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The University of Michigan's Claes Fornell, who is in charge of the survey, says that satisfaction and spending are closely linked. Other economists don't believe the link is clear on a national level, although they say differences among companies in the same industry do help determine who wins market share. The industry breakdowns in the latest survey provided some surprises. ACSI scores for the computer industry declined 4.1% from 74 for the first quarter to 71, the lowest level since 1998. Every computer maker in the survey took a hit. Although personal computers have become faster, more powerful and cheaper, some industry executives admit that computer companies may not be doing enough to help consumers learn how to use their machines. "We're seeing a lot more novice users becoming part of our customer base," says Rick Chase, vice president for customer service at Dell Computer Corp., of Austin, Texas. "It probably sets an even higher need for assistance." He says that is especially true because computers are becoming more complex, as consumers use them to handle everything from managing digital photos to downloading music. But with widespread cost-cutting, customer service at many companies might be deteriorating. The biggest loser among computer companies was Gateway Inc., which saw its ACSI score fall 6.4% to 73. The company, which posted a $524 million loss for the first half of the year, has gone through wrenching changes recently, including a consolidation of three separate customer-service units into one. Yet Nemo Azamian, Gateway's vice president of customer services and support, said the San Diego company has made big improvements in satisfaction since the return of its retired chief executive, Ted Waitt, in February. One of Mr. Waitt's first acts, says Mr. Azamian, was to scrap a performance incentive applied to customer-service representatives that encouraged them to get off the phone with unhappy users as quickly as possible. Mr. Azamian says Gateway's internal measures have turned up. In one measure of customer satisfaction, he says, 75% of Gateway customers gave the company a thumbs-up grade of at least six out of seven. That is up from 68% who ranked the company the same way in October, he says. International Business Machines Corp., Armonk, N.Y., which showed the second-largest drop in satisfaction, declined to comment on the survey. Providers of satellite and cable television, which were measured for the first time in the survey, ranked even lower than computer makers. Some analysts said that isn't too surprising. Not too long ago, cable consisted of a collection of local monopolies that paid little attention to customer service. In fact, service was so poor that in 1992 Congress mandated that cable companies improve their customer-help lines. "There continue to be service issues," says Tom Wolzien, a cable analyst with Sanford C. Bernstein & Co. But he notes that the cable companies, which have invested millions in customer-service centers, still have improved sharply from where they were in the early 1990s. Praise for Old Economy When it comes to Old Economy staples such as cars and household appliances, consumers are far more complimentary. The Kenmore brand of home appliances, which include a range of products from refrigerators to dishwashers that are sold exclusively at Sears, Roebuck & Co., Hoffman Estates, Ill., received an ACSI score of 86, up 1.2% from 85. Mr. Fornell says consumers like Kenmore because some of its products are among the most energy-efficient on the market. Unlike computers, these appliances are simple to use and don't break down very often. The scores for two appliance makers, Maytag Corp. in Newton, Iowa, and Whirlpool Corp., declined, even though their ratings remain relatively high. Both companies have been struggling with declining sales and profits in recent quarters, but Shawne Howell, director of marketing intelligence at Whirlpool, said the Benton Harbor, Mich., company's internal service numbers hadn't declined during the past year, though she added they were in the "same ballpark" as the ACSI index. Maytag spokesman James G. Powell said, "Our internal and external data indicate the quality of both our products and our consumer service continue to improve." Demographic trends might have something to do with some of the differences between manufacturers. Some analysts contend that young consumers are less loyal to specific products. So products that appeal to older Americans sometimes do better in quality rankings. Consider Cadillac, General Motors Corp.'s luxury car. With a rating of 88, it ranked higher than every other product or company in the University of Michigan survey except H.J. Heinz Co., Pittsburgh, which received a rating of 90 when it was last measured during the third quarter of last year. Mr. Fornell says Cadillac benefits in the rankings from a limited base of very loyal customers, the bulk of whom are men over the age of 65. "Customer satisfaction is as much about good customer selection and segmentation as it is about quality," says Mr. Fornell. Jeff Kuhlman, a spokesman for Cadillac, says that while older customers are partly responsible for its strong showing, it believes that the introduction of new cars, such as the Escalade sport-utility vehicle, which appeals to buyers in their 40s, also helped its rating. Even though most car companies received above-average scores, two models, Dodge and Lincoln-Mercury, saw statistically significant declines. However, Marci Evans, a spokeswoman for Ford Motor Co., which produces Lincoln-Mercury, said that separate surveys conducted by the research company J.D. Power and Associates showed its customer satisfaction had improved. Ms. Evans also suggested that the ACSI survey wasn't wide enough. "They have a relatively small sample size, 250 respondents per brand," she said. An executive at DaimlerChrysler Co., which makes Dodge, didn't respond to calls requesting comment. The biggest gainer among car companies was Hyundai Motor Corp., which developed a reputation for shoddy, low-end cars during the late 1980s and early 1990s. Hyundai's satisfaction score jumped 6.6% in 2001, placing it near the luxury cars. The increase isn't a coincidence. Finbarr O'Neill, chief executive of Hyundai Motor America, says that early in the 1990s, Hyundai "didn't live up to the promise" of delivering cars on a par with Japan, but that is changing. In addition to improving car quality, Hyundai now bases performance bonuses for individual salesmen on how they rate in customer-satisfaction surveys. To create the American Customer Satisfaction Index, the National Quality Research Center at the University of Michigan in partnership with the American Society for Quality and the CFI Group of Ann Arbor, Mich., conduct telephone surveys with 12,500 current customers of the companies being surveyed that quarter. Each year, that amounts to about 65,000 customers of products from about 190 companies and 58 government agencies. Sales of the measured companies constitute 30% to 40% of the U.S. gross domestic product. Companies are scored on a scale of 0 to 100. Industry indexes are constructed with company indexes, weighted by the sales of each company. The national index is made up of the industry indexes, weighted by their contribution to GDP. Different sectors are updated each quarter, so the entire index is fully updated each year. Customers are quizzed about their expectations and their perceptions of value and quality in the services they have purchased; for manufactured goods, quality is broken down into measures of the product and the service accompanying the product. These are translated through computer models into overall customer-satisfaction scores, which are used to predict customer loyalty. American Customer Satisfaction Index![[Chart]](wsj_8_20_01_files/asci_chart08192001234814.gif)
The University of Michigan Business School's National Quality Research Center annually surveys customers of more than 190 companies and 58 government agencies, but each quarter it only updates selected industries. Here are the index scores, out of a possible 100, for the second quarter of 2001:
* a DaimlerChrysler company Write to Jon E. Hilsenrath at jon.hilsenrath@wsj.com and Joe Flint at http://interactive.wsj.com/fr/emailthis/joe.flint@wsj.com
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