• May 17, 2007
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

Customer Sat Is Rising Slower

The American customer's satisfaction with airlines is at its lowest point in seven years, according to a report by the University of Michigan's American Customer Satisfaction Index (ACSI). The airline industry's ACSI--an indicator of customer evaluations of the quality of products and services available to household consumers in the U.S on a 100-point scale--slipped 3 percent from Q1 2006's 65 to Q1 2007's 63. This represents the poorest mark of all industries included in the study. "The same problems that have pulled airline passenger satisfaction down the past few years--disenchanted employees, increasing fuel costs, bankruptcy, and now also record levels of lost, delayed, and damaged luggage--cause it to drop again," writes Claes Fornell, a professor at the University of Michigan and head of the ACSI. 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 supported in part by ForeSee Results. About 25,000 consumers were surveyed for this report. Utilities, airlines, express delivery companies, the U.S. Postal Service, hospitals, hotels, fast-food and full-service restaurants, telecommunications companies, and computer software companies were among the companies evaluated for the report. (The only named software company, Microsoft, pulled in a Q1 2007 score of 70, down from Q1 2006's 73.) Among the airlines Southwest Airlines led the way with a Q1 2007 score of 76, up from Q1 2006's 74, trailed by "all others" (from 74 to 75), Continental Airlines (from 67 to 69), US Airways (from 62 to 61), Northwest Airlines (unchanged at 61), and American Airlines (62 to 60). Delta Airlines (64 to 59) and United Airlines (63 to 56) suffered the biggest skids. "Like Delta, United also emerged from bankruptcy with the same type of cost-cutting, renegotiation of employee contracts, and termination of pension plans," Fornell writes. "Delta and United may be out of bankruptcy, but they are now facing more problems with passengers. Unless these problems are resolved, the future does not look bright." The hotels sector pulled in a stronger ACSI score than its hospitality cohort--71 in Q1 2007, albeit a year-over-year 5.3 percent decrease from Q1 2006's 75. Marriott International rated the highest with an ACSI tally of 79, up 5.3 percent from Q1 2006's 75 while Ramada Franchise Systems had the lowest point showing (70 to 69). ACSI segments the telecommunications industry into four areas: fixed-line service, wireless service, cable and satellite television, and cell phones. The fixed-line service and cell phone categories fared the best, each securing an ACSI mark of 70, the same as Q1 2006, while the wireless service industry improved from 66 to 68 and cable and satellite TV fell from 63 to 62. More specifically, within the fixed-line service industry Qwest Communications International and Verizon Communications each tallied a score of 72, up 2.9 percent and 4.3 percent, respectively. Cox Communications experienced the biggest decrease, 7.9 percent from 76 to 70, while Embarq notched the lowest score (from 64 to 66). Motorola and Nokia led the cell phone crowd, each with 72, followed by Samsung Electronics America and "all others," each with 70. Verizon outpaced all wireless service category contenders (from 69 to 71), but Sprint Nextel rounded out the bottom dropping from 63 to 61 .The DIRECTV Group's ACSI score fell four points from Q1 2006's 71 to Q1 2007's 67, but its point showing is strong enough to tie with EchoStar Communications (from 68 to 67) for the top score in the cable and satellite TV industry; Charter Communications had the weakest score in the cable and satellite TV category (unchanged at 55). Overall, the aggregate ACSI score is up 0.4 percent to 75.2 percent, the highest quarterly national average in the ACSI's 14-year history. "The good news is that the level of customer satisfaction is pretty high and it is improving," Fornell says. "But it is improving at a slower rate, and quite a few companies are not keeping up." Related articles: Airline Quality Falls
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