Although customer satisfaction remained the same for the second quarter of this year (following six months of improvement), household spending should not weaken, according to the American Customer Satisfaction Index (ACSI).
The ACSI, which held steady at 73 (out of a possible 100), measured customer satisfaction levels for the quarter in manufacturing durables (automobiles, personal computers, household appliances and consumer electronics) and in e-business (web portals, search engines and news sites).
Professor Claes Fornell, director of the University of Michigan Business School's national quality research centre, says that "an obvious relationship exists between spending and the resulting satisfaction of the spender. It shows up in the correlation between the ACSI and government statistics on personal spending."
Even though the ACSI is unchanged for this quarter, the historical relationship between spending and satisfaction would have suggested a higher level of spending than that which was reported by the US Commerce Department for the second quarter. And, barring unexpected events, it may be reasonable to expect a modest rebound in consumer spending for the remainder of the year.
Manufacturing durables
In the current ACSI, scores for all four sectors in the manufacturing durables category remained the same (household appliances at 82, consumer electronics at 81, automobiles at 80 and personal computers at 71).
For the third year running, the automobile industry matched its score. The industry average has always stayed within a three point range from 78 to 80. Meanwhile, BMW, Buick and Cadillac scored 86, whilst Dodge, Ford, Chevrolet, Pontiac and Hyundai scored just 78. Fornell added that, while the overall ACSI score for automobiles has not changed much over time, the difference between the highest- and lowest-scoring decreased from 18 points in 1994 to a gap of only 8 points in 2002.
Similarly to the automobiles sector, the ACSI score for the household appliance industry remains both high and unchanged, as it has in the nine years since the ACSI began.
And, although the ACSI score for the personal computers sector did not change from a year ago, customer satisfaction with PCs is substantially below what it used to be - and lags well behind the overall ACSI average.
e-Business
This quarter's ACSI also looked at internet e-business including web portals and, for the first time, search engines and news sites.
The score for portals has climbed to 68 (up from 63 in 2000), with every portal provider improving from last year. Yahoo again set the pace for this category with a score of 76 (up from 73 in 2001), and Microsoft's MSN improved to 72 (up from 67 in 2001), with America Online up 1 point to 59.
Among search engines, which scored 68 overall, Google is leading with 80 points. Ask Jeeves and Altavista scored 62 and 61 respectively.
Such a difference among competitors is rare - usually being limited to evolving industries. Google appears to have much higher customer loyalty than its competitors. ACSI suggests that this may be due to fast delivery speeds and relevance of search results.
News and information sites - which saw the number of online visitors increase dramatically after the September 11 terrorist attacks in 2001 - had an overall score of 73. ABCNews.com led the way with 74 points, followed by MSNBC.com with 73, CNN.com with 72, and both NYTimes.com and USAToday.com with 71 points.
The ACSI is updated quarterly with new measures for different sectors of the economy replacing data from the previous year. The overall score for a given quarter considers scores gathered from 185 companies across 35 industries, and from government agencies, over the previous four quarters.
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