Todd Hollander Market Research

Benjamin Moore Paints received the highest customer satisfaction ratings in the J.D. Power and Associates 2007 Interior Paint Satisfaction Study(SM).

Benjamin Moore ranked highest with a score of 805 on a 1,000-point scale. Duron (788) and BEHR (786) were the next highest rated paints.

The study found that customers regard application performance (quality of coverage, paint flow and leveling, and level of fumes/odor) as the most important factors in driving satisfaction with interior paint. According to the study, customers pay an average of $21 per gallon for interior paint.

The study was based on responses from 7,440 respondents who purchased and applied interior paint within the previous 12 months.

   Overall Customer Satisfaction with Interior Paint
   (Based on a 1,000-point scale)

   Benjamin Moore Paints         805
   Duron Paints                  788
   BEHR Paints                   786
   American Tradition Paints     779
   Industry Average              779
   Dutch Boy                     777
   Ralph Lauren Paints           776
   Sherwin-Williams              776
   Sears                         775
   Dunn-Edwards                  774
   Pittsburgh Paints             772
   Valspar Paints                772
   KILZ Paints                   770
   Kelly-Moore                   768
   Glidden                       759

The results of J.D. Power and Associates’ 2007 Major Home Improvement Retail Store Satisfaction Study(SM) show that Ace Hardware has the highest customer satisfaction ratings among Home Improvement Retailers.

The inaugural study was based on responses from 16,239 consumers who purchased a home improvement product or service in the previous 12 months from a store that sells home improvement products. The study measured customer satisfaction on six metrics:

• Sales staff
• Merchandise and services
• Store facility
• Price competitiveness
• Sales/promotions
• Checkout

“Home improvement retail stores typically have a wide array of product offerings, which could be overwhelming to shoppers, especially those seeking support for do-it-yourself projects,” said Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates. “Many of these retailers tout the quality of their customer service in slogans and advertising, but the study tells us that those companies that truly ‘walk the talk’ differentiate themselves and demonstrate notably higher customer satisfaction.”

Among major retailers, Ace Hardware ranked highest with an overall satisfaction score of 812 on a 1,000-point scale, followed by Menards (801) and Lowe’s (798). The Home Depot (757) scored below the industry average of 773 points.

According to the report, customers reported spending an average of $2,138 per year on home improvement products. Ace was rated particularly high for sales staff, store facility, and checkout. Menards performed well on price competitiveness and sales/promotions, and Lowe’s scored well on merchandise.

Overall Customer Satisfaction with Major Home Improvement Retail Stores
(Based on a 1,000-point scale)

Ace Hardware 812
Menards 801
Lowe’s 798
Costco 784
True Value 776
Industry Average 773
The Home Depot 757
Target 757
Sears 756
Wal-Mart 721
Kmart 693

Netflix, QVC.com and Amazon received the highest customer satisfaction ratings in the most recent Top 100 Online Retail Satisfaction Index released from ForeSee Results.

As a category, retailers selling books, CDs, and DVDs tended to score best overall, while the categories of apparel & accessory retailers and computer/electronics retailers generally performed below average.

The report is based on over 20,000 surveys of consumers who visited the top 100 revenue-grossing retail websites in the Internet Retailer Top 500 Guide. Using the methodology of the University of Michigan�s American Customer Satisfaction Index (ACSI), the study measured how well the top retail websites delivered the kind of site experience customers desire. The websites included in the index spanned a variety of categories including Apparel & Accessories, Books/CDs/DVDs, Computers/Electronics, Flowers/Gifts, Food/Drug, Hardware/Home Improvement, Health/Beauty, Jewelry, Mass Merchants, Office Supplies, Specialty Retailers, Sporting Goods and Toys/Hobbies.

Among the findings:

• Netflix.com and QVC.com were tied for the highest satisfaction score of 85 on a 100-point scale. Other customer favorites include Amazon.com (83), Barnes & Nobleâ��s website, BN.com (82), DrsFosterSmith.com (81), LLBean.com (79) and Apple.com (79).
• The lowest scorers included PCMall.com and PCConnection.com, each with a score of 67.
• Books/CDs/DVDs was the highest-scoring category.
• Nordstrom.com (73) received the best score among high end retailers. NeimanMarcus.com (69) had the biggest drop in the Index, declining 9% from a year ago.
• JCPenney.com (76), Target.com (76), and Walmart.com (75) led department store retailers.
• LLBean.com (79), shoe-retailer Zappos.com (79), and VictoriasSecret.com (77) led the apparel and accessories category.
• Apple.com (79), TigerDirect.com (79), Dell.com (78), and Newegg.com (78) led the computer and electronics category.
• Price may be less important than some e-retailers think. According to the report, â��for the vast majority of retail websites, investing in site experience improvements or brand will have a bigger positive impact on the bottom line than trying to drive demand by dropping the price.â��
• Customer satisfaction was shown to drive loyalty, positive word of mouth, ROI, and future financial performance. The study also found a high correlation between customer satisfaction and customersâ�� propensity to choose a particular retailer.

�It�s impressive that some retailers� satisfaction scores for browsers are so high,� said Larry Freed, President and CEO of ForeSee Results. �We expect purchaser satisfaction of the leaders to be high, but high browser satisfaction scores represent the strong positive contribution of the online shopping experience that has been difficult to quantify though other metrics. It�s also notable that while some of the biggest online retailers achieved high satisfaction scores, size doesn�t necessarily equate with high satisfaction. There are a number of smaller niche retailers that are rated in the top tier by online shoppers.�

�Lower scoring retailers shouldn�t be discouraged, since they have the greatest opportunity to improve the website shopping experience and they are still ranked among the top 100 retailers in terms of online sales,� said Freed. �By increasing online customer satisfaction, these retailers will see a profound impact on financial performance.�

Cellular handsets from Motorola and SANYO were rated highest for customer satisfaction in the 2007 U.S. Wireless Mobile Phone Evaluation Study^SM from J.D. Power and Associates. Kyocera and Audiovox phones were rated lowest.

The study, based on experiences reported by 21,520 wireless users who have owned their current mobile phone for less than two years, measured customer satisfaction with wireless handsets by examining five key factors:

• Physical design
• Operation
• Features
• Handset durability
• Battery function

Motorola performed particularly well on physical design, operation and features, while SANYO received high ratings for operation and battery functionality.

Overall satisfaction with the retail banking experience has increased considerably since 2006, according to the J.D. Power and Associates 2007 Retail Banking Satisfaction Study^SM.

Since 2006, the overall satisfaction index has risen 22 index points to 763 on a 1,000-point scale. Greater satisfaction with fees, convenience and transaction methods appear to be driving the upswing.

“Customers provided three primary reasons for selecting a bank—good reputation, free services and convenient location,” said Jeff Taylor, senior director of the banking practice at J.D. Power and Associates. “Reputation, which is supported by recommendations and positive word of mouth, was the reason cited most often for choosing a bank.”

The 2007 Retail Banking Satisfaction Study is based on responses from 20,898 households regarding their experiences with their primary banking provider. The analysis was based on six factors: transactions, account initiation/product offerings, account statements, convenience, fees and problem resolution. The results by region were:

Mid-Atlantic Region

1. Commerce Bancorp (828)
2. Community Bank (808)
3. Washington Mutual (786)

Midwest Region

1. Washington Mutual (802)
2. Marshall & Ilsley Bank (762)
3. Comerica Bank (760)

Southeast Region

1. Bank of America (784 )
2. Wachovia (780)
3. First Tennessee (773)

Southwest Region

1. Woodforest National (790)
2. Wachovia (774)
3. Washington Mutual (762)

West/Pacific Region

1. Washington Mutual (774)
2. Bank of the West (763)

“With nearly 85 percent of customers still doing some of their banking at a branch, regional leaders have done particularly well in offering more convenient hours of operation and branch locations,” said Taylor. “While larger banks are certainly making strides in enhancing the retail banking experience, community banks and credit unions are still strong players, as they generally provide shorter in-person transaction times, fewer out-of-service ATMs, and shorter wait and transaction times when customers speak to a live telephone operator. However, community banks and credit unions tend to struggle with convenience, so increasing satisfaction within this area is surely one way for larger banks to remain competitive in the market.”

The bottom line: With large banks focused primarily on convenience and price, small banks and credit unions can compete by providing a superior customer experience.

The latest data by the University of Michigan’s American Customer Satisfaction Index (ACSI) show the perennially low-scoring cable and satellite TV industry had the lowest level of customer satisfaction among all industries measured.

As a whole, the industry dropped 2% to a score of 62 out of a possible 100 points with not a single provider managing to increase its year-over-year customer satisfaction score.

The direct-broadcast satellite companies continued to outscore any of the cable providers in the study, with DirecTV more highly ranked than EchoStar’s Dish Network. But satisfaction scores dropped for each of the providers this quarter: DirecTV’s score dropped 5.6% from the same period last year, while Dish’s fell 1.5% for the same period.

Among cable television providers, Comcast dropped 7% to 56 and Time Warner Cable went down 5% to 58.

The bottom line: Pay television providers are doing a very poor job of satisfying customers.

The latest data by the University of Michigan’s American Customer Satisfaction Index (ACSI) show that customer satisfaction with the wireless industry is at an all-time high but still ranks well below the satisfaction scores of other industries.

For the first quarter of 2007 the rating for the industry as a whole was at an all-time high, up 3% to a score of 68 out of a possible 100. However, even with this second straight gain, wireless service remains one of the five lowest scoring industries in the ACSI.

Verizon Wireless (71) and T-Mobile (70) showed gains of 3% and 1%, respectively. AT&T Mobility, the new incarnation of Cingular Wireless, posted a big increase, up 8% to 68. However, the ACSI scores show that some wireless providers experienced declines in customer satisfaction. Most notably, Sprint Nextel fell well behind the competition (seven points behind the nearest competitor), with a score of 61, a 3% drop from 2006.

The bottom line: Some wireless providers have increased their levels of customer satisfaction, but even industry leaders have a long way to go to catch up with the customer satisfaction scores of other industries.

The latest data by the University of Michigan’s American Customer Satisfaction Index (ACSI) show that customer satisfaction with Microsoft fell during the past year. This is the second year the ACSI has measured Microsoft and the broader computer software industry.

For the first quarter of this year the rating for the industry as a whole was down one point from the first quarter of 2006, scoring 73 out of a possible 100 points. For Microsoft, the customer satisfaction rating declined from 73 to 70.

This rating placed the software giant below top-rated FedEx (84), Olive Garden (80), Starbucks (78) the U.S. Postal Service (77) and about 40 other companies. Consumers were more satisfied with Microsoft than with broadcast TV news (67), the newspaper industry (66), airlines (63) and cable television providers (56).

“A year ago, the world’s leading software producer was even with the rest of the industry; now it is behind in customer satisfaction,” wrote the index’s publishers. “Much of this seems to have to do with its new operating system, Windows Vista, and the new Office Suite which were both released in January.”

The bottom line: Microsoft’s new Vista operating system and Office suite of business applications appear to be having a negative effect on customer satisfaction.

The latest data by the University of Michigan’s American Customer Satisfaction Index (ACSI) show that in the first quarter of 2007 Marriott Corporation achieved an increase in customer satisfaction of 5% to 79 out of a possible 100 points- its best score since 1994.

Claes Fornell, director of the University of Michigan’s National Quality Research Center, which compiles and analyzes the ACSI data, attributed Marriott’s high score to recent improvements to its properties, including renovations to its Courtyard and Residence Inn locations.

“The hotel has begun adding LCD televisions to many of its rooms, and has spent almost $200 million on better sheets and tops for its beds,” said Fornell. “These improvements show up in Marriott’s ACSI data, and are major contributors to the gain in satisfaction. While the hotel’s guests consider value for money about the same as last year, they deem the quality of Marriott’s services to be significantly improved.”

Meanwhile, customer satisfaction for the hotel industry as a whole fell in the first quarter of 2007, due largely to a decline among smaller hotel chains. The overall industry rating fell 5% to 71 out of a possible 100 points, its lowest score since 2002.

The bottom line: Marriott has bucked the trend of decreasing satisfaction among hotel guests. Competitors should take notice.

The latest data from the University of Michigan’s American Customer Satisfaction Index (ACSI) confirms what airline passengers already knows: air travel stinks!

Since the first ACSI survey was completed in 1994, customer satisfaction with the airline industry has declined 13% to a score of 63 out of a possible 100 points. That’s lower than the U.S. Postal Service. It is even lower than the Internal Revenue Service! In fact, of the nearly 50 industries included in the index, only one fared worse than airlines: the cable and satellite TV industry.

The largest declines in year-over-year customer satisfaction were for United (-11%) and Delta (-8%). The only increases in the industry were for Southwest (+3%) Continental (+3%), and the “all others” category that includes the smaller carriers (+1%).

These ratings underscore two points I have made in recent postings:

1. Airlines are simply incapable of delivering a satisfying customer experience (”Can Airlines Deliver Customer Satisfaction? Not a Chance!” March 26, 2007).
2. Therefore, they should stop promising one (”Should airlines stop promising customer satisfaction?” April 4, 2007).

It is interesting to note that for the airlines, none of this really matters much. Even though air travel is an inherently dissatisfying experience, there is no practical alternative for long-distance travel. Therefore, as long as safety is not in serious doubt, consumers will continue to purchase airline tickets, regardless of how much they might dislike the experience.

The bottom line: On average, consumers find air travel more unpleasant than filing taxes. However, like death and taxes, flying is unavoidable.