Todd Hollander Market Research

Survey results published in the July 2007 issue of Consumer Reports reveal that compared to other industries, the airline industry’s average satisfaction score of 72 on a 100-point scale is better only than such perennials of customer dissatisfaction as wireless carriers, cable TV operators, and computer tech support.

Approximately 23,000 readers rated their experiences on a total of 31,455 U.S. domestic flights in the survey, conducted in February of 2007 by the Consumer Reports National Research Center. The survey questions covered ease of check-in, seating comfort, on-time performance, and in-flight service.

Among the 18 airlines rated, JetBlue, Midwest, and Southwest were rated the highest, while U.S. Airways, America West, and United were rated lowest.

This is good news for JetBlue, which suffered a highly publicized service fiasco earlier this year that resulted in CEO David Neeleman tapping into YouTube to apologize to customers (see “JetBlue CEO uses YouTube to address customer satisfaction nightmare,” Feb. 21, 2007).

The full list:

1. JetBlue

2. Midwest

3. Southwest

4. Frontier

5. Hawaiian

6. Aloha

7. Alaska

8. Spirit

9. Continental

10. AirTran

11. Delta

12. American

13. ATA

14. Northwest

15. American Eagle

16. United

17. America West

18. US Airways

The bottom line: Although the troubled airline industry is back in the black, many customers are still seeing red.

The July 2007 issue of Consumer Reports includes customer satisfaction ratings for 48 major hotel chains.

The survey, based on Consumer Reports National Research Center’s 2006 Annual Questionnaire, included ratings from almost 35,000 subscribers who spent more than 139,000 nights at 48 hotel chains. Among the survey findings:

• The fanciest hotels doled out fewer freebies. Sixty percent of high-end hotels charged for Internet connection, compared to 10 percent of budget hotels.
• Most budget hotels aren’t a bargain; the least expensive generally scored the lowest. Their guests were more likely to report getting a poor night’s sleep because of noise or a bad bed.
• More than 70 percent of readers who haggled scored a rate reduction or a room upgrade, especially if they negotiated face-to-face. While the safer choice would be to call ahead, survey respondents who arrived without reservations actually paid less than those who booked in advance.
• Although readers were generally satisfied with their hotel stays, at least 33 percent encountered at least one problem. Some chains drew far more complaints than others. Fifty-five percent of readers that stayed at Howard Johnson had one or more problems, compared to 16 percent at Homewood Suites.
• Among the five top complaints and the chief culprits overall: (In Alphabetical Order):
  • Unattractive Decor: Days Inn, Econo Lodge, Howard Johnson, Ramada, Travelodge
  • Poor Room Lighting: Clarion, Days Inn, Econo Lodge, Howard Johnson, Travelodge
  • Excessive Phone Charges: Hilton, Omni, Hyatt, Ritz-Carlton, Westin
  • Heating or A/C issues: Clarion, Days Inn, Howard Johnson, Red Roof Inn
  • Uncomfortable Bed: Days Inn, Econo Lodge, Howard Johnson, Ramada, Travelodge

The Best Hotels

Consumer Reports rated hotels based on five categories: Fanciest, Luxury, Upscale, Moderate, and Budget, as well as the typical nightly rate readers paid. Per category, the highest-rated choices are:

• Fanciest: Price between $130 and $350. Simply the best according to readers, the opulent Ritz-Carlton, which earned top marks for value, service, upkeep, and low reported problems.
• Luxury: Price between $89 and $218. Scores were consistently good with slight differences separating the best from the pack. Among the best: Renaissance, Embassy Suites, Westin, Marriott, Omni, and Hyatt. Upkeep and service scored generally high for this group.
• Upscale: Price between $70 and $235. CR readers found this group to provide the best bang for the buck. Homewood Suites and SpringHill Suites were among the best. Residence Inn by Marriott, an all-suite chain also scored well. Walt Disney Resorts in Orlando and in California offered stellar service.
• Moderate: Price between $58 and $100. Drury Inn/Suites, Hampton Inn and Wingate Inn were top choices in this category. The Drury Inn and Wingate Inn showed much better than average scores for value.
• Budget: Priced between $40 and $85. Microtel was the star of the budget bunch, scoring as well or better than more well-appointed chains. It typically builds new hotels rather than converting older properties from other brands.

Consumer Reports’ best hotels report including complete ratings for all 48 hotel chains and more advice for finding a great rate can be found in the July issue, available on newsstands June 5, 2007 or by visiting http://www.ConsumerReports.org.

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.