“The fact is, foreign makers have been very good at making quality the entire organization’s focus,” he says. “For American automakers, quality is relegated to a department. If there’s a quality problem, the CEO will hammer that department. But that’s not the way it should be.”
Claes Fornell, head of the ACSI at the University of Michigan, reports that rebates, low-cost financing and employee discounts for the public have led to higher sales and ACSI scores in the short term, but they have also taken a toll on profits. Ten years of ACSI data across many industries have shown that while price incentives can be a quick fix to sluggish sales, the remedy is usually temporary and directed at symptoms rather than underlying causes. Rising satisfaction with foreign cars is due to improvements in quality and customization rather than a focus on price.
“It’s still not clear that Detroit is taking customer satisfaction, or the lack thereof, seriously,” says Fornell. “Their measurement procedures are primitive, problems aren’t well-identified, and across-the-board price cutting to reduce inventory has become standard but is not a sustainable strategy.”
The ACSI measures a different set of industries each quarter, and each industry is measured once per year. The second-quarter report examined manufacturing and durable goods (automobiles, personal computers and appliances), and e-businesses. The overall ACSI stands at 73.1, halting a six-month decline that left the index more than a point lower than this time last year. In general, a change in the ACSI in one quarter, adjusted on the Consumer Price Index, has been followed by a proportional consumer spending change the following quarter.
Overall customer satisfaction with the PC industry was unchanged from a year ago at 74, although internal changes have given Apple a strong lead. Customer satisfaction with the company was measured at 81, far above its peers. Dell’s scores fell precipitously, down 6 percent to 74 after several years of leading the industry. Customer service and service quality were cited as problems. Similarly, Hewlett-Packard continues to struggle with lagging satisfaction three years after its merger with Compaq. The company scored 67, its all-time low.
“When people are satisfied with goods and services, they tend to purchase more,” says Fornell. “It’s a good sign that satisfaction is holding steady this quarter after a six-month drop. It may counteract some of the recent constraints on consumer spending such as high energy prices.”
The ACSI is a national economic indicator of customers evaluations of the quality of products and services available to household consumers in the United States. For more information, visit www.theacsi.org.
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