ACSI: Consumer Spending May Rise Next Quarter; Customer Satisfaction for PC's and American Auto Manufacturers Rise; Yahoo Slips in Quest to Catch Google
ANN ARBOR, Mich.--Aug. 15, 2006--The American Customer Satisfaction Index (ACSI) rose for a fifth consecutive quarter to its highest level since 2004, according to a report released today. The Index stands at 74.4 on its 100-point scale and is up nearly 2 percent since the first quarter of 2005.Over its 11-year history, the Index, produced at the University of Michigan's Ross School of Business, has demonstrated that it predicts a number of essential indicators of micro and macroeconomic performance. At the macro level, customer satisfaction has been shown to be a leading indicator of both consumer spending and GDP growth. If the historical pattern holds true, the report released today indicates spending growth should increase in the third quarter, contrary to what many observers of the economy expect.
"In the last couple of years, discretionary spending money has become harder for consumers to find due to higher interest rates, rising energy costs, and growing household debt," said Professor Claes Fornell, head of the ACSI at the University of Michigan. "But a rise in overall customer satisfaction could offset the forces pointing to a slowdown in consumer spending."
At the micro-economic level, research shows that firms with higher ACSI scores tend to have higher earnings and stock returns relative to competitors. Stock portfolios based on companies that show strong performance in ACSI deliver excess returns in up-markets as well as down-markets.
The ACSI measures a different set of industries each quarter. The individual companies covered in today's report include the following:
-- Durable Goods: including automobiles, personal computers, appliances
-- E-Business: including portals, search engines, and news and information sites.
A full list of company scores follows this release.
Automobiles: Detroit Makes Slight Gains Against Foreign Competition
Customer satisfaction with automobiles reached an all-time high this quarter, up 1.3 percent to 81 on ACSI's 100-point scale. American automakers improved overall and narrowed the gap with foreign competitors, but most of Detroit's nameplates are still among the lower-scoring cars.
"Last year's customer satisfaction increase for American manufacturers came largely because of price rebates, but this year's jump is associated with improvements in product and service quality," said Prof. Fornell. "It's a better, more sustainable, long-term business strategy."
Toyota holds steady as the industry leader at its all-time high of 87. Honda and Lexus both score 86, followed by BMW at 85. Ford shares the last spot with Kia Motors, new to the Index, and DaimlerChrysler's Jeep. Among Asian automakers, only Mazda (79) and Kia are below the industry average. German carmaker Volkswagen scored 78, while Nissan of Japan rebounded 5.1 percent to 82.
Personal Computers: Whole Industry Improves
Overall customer satisfaction with the PC industry is up 4 percent to 77, its highest score since 1994. Perennial industry leader Apple Computer's customer satisfaction jumps 2.5 percent to a new high at 83, bringing it into the top 15 percent of all companies measured in the ACSI.
But the focus this year may be on Dell, with stock prices at a five-year low and a recently issued profit warning. This quarter, Dell's score rebounds 5.4 percent to 78.
"It can be difficult to combine a cost efficiency strategy with superior customer service, but Dell's early results are headed in the right direction," said Fornell. "Short-term profits are almost always adversely affected when a company invests heavily in improved customer service. For Dell, the key will be sales growth, but not necessarily short-term profit growth."
Portals & Search Engines: Google Stays on Top, Yahoo Stumbles
Google retains the top spot in the category, a perch it has held since it was first measured in 2002. Its score dropped 1 percent to 81, but the company continues to satisfy customers, even as it broadens its business beyond its core competency of search.
Last year Yahoo! hit an all-time high and looked like a contender. But this year Yahoo! falls 5 percent to 76 in its worst performance in five years. This year's ACSI drop portends further trouble.
AOL (up 4.2 percent) and MSN (down 1.3 percent) both score 74 though the two companies arrived from very different scores when the e-business industry was first measured six years ago. AOL scored a 56 in 2000, 20 percent below MSN, which had scored 71. Since then, AOL has gained a remarkable 32 percent, while MSN's improvements have been more modest (4 percent).
Online News & Information: Tightly Grouped, but much Stronger than Newspapers
Only two points separate the top and bottom companies in the news and information category, which scored 73 in aggregate. Little differentiation between competitors has kept it a tight race since the ACSI started measuring the category. However, online news and information sites considerably outperform print newspapers, which scored 63 when measured in the first quarter of 2006.
NOTE: For more information or a copy of the report, please contact Chaat Butsunturn at or 415-391-7900 x114 or at cbutsunturn@kearnswest.com.
About the ACSI
The American Customer Satisfaction Index is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. It is updated each quarter 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 about 200 companies in 40 industries and from government agencies over the previous four quarters.
The index is produced by the University of Michigan's Ross School of Business in partnership with the American Society for Quality and CFI Group, and is supported in part by ForeSee Results, corporate sponsor for the e-commerce and e-business measurements.
ACSI Over Time (Q2 2006 companies and industries)
----------------------------------------------------------------------
Baseline* 1995 1996 1997 1998 1999 2000 2001 2002
----------------------------------------------------------------------
----------------------------------------------------------------------
MANUFACTURING/
DURABLE GOODS 79.2 79.8 78.8 78.4 77.9 77.3 79.4 78.7 79.0
----------------------------------------------------------------------
----------------------------------------------------------------------
Personal Computers 78 75 73 70 71 72 74 71 71
----------------------------------------------------------------------
Apple Computer,
Inc. 77 75 76 70 69 72 75 73 73
----------------------------------------------------------------------
Dell Inc. NM NM NM 72 74 76 80 78 76
----------------------------------------------------------------------
All Others NM 70 73 72 69 69 68 67 70
----------------------------------------------------------------------
Hewlett-Packard
Company--HP 78 80 77 75 72 74 74 73 71
----------------------------------------------------------------------
Gateway, Inc. NM NM NM NM 76 76 78 73 72
----------------------------------------------------------------------
Hewlett-Packard
Company--Compaq 78 77 74 67 72 71 71 69 68
----------------------------------------------------------------------
----------------------------------------------------------------------
Electronics
(TV/VCR/DVD) 83 81 81 80 79 83 83 81 81
----------------------------------------------------------------------
----------------------------------------------------------------------
Major Appliances 85 82 82 80 83 82 85 82 82
----------------------------------------------------------------------
General Electric
Company 81 84 81 78 80 80 83 83 82
----------------------------------------------------------------------
Whirlpool
Corporation 87 82 85 82 85 84 86 83 83
----------------------------------------------------------------------
AB Electrolux NM NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
All Others NM 78 81 79 79 80 78 80 77
----------------------------------------------------------------------
----------------------------------------------------------------------
Automobiles &
Light Vehicles 79 80 79 79 79 78 80 80 80
----------------------------------------------------------------------
Toyota Motor
Corporation -
Toyota 86 84 84 84 85 83 82 83 83
----------------------------------------------------------------------
GM--Buick NM NM 84 83 84 86 86 86 86
----------------------------------------------------------------------
Honda Motor Co.,
Ltd. 85 86 83 82 81 83 82 83 82
----------------------------------------------------------------------
Toyota Motor
Corporation -
Lexus NM NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
Bayerische
Moteren Werke AG
(BMW) 82 81 81 80 86 86 84 86 86
----------------------------------------------------------------------
GM--Cadillac NM NM 88 84 88 85 86 88 86
----------------------------------------------------------------------
Hyundai Motor
Company 68 68 69 68 72 68 76 81 78
----------------------------------------------------------------------
Ford--Lincoln,
Mercury 79 84 80 81 83 82 85 82 84
----------------------------------------------------------------------
DaimlerChrysler--
Mercedes-Benz 85 86 87 87 86 86 87 86 83
----------------------------------------------------------------------
GM--GMC NM NM NM 80 78 81 81 79 81
----------------------------------------------------------------------
Nissan Motor Co.,
Ltd. 83 82 80 79 77 79 78 80 80
----------------------------------------------------------------------
GM--Chevrolet 77 79 79 78 79 76 80 78 78
----------------------------------------------------------------------
DaimlerChrysler--
Chrysler 81 82 80 80 80 79 80 78 80
----------------------------------------------------------------------
GM--Saturn
Corporation 84 83 81 82 85 80 82 80 81
----------------------------------------------------------------------
GM--Pontiac 76 79 78 78 76 78 78 78 78
----------------------------------------------------------------------
Mazda Motor
Corporation 78 77 75 74 77 76 78 78 81
----------------------------------------------------------------------
All Others NM 81 79 73 74 76 75 79 77
----------------------------------------------------------------------
DaimlerChrysler--
Dodge 80 77 77 77 78 75 81 77 78
----------------------------------------------------------------------
Volkswagen AG 74 76 76 79 78 82 83 81 82
----------------------------------------------------------------------
DaimlerChrysler--
Jeep 78 77 76 74 77 77 75 76 79
----------------------------------------------------------------------
Ford--Ford 75 79 78 77 77 77 77 78 78
----------------------------------------------------------------------
Kia Motors
Corporation NM NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
ACSI Over Time (Q2 2006 companies and industries)
----------------------------------------------------------------------
% Change % Change
----------------------------------------------------------------------
from last from 1st
----------------------------------------------------------------------
2003 2004 2005 2006 year year
----------------------------------------------------------------------
----------------------------------------------------------------------
MANUFACTURING/
DURABLE GOODS 79.2 78.3 78.9 80.1 1.5% 1.1%
----------------------------------------------------------------------
----------------------------------------------------------------------
Personal Computers 72 74 74 77 4.1% -1.3%
----------------------------------------------------------------------
Apple Computer, Inc. 77 81 81 83 2.5% 7.8%
----------------------------------------------------------------------
Dell Inc. 78 79 74 78 5.4% 8.3%
----------------------------------------------------------------------
All Others 69 71 74 77 4.1% 10.0%
----------------------------------------------------------------------
Hewlett-Packard Company--HP 70 71 73 75 2.7% -3.8%
----------------------------------------------------------------------
Gateway, Inc. 69 74 72 73 1.4% -3.9%
----------------------------------------------------------------------
Hewlett-Packard Company--
Compaq 68 69 67 72 7.5% -7.7%
----------------------------------------------------------------------
----------------------------------------------------------------------
Electronics (TV/VCR/DVD) 84 82 81 80 -1.2% -3.6%
----------------------------------------------------------------------
----------------------------------------------------------------------
Major Appliances 81 82 80 81 1.3% -4.7%
----------------------------------------------------------------------
General Electric Company 81 79 81 82 1.2% 1.2%
----------------------------------------------------------------------
Whirlpool Corporation 82 83 81 82 1.2% -5.7%
----------------------------------------------------------------------
AB Electrolux NM NM NM 80 NA NA
----------------------------------------------------------------------
All Others 77 82 79 80 1.3% 2.6%
----------------------------------------------------------------------
----------------------------------------------------------------------
Automobiles & Light Vehicles 80 79 80 81 1.3% 2.5%
----------------------------------------------------------------------
Toyota Motor Corporation -
Toyota 85 84 87 87 0.0% 1.2%
----------------------------------------------------------------------
GM--Buick 84 83 84 86 2.4% 2.4%
----------------------------------------------------------------------
Honda Motor Co., Ltd. 82 85 86 86 0.0% 1.2%
----------------------------------------------------------------------
Toyota Motor Corporation -
Lexus NM NM NM 86 NA NA
----------------------------------------------------------------------
Bayerische Moteren Werke AG
(BMW) 85 84 86 85 -1.2% 3.7%
----------------------------------------------------------------------
GM--Cadillac 87 83 86 84 -2.3% -4.5%
----------------------------------------------------------------------
Hyundai Motor Company 81 81 84 84 0.0% 23.5%
----------------------------------------------------------------------
Ford--Lincoln, Mercury 81 86 83 83 0.0% 5.1%
----------------------------------------------------------------------
DaimlerChrysler--Mercedes-
Benz 83 80 80 82 2.5% -3.5%
----------------------------------------------------------------------
GM--GMC 83 80 81 82 1.2% 2.5%
----------------------------------------------------------------------
Nissan Motor Co., Ltd. 79 81 78 82 5.1% -1.2%
----------------------------------------------------------------------
GM--Chevrolet 79 77 78 81 3.8% 5.2%
----------------------------------------------------------------------
DaimlerChrysler--Chrysler 82 80 80 80 0.0% -1.2%
----------------------------------------------------------------------
GM--Saturn Corporation 81 81 81 80 -1.2% -4.8%
----------------------------------------------------------------------
GM--Pontiac 76 79 80 79 -1.3% 3.9%
----------------------------------------------------------------------
Mazda Motor Corporation 82 78 80 79 -1.3% 1.3%
----------------------------------------------------------------------
All Others 75 78 76 78 2.6% -3.7%
----------------------------------------------------------------------
DaimlerChrysler--Dodge 78 75 78 78 0.0% -2.5%
----------------------------------------------------------------------
Volkswagen AG 76 80 78 78 0.0% 5.4%
----------------------------------------------------------------------
DaimlerChrysler--Jeep 79 77 78 77 -1.3% -1.3%
----------------------------------------------------------------------
Ford--Ford 80 76 75 77 2.7% 2.7%
----------------------------------------------------------------------
Kia Motors Corporation NM NM NM 77 NA NA
----------------------------------------------------------------------
----------------------------------------------------------------------
*All baseline measurements were taken in the summer of 1994.
----------------------------------------------------------------------
ACSI Over Time (Q2 2006 companies and industries)
----------------------------------------------------------------------
Baseline* 1995 1996 1997 1998 1999 2000 2001
----------------------------------------------------------------------
----------------------------------------------------------------------
E-BUSINESS NM NM NM NM NM NM 63.0 65.0
----------------------------------------------------------------------
----------------------------------------------------------------------
News & Information NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
All Others NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
CNN.com (Time Warner
Inc.) NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
USATODAY.com (Gannett
Co., Inc.) NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
ABCNEWS.com (The Walt
Disney Company) NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
MSNBC.com (NBC,
Microsoft Corporation) NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
NYTimes.com (The New
York Times Company) NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
----------------------------------------------------------------------
Portals NM NM NM NM NM NM 63 65
----------------------------------------------------------------------
All Others NM NM NM NM NM NM 67 72
----------------------------------------------------------------------
Yahoo! Inc. NM NM NM NM NM NM 74 73
----------------------------------------------------------------------
AOL LLC (Time Warner
Inc.) NM NM NM NM NM NM 56 58
----------------------------------------------------------------------
MSN (Microsoft
Corporation) NM NM NM NM NM NM 71 67
----------------------------------------------------------------------
----------------------------------------------------------------------
Search Engines NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
Google Inc. NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
All Others NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
Ask.com
(IAC/InteractiveCorp) NM NM NM NM NM NM NM NM
----------------------------------------------------------------------
ACSI Over Time (Q2 2006 companies and industries)
----------------------------------------------------------------------
% Change % Change
----------------------------------------------------------------------
from last from 1st
----------------------------------------------------------------------
2002 2003 2004 2005 2006 year year
----------------------------------------------------------------------
----------------------------------------------------------------------
E-BUSINESS 68.7 71.4 72.5 75.9 76.5 0.8% 21.4%
----------------------------------------------------------------------
----------------------------------------------------------------------
News & Information 73 74 75 75 73 -2.7% 0.0%
----------------------------------------------------------------------
All Others 73 75 75 78 74 -5.1% 1.4%
----------------------------------------------------------------------
CNN.com (Time Warner
Inc.) 72 72 74 72 74 2.8% 2.8%
----------------------------------------------------------------------
USATODAY.com (Gannett
Co., Inc.) 71 72 72 72 74 2.8% 4.2%
----------------------------------------------------------------------
ABCNEWS.com (The Walt
Disney Company) 74 74 74 74 73 -1.4% -1.4%
----------------------------------------------------------------------
MSNBC.com (NBC,
Microsoft Corporation) 73 74 74 73 72 -1.4% -1.4%
----------------------------------------------------------------------
NYTimes.com (The New
York Times Company) 71 70 72 72 72 0.0% 1.4%
----------------------------------------------------------------------
----------------------------------------------------------------------
Portals 68 70 71 75 76 1.3% 20.6%
----------------------------------------------------------------------
All Others 72 79 78 78 79 1.3% 17.9%
----------------------------------------------------------------------
Yahoo! Inc. 76 78 78 80 76 -5.0% 2.7%
----------------------------------------------------------------------
AOL LLC (Time Warner
Inc.) 59 65 67 71 74 4.2% 32.1%
----------------------------------------------------------------------
MSN (Microsoft
Corporation) 72 74 75 75 74 -1.3% 4.2%
----------------------------------------------------------------------
----------------------------------------------------------------------
Search Engines 68 78 80 80 79 -1.3% 16.2%
----------------------------------------------------------------------
Google Inc. 80 82 82 82 81 -1.2% 1.3%
----------------------------------------------------------------------
All Others NM 74 75 74 74 0.0% 0.0%
----------------------------------------------------------------------
Ask.com
(IAC/InteractiveCorp) 62 69 71 72 71 -1.4% 14.5%
----------------------------------------------------------------------
----------------------------------------------------------------------
*All baseline measurements were taken in the summer of 1994.
----------------------------------------------------------------------