe (CDI = 658) also received CDI(TM) scores from their drivers that out-reached the scale's typical top end. Delight Scores that surpass 700 on our 0-1000 point scale describe vehicles that have essentially few flaws from the drivers' perspectives.

The Japanese OEMs lead in 9 of 23 segments. In 2004 Toyota (Corporation CDI = 517) remained below the threshold (Industry average = 529) in delighting their customers. While they consistently make "Excellent" vehicles, they do not create the competitive edge that Delight brings. Honda (Corporate CDI = 555) held its ground with their Odyssey (CDI = 539) and their Element (CDI = 597) segment winners.

The domestic manufacturers remained strong in Pick-Ups, leading all segments. The new revitalized Ford F-150 (CDI = 643) revolutionized their product, receiving a +189 point boost in their CDI score. The improvements are also reflected in the Ford-250/350 (CDI = 554), leading the segment. Such a remarkable change can only mean that the execution matched a plan that was directly responsive to the customers' desires and needs. The Chevrolet Colorado entered the market with a CDI = 539 in a segment that has an average CDI = 431. It is in a class that has room for improvements but made a strong entry.

Korean manufacturers continued to do well with their strengths: Hyundai Elantra (602) in Small Cars, and the new Kia Amanti (635) in Mid-Size Cars.

Following are the winners of the Most Delightful vehicles in their class (Customer Delight Index(TM) scores). Strategic Vision's 2004 Customer Delight Index(TM) was calculated from the responses from 74,910 new vehicle 2004-model owners who made their purchases between October 2003 and March of 2004. They had owned their vehicles for at least 90 days before they were surveyed. The primary driver of the vehicle is measured.

Class                           Most Delightful Vehicle  Delight Score

Cars
1 Small Car                     Hyundai Elantra                   602
2 Compact Car                   Toyota Prius                      658
3 Compact Wagon                 Scion xB                          559
4 Mid-Sized Car                 Kia Amanti                        635
5 Mid-Sized Wagon               Volvo 40                          523
6 Larger Car                    Mercury Marauder                  583
7 Near Luxury Car               Lexus IS300                       718
8 Luxury Car                    Volkswagen Phaeton                800

Class                           Most Delightful Vehicle  Delight Score

Cars
9 Luxury/Sport Wagon            Audi Allroad Quattro              652
10 Small Specialty Coupes
    less than $25k              Mini Cooper                       674
11 Small Specialty Coupes
    greater than $25k           Mercedes-Benz CL Coupe            758
12 Mid-Specialty Cars           Pontiac GTO                       654
13 Convertibles
    less than $30,000           Volkswagen New Beetle
                                 Convertible                      584
14 Convertibles
    greater than $30,000        Lexus SC430                       761

Vans and Trucks
15 Minivans                     Honda Odyssey                     539
16 Small SUV                    Honda Element                     597
17 Mid-Size SUV                 Nissan Pathfinder                 625
18 Large SUV                    Nissan Pathfinder Armada          583
19 Near Luxury SUV              Lexus RX330                       724
20 Luxury SUV                   Cadillac Escalade                 704
21 Compact Pickup               Chevrolet Colorado                539
22 Full-Size Pickup             Ford F-150                        643
23 Heavy Duty Pickup            Ford F-250/350                    554

With a top score of 1000, these latest scores demonstrate that there is major room for improvement on product Delight in all vehicle segments.

In 1995, Strategic Vision introduced its Total Quality Index(TM) to measure the complete assessment of Quality as experienced by the customer in the automotive industry. This more complete measurement of Quality considered the whole vehicle ownership experience including the customers' emotional response. "Measurement in the industry had "stretched" satisfaction nearly to its limits. In 1995 and now in 2004, Strategic Vision has enhanced the measurement of Quality by using a more discriminating scale. However, the measure of Delight goes further," said Dr. Edwards, father of the Total Delight concept.

"A Delight rating requires a more positive, complete response than simply 'Excellent' or 'Completely Satisfied,'" asserted Dr. Edwards. "Important to understanding Delight was uncovering the point that 'Satisfaction,' even 'Completely Satisfied' meant that the manufacturer had fulfilled the basic contract with the customer. You can even create an 'Excellent' vehicle without delighting your customer. When you Delight your customer, you create stronger bonds of emotional commitment to the product, the brand and the manufacturer. We have demonstrated these links in multivariate procedures that predict positive outcomes from complex measures."

The Customer Delight Index Study(TM) is intended to help automotive planners, engineers and designers understand how to specifically improve their products. The information can also give communicators direction to create a leverageable position for the brand and model. The scores can also direct customers to models with specific characteristics that might stand out in a class. Delight is the more sensitive, informative, and useful score for 2004 and beyond.

Delighting customers with products that go beyond satisfaction will be the key for the domestic manufacturers to make their ways back into the hearts of the consumers.

For more information, visit www.strategicvision.com.