American Customer Satisfaction Holds Steady
MILWAUKEE, Aug. 20, 2003 -- Customer satisfaction, which has ticked steadily upward for the past two years, remained constant last quarter, according to the American Customer Satisfaction Index (ACSI).
Following a first-quarter surge of 1.2 percent to a score of 73.8 (on a 100-point scale), the ACSI -- a leading indicator of consumer spending -- was unchanged for the second quarter.
"Although a climb may be preferred over a stable index, the ACSI improvements over the past 21 months cannot be dismissed by a three-month halt," said Professor Claes Fornell, director of the University of Michigan Business School's National Quality Research Center, which compiles and analyzes the ACSI data. "From the perspective of the economy's capability to generate buyer satisfaction, the outlook must be viewed as moderately encouraging."
While the ACSI closely predicted the increase in consumer spending for the second quarter (3.8 percent versus the Bureau of Economic Analysis's preliminary estimate of 3.3 percent), Fornell says that forecasting spending growth for the third quarter is a bit tricky.
"If one believes that we are in a recession, the ACSI equations suggest a growth of 2.6 percent; if not, the prediction comes out to 3.9 percent," he said. "Since the National Bureau of Economic Research is somewhat vague on exactly where the economy stands at the moment, perhaps a reasonable forecast would simply be the average -- 3.3 percent."
During the second quarter, only one of the industries measured by the ACSI showed a decline in customer satisfaction with the quality of their products and services, Fornell says. Satisfaction fell slightly overall for household appliances, but remained the same for automobiles while improving for personal computers, consumer electronics and Internet e-business (Web portals, search engines and news sites).
Although the ACSI score for the household appliance industry dropped a point to 81, it is still nearly 10 percent higher than the aggregate ACSI for all industries. Kenmore, the most popular brand, topped the industry with a score of 84, followed closely by Whirlpool (82), General Electric (81) and Maytag (81).
For the fourth consecutive year, the auto industry matched its ACSI record score of 80. Among individual car companies, however, there are several significant changes, Fornell says.
Hyundai, he notes, continues its impressive climb in customer satisfaction from an industry-low score of 68 in 1999 to a mark of 81 this year -- a 19 percent increase. Cadillac remains at the top with an ACSI score of 87, followed by BMW (85), Toyota (85) and Buick (84). Pontiac and Volkswagen, which dropped 7 percent from last year, are at the bottom with scores of 76.
"With sales and quality lagging in the past, Cadillac now seems to have hit its stride with gains in sales and a customer base no longer at, or near, retirement age," Fornell said. "As Cadillac reaches younger and more affluent customers, the importance of satisfaction and buyer loyalty will take on new significance."
Jack West, past president of the American Society for Quality, a co-sponsor of the ACSI, says the gap in customer satisfaction between a company like Cadillac and a company at the bottom, is shrinking.
"Throughout the 1990s, the difference between the top and bottom automakers in the ACSI was 18 or 19 points, but in the last four years, it's been no more than a dozen points," he said. "This shrinking differentiation is even more pronounced when comparing domestic car companies with the Europeans and the Japanese, who are now back on top in customer satisfaction -- buy not by much."
Besides automobiles and household appliances, the ACSI measured two other manufacturing durables industries last quarter -- consumer electronics, with a score of 84, and personal computers, which improved slightly to 72.
Among PC companies, Dell leads the way for the sixth straight year with an ACSI score of 78. Apple, up 6 percent, is right behind with a mark of 77, while the fall of Gateway continues -- its 69 score is down 12 percent from its peak of 78 in 2000.
"In a market dominated by Dell and Hewlett Packard, Gateway faces a difficult challenge," Fornell said. "Service expertise, which used to be Gateway's strength, has seen better days, according to customers. The company has reported negative net income and falling revenue the past five quarters."
In addition to manufacturing durables, this quarter's ACSI measured Internet e-business -- Web portals, search engines and news sites. Overall, the e-business score jumped 4 percent, from 68.7 last year to 71.4 this year.
Among portals, Yahoo! scored highest in customer satisfaction with a mark of 78, followed by MSN (74) and AOL (65). The latter bettered its score by 10 percent, thanks to an improved home page and software, as well as major upgrades in virus protection, messaging capabilities and e-mail services, Fornell says.
In the search engines category, Google continues to dominate with an ACSI score of 82, compared with Ask Jeeves' 69 (up 11 percent) and Alta Vista's 63. Among news and information sites, the collective ACSI score was 74.
The ACSI is a national economic indicator of customer evaluations of the quality of products and services available in the United States. It is updated quarterly with new measures for different sectors of the economy replacing data from the prior year. The overall ACSI score for a given quarter factors in scores from more than 200 companies in 38 industries and from government agencies over the previous four quarters.
The index is produced by a partnership of the University of Michigan Business School, American Society for Quality and CFI Group, and supported in part by Market Strategies Inc., a major corporate contributor, and ForeSee Results, e-commerce corporate sponsor.
Company scores and other information about the ACSI can be found on the ACSI Web site: www.theacsi.org .
ACSI Over Time (Q2 2003 companies and industries)
National ACSI = 73.8, steady from Q1 2003
% %
Change Change
from from
Base- last 1st
line 1995 1996 1997 1998 1999 2000 2001 2002 2003 year year
MANUFACTURING
- DURABLES 79.2 79.8 78.8 78.4 77.9 77.3 79.4 78.7 79.0 79.2 0.3% 0.0%
Personal
computers 78 75 73 70 71 72 74 71 71 72 1.4% -7.7%
Dell Computer
Corporation NA NA NA 72 74 76 80 78 76 78 2.6% 8.3%
Apple
Computer,
Inc. 77 75 76 70 69 72 75 73 73 77 5.5% 0.0%
HP-Hewlett
Packard
Company 78 80 77 75 72 74 74 73 71 70 -1.4% -10.3%
All Others NA 70 73 72 69 69 68 67 70 69 -1.4% -1.4%
Gateway,
Inc. NA NA NA NA 76 76 78 73 72 69 -4.2% -9.2%
Compaq-Hewlett
Packard
Company 78 77 74 67 72 71 71 69 68 68 0.0% -12.8%
Household
appliances 85 82 82 80 83 82 85 82 82 81 -1.2% -4.7%
Kenmore 85 85 86 83 84 1.2% -1.2%
Whirlpool
Corporation 87 82 85 82 85 84 86 83 83 82 -1.2% -5.7%
Maytag
Corporation 85 87 83 85 84 84 87 83 83 81 -2.4% -4.7%
General
Electric
Company 81 84 81 78 80 80 83 83 82 81 -1.2% 0.0%
All Others NA 78 81 79 79 80 78 80 77 77 0.0% -1.3%
Consumer
electronics 83 81 81 80 79 83 83 81 81 84 3.7% 1.2%
Automobiles 79 80 79 79 79 78 80 80 80 80 0.0% 1.3%
GM-Cadillac NA NA 88 84 88 85 86 88 86 87 1.2% -1.1%
Bayerische
Moteren
Werke AG
(BMW) 82 81 81 80 86 86 84 86 86 85 -1.2% 3.7%
Toyota Motor
Corporation 86 84 84 84 85 83 82 83 83 85 2.4% -1.2%
GM-Buick NA NA 84 83 84 86 86 86 86 84 -2.3% 0.0%
Mercedes
Benz 85 86 87 87 86 86 87 86 83 83 0.0% -2.4%
GM-GMC NA NA NA 80 78 81 81 79 81 83 2.5% 3.8%
Mazda Motor
Corporation 78 77 75 74 77 76 78 78 81 82 1.2% 5.1%
Honda Motor
Company,
Ltd. 85 86 83 82 81 83 82 83 82 82 0.0% -3.5%
Chrysler-
Chrysler/
Plymouth 81 82 80 80 80 79 80 78 80 82 2.5% 1.2%
Volvo 82 84 84 84 81 80 82 81 82 81 -1.2% -1.2%
Hyundai Motor
Company
(est) 68 68 69 68 72 68 76 81 78 81 3.8% 19.1%
Ford-Lincoln
-Mercury 79 84 80 81 83 82 85 82 84 81 -3.6% 2.5%
GM-Saturn 84 83 81 82 85 80 82 80 81 81 0.0% -3.6%
Ford-Ford 75 79 78 77 77 77 77 78 78 80 2.6% 6.7%
GM-
Oldsmobile NA NA 82 82 82 81 80 81 82 80 -2.4% -2.4%
Nissan
Motor
Company,
Ltd. 83 82 80 79 77 79 78 80 80 79 -1.3% -4.8%
Chrysler-
Jeep/Eagle 78 77 76 74 77 77 75 76 79 79 0.0% 1.3%
GM-Chevrolet
-GEO 77 79 79 78 79 76 80 78 78 79 1.3% 2.6%
Chrysler-
Dodge 80 77 77 77 78 75 81 77 78 78 0.0% -2.5%
Volkswagen
AG 74 76 76 79 78 82 83 81 82 76 -7.3% 2.7%
GM-Pontiac 76 79 78 78 76 78 78 78 78 76 -2.6% 0.0%
All Others NA 81 79 73 74 76 75 79 77 75 -2.6% -7.4%
E-Business NA NA NA NA NA NA NA NA 68.7 71.4 3.9% 3.9%
Portals NA NA NA NA NA NA 63 65 68 70 2.9% 11.1%
All Others NA NA NA NA NA NA 67 72 72 79 9.7% 17.9%
Yahoo!
(Yahoo,
Inc.) NA NA NA NA NA NA 74 73 76 78 2.6% 5.4%
MSN
(Microsoft
Corporation) NA NA NA NA NA NA 71 67 72 74 2.8% 4.2%
AOL (AOL
Time Warner) NA NA NA NA NA NA 56 58 59 65 10.2% 16.1%
Search
Engines NA NA NA NA NA NA NA NA 68 78 14.7% 14.7%
Google, Inc. NA NA NA NA NA NA NA NA 80 82 2.5% 2.5%
All Others NA NA NA NA NA NA NA NA NA 74 NA NA
Ask Jeeves NA NA NA NA NA NA NA NA 62 69 11.3% 11.3%
Alta Vista NA NA NA NA NA NA NA NA 61 63 3.3% 3.3%
News and
Information NA NA NA NA NA NA NA NA 73 74 1.4% 1.4%
All Others NA NA NA NA NA NA NA NA 73 75 2.7% 2.7%
MSNBC.com
(General
Electric/
NBC) NA NA NA NA NA NA NA NA 73 74 1.4% 1.4%
ABCNEWS.com
(The Walt
Disney
Company) NA NA NA NA NA NA NA NA 74 74 0.0% 0.0%
CNN.com
(AOL Time
Warner,
Inc. NA NA NA NA NA NA NA NA 72 72 0.0% 0.0%
USAToday.com
(Gannett Co.,
Inc.) NA NA NA NA NA NA NA NA 71 72 1.4% 1.4%
NYTimes.com
(The New
York Times) NA NA NA NA NA NA NA NA 71 70 -1.4% -1.4%
