Todd Hollander Market Research

The latest data by the University of Michigan’s American Customer Satisfaction Index (ACSI) shows that customer satisfaction with the goods and services Americans buy continues to improve, but at a slower rate.

In the first quarter of 2007 the ACSI rose 0.4% to an overall score of 75.2 (on a 100-point scale).

Although this is the highest quarterly national average in the ACSI’s 14-year history, the rate has slowed and many of the companies included in the index appear to be falling behind. Despite the slightly higher aggregate score, at the individual company level the ACSI revealed more drops than gains in satisfaction.

“In addition to the large number of decliners, the rate of improvement in satisfaction has slowed,” said Professor Claes Fornell, director of the University of Michigan’s National Quality Research Center, which compiles and analyzes the ACSI data. “Companies don’t have much pricing power unless there is shrinking supply or higher customer satisfaction. There are no signs of the former in most industries, so the latter becomes more critical. Companies may begin to see narrowing profit margins unless there is further improvement in customer satisfaction.”

The bottom line: Even companies with relatively high customer satisfaction must find new ways to improve customer perceptions to avoid erosion of profit margins.

This entry was posted on Wednesday, May 16th, 2007 at 2:17 pm and is filed under Customer Satisfaction. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.