Nowadays, Customers Care About Value
What's most important to consumers these days? Value. That's the loud-and-clear message of the latest University of Michigan's American Customer Satisfaction Index.
It's no surprise that Southwest is the favorite airline of consumers; it has long been so thanks to its low-fare, fun, can-do attitude. But what is surprising is T-Mobile's ranking: it joins Verizon at the top of the wireless firms this year; last year it was near the bottom. The reason, the index says, is that T-Mobile has focused its recent strategies around competitive pricing; as a result, consumers see "better value for the money."
Consumer satisfaction for cable/satellite TV companies, the lowest-rated industry this quarter, also has improved. That uptick is a bit odd, the survey notes, because "there is no evidence that service quality has improved or that prices have come down." So what's driving those results? "The likely explanation lies in the industry's 'price bundling' of services" such as the Internet, telephone and cable TV into one price package. "Since there are often price discounts associated with bundling, customers appear to view these offerings in a positive light."
The index, which measures consumer satisfaction in different industries every quarter (so each industry is rated once a year), rated cable TV, airlines, wireless telephone, hotels and mail service this quarter. The index reflects Americans' overall level of satisfaction with the goods and services they purchase.
Here are some of its specific findings:
* Overall, customer satisfaction is up--with the official index at 74.1, up from 73.5 last quarter.
* Consumers are growing even more unhappy with the airlines (is that possible?), with the overall score for the entire industry at 65, down a point from last year. While the favorite remains Southwest, with a rating of 74, the worst is Northwest, which posted a score of 61, down from 64 a year ago. US Airways, which just merged with America West, has only a slightly better score of 62--but that's a five-point improvement over 2005.
* With a score of 86, FedEx has highest rating of all companies; at 83, United Parcel Service is not far behind. By contrast, the U.S. Postal Service's express and priority mail posted a score of 75; for all of its mail service, it earned 71 points.
* Consumer satisfaction with the wireless industry improved nearly 5 percent this year, to a score of 66. T-Mobile and Verizon tied at 69, while Cingular Wireless and Sprint Nextel both received the lowest ratings, 63.
* As a group, cable and satellite TV received the lowest rating of any industry this quarter, with an overall score of 63. The best performers were the satellite TV companies: DirecTV andEchoStar, while the traditional cable companies were far below.
May 16, 2006; 10:00 AM ET
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