GLITR

Posted: Tuesday, 19 August 2008 3:30PM

Consumers Cranky At Many Other Industries, UM ACSI Finds

Customer satisfaction among busiensses overall continues on a bumpy path without momentum or trend in the second quarter, according to the American Customer Satisfaction Index.

After a small uptick last quarter, ACSI slips 0.1 percent to 75.1 on a 100-point scale. The ACSI second quarter report, released today from the University of Michigan’s National Quality Research Center, forecasts consumer spending will remain weak with growth of no more than 2.3 percent in the third quarter.

“The American consumer has long been the single biggest force propping up the U.S. and the global economy,” said Professor Claes Fornell, head of the ACSI at the University of Michigan. “But declining customer satisfaction combined with weaker demand for U.S. exports may make it difficult for American households to shoulder the burden of being the locomotive for world economic growth.”

Every second quarter, ACSI features the annual measurement of the manufacturing durable goods sector and e-business category of Web sites, including automobiles, personal computers, major appliances, portals & search engines, and news & information sites.

Automobiles: Detroit Loses Ground

Hit with record losses, American auto manufacturers are also suffering from slumping customer satisfaction. No domestic car maker is represented among the top four nameplates, but the bottom three in the industry are all American brands. Yet customer satisfaction for the industry as a whole remains at an all-time high, unchanged at 82, and one American car maker, GM’s Saturn, shows considerable improvement, climbing 5 percent to tie its all-time high from 1998.

“The problem for domestic companies is that they now lag further behind their foreign counterparts,” Fornell said. “This is not going to be helpful as the Big Three will lose more pricing power and be forced to continue dependence on rebates and discounting in a market where consumer preferences keep shifting away from domestic cars.”

Lexus and BMW led all auto manufacturers at 87. Toyota and Honda each improved 2 percent to 86. Mercedes Benz, once No. 1 in customer satisfaction, continued to fall behind the leading car makers. From being the top scorer in ACSI eight years ago, Mercedes has seen a slow but steady erosion in customer satisfaction – it is now no better than the industry average.

Chevrolet, GM’s best-selling brand, took the biggest fall, losing 4 percent to 79. Chrysler’s Dodge down 3 percent to 78 and Jeep, up 1 percent to 76, anchor the bottom of the industry

Personal Computers: The Apple of Consumers’ Eye

The personal computer industry suffered a second consecutive drop in satisfaction, falling 1 percent to 74 and losing all gains made since 2005. Apple defies the industry by moving in the opposite direction and posting its largest gain ever to 85, a new all-time high for the industry. The 8 percent leap puts 10 points between Apple and its nearest rival, one of the largest gaps between first and second in any industry measured by ACSI. As Apple’s satisfaction improves, so too have its sales, market share, net income, and stock price.

“It’s hard not to be impressed with Apple,” said Prof. Fornell. “This is product extension at its best where the new products, iPod and iPhone, are helping bring new customers to existing computer products. The fact that Apple is not dependent on the Windows Vista operating system hasn’t hurt either.”

The industry aggregate decline is largely for Windows-based machines – Hewlett-Packard at 73, Gateway at 72 and Compaq at 70 each sunk 4 percent. The exception is Dell, up 1 percent to 75.

Major Appliances: Whirlwind at Whirlpool

Customer satisfaction with major appliances slid 3 percent to 80 this quarter. All three major companies declined, with Benton Harbor-based Whirlpool dropping the most, down 5 percent to 80. General Electric and Electrolux each dropped 1 percent to 80.

Whirlpool, the world’s biggest appliance manufacturers, faces increased competition at a time when domestic demand is shrinking and the cost of shipping and raw materials is rising. The company’s customer satisfaction rose after its acquisition of rival Maytag in early 2006, but the gains in satisfaction were short-lived.

More at www.theacsi.org.


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