Customer satisfaction with the goods and services that Americans buy improved in 4Q 2008, according to the American Customer Satisfaction Index (ACSI). The index climbs to 75.7 on the ACSI’s 100-point scale, up 0.9% from the previous quarter.
Close to the end of the 2001 recession, an uptick in ACSI signaled that a rebound in the economy was near. But as the current recession has deepened, consumer behavior has changed much more than in earlier economic slowdowns. Consumer spending has continued to weaken while savings have gone up, suggesting that at least for the short term there will be less revenue for sellers and more pressure on profit margins and for cost reductions.
"For consumer spending to rebound, two conditions must be met: consumers must be favorably disposed to spend and have the means to spend," said Professor Claes Fornell, head of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference. "The good news from ACSI is that the first condition has been met: customer satisfaction is looking up. But it remains to be seen to what extent the government stimulus plan will help translate stronger satisfaction into increased consumer demand."
According to ACSI, customer satisfaction with the retail sector, which includes department and discount stores, specialty retail stores, supermarkets, gas stations, and health and personal care stores, gained 1.3% to 75.2.
ACSI said that most retailers have seen falling stock prices, but those that improved customer satisfaction were punished less by investors. On average, retailers with improving ACSI scores lost about 30% of their market value in 2008, while those with declining ACSI scores lost nearly twice as much (57%).
The finance and insurance sector improved slightly, up 0.7% to 76.0, erasing a corresponding deficit from a year ago. Healthcare insurance gains 3% to an ACSI score of 73, led by similar 3% improvements for the Blue Cross Blue Shield Association (73) and WellPoint (68).
The property and casualty insurance industry improved 1.3% to an ACSI score of 81. Smaller insurers lead the category at 81, unchanged from 2007.
The ACSI score for e-commerce fell 2% to 80. Online retail declined 1.2% to 82, driven mostly by drops for Amazon and eBay. But with a small dip, Amazon (-2% to 86) remains the second highest scoring firm of all companies in this release. For e-Bay, the ACSI score fell 4% to 78, an all-time low.
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