Customer satisfaction is at its highest level in nine years, and researchers say that could mean more spending ahead.
By MARK ALBRIGHT
Published February 19, 2004
Anyone confronted with impenetrable automated answering systems, clueless clerks or shoddy imports, consider this: Customer satisfaction among Americans hit a nine-year high in 2003.
The improvement points to stronger consumer spending in the coming months, say the people who compile the American Customer Satisfaction Index at the University of Michigan.
"A person who has a good purchase experience is more inclined to spend again," said Claes Fornell, director of the National Quality Research Center at the university.
American business came a long way just to get to this point from a low in the mid 1990s.
"Customer satisfaction hit bottom and has been slowly improving since then," said David van Amburg, who compiles the index. "They've still got a ways to go."
Based on surveys of more than 65,000 consumers and their experiences with the nation's biggest companies, the index provides ratings on a scale of 1 to 100. Scoring higher than 95 is considered impossible. Companies that rate higher than 80 are considered industry leaders. Any company that rates below the low 70s needs work.
Overall, the national customer satisfaction index rose to 74 in 2003. That's a 0.3 percent increase over 2002. Among retailers the index rose to 75, a 0.5 percent increase over 2002.
As usual, Publix Super Markets of Lakeland led the nation's supermarkets with an 82 rating, while Albertsons and Winn-Dixie, both at 73, trailed other grocers that have Florida stores. Among warehouse stores, Costco Wholesale notched an 80 vs. a 77 for Sam's Club.
With an industry average of 84, online retailers did much better than stores. Amazon.com scored a survey-leading 88 while auction site eBay hit 84.
"If Amazon goes any higher," Fornell said, "they will get a nose bleed."
Surprises included higher ratings for the fast-food industry and for the megabanks that have taken their lumps in recent years.
Measuring customer satisfaction and service is a tricky business. Results vary sharply with customer expectations. A customer at Dillard's expects more personal attention than someone wandering the self-service aisles at Wal-Mart. Typical discount store turnoffs are slow checkouts, lines for returning merchandise and shelves that are out of stock.
Many retailers' answer to poor service has been to lean more on technology than a fatter payroll. So some of the ratings improved because customers are getting used to new technologies that aggravated them a few years ago.
Customer satisfaction ratings, however, are rooted more in the performance of the products than in the ease of the transaction. So that's where manufacturers have concentrated increased spending, said van Amburg. While most manufacturers have been scoring in the 80s in the survey, the service industries lag behind in the mid-70s.
Other highlights of the latest index results:
While online retailers scored highly as a group, online travel sites didn't fare as well. Expedia dropped 2.5 percent to 78. Travelocity was unchanged at 76. Orbitz held firm at 77 and priceline.com was unchanged at 71.
"Buying a book online is a much simpler process than buying an airline ticket, which can get pretty frustrating," said van Amburg.
Target led discount stores with 77, but Wal-Mart slipped to 75, sharply below its 80 rating in 1994. Despite emerging from bankruptcy in 2003, Kmart again trailed the discount stores with a 70.
J.C. Penney's rating rose sharply to 77, the department's store chain's best rating since 1996, while Kohl's, it's biggest national competitor in the moderately priced apparel market, declined 6 percent to 79.
Dillard's scored a 75 among department stores while Sears slipped to 73 and Federated Department Stores, which owns Burdines-Macy's, was unchanged at 71.
Lowe's scored 77, compared with Home Depot's 73, while Circuit City scored a 73 compared with Best Buy's 72.
Among banks, Wachovia rose 4 percent to 76 while Bank of America was up 6 percent to 74. Both ran less than 70 through some of the 1990s.
"The banking industry has improved since it did so poorly during the last wave of big acquisitions in 1995," said van Amburg. "This improvement may not last. It appears the banks are entering another period of consolidation."
Criticized for contributing to obesity, fast-food chains scored 74, their highest rating ever. The biggest gains were Pizza Hut (up 7 percent to a 75) and McDonald's (up 5 percent to 64, but still the worst rating in the industry.) The improvement is rooted in fast-food marketers confronting critics by putting healthier alternatives on their menus, van Amburg said.
