In search of satisfaction

Projections about the well-being of the US economy often include measures of consumer confidence: Are Americans more or less likely to buy a refrigerator, for example, compared with last year?

Survey results have fluctuated for months.

Yet for the past six months families have been far clearer, and decidedly negative, in responding to a related question: Are they happy with the purchase?

According to a University of Michigan survey, consumer satisfaction is declining across the country as Americans flinch at rising costs and deteriorating service in a number of industries.

The flash points:

* Utility companies, which drew the ire of consumers upset with rocketing natural-gas and electricity costs.

* Airlines, which have struggled with labor strikes and outmoded air-traffic-control systems to accommodate a growing number of passengers.

* The US Postal Service, which continues to raise stamp prices and might soon discontinue Saturday delivery.

Despite record prices at the box office (many theaters now charge $8 and up per ticket), the motion-picture industry was the only category that registered an uptick in customer satisfaction, as measured by an ongoing University of Michigan poll (see charts).

Overall, the figures should spark concern among American companies, according to the study's director, Claes Fornell.

"Customer satisfaction says something about the inclination about repeat purchases," says Mr. Fornell. "And those purchases account for about 80 percent of revenue for these industries."

The decline isn't unprecedented. Customer satisfaction sank between 1994 and 1997 as retailers and service industries were slow to anticipate the expanding economy and rising consumer demand, Fornell says.

But the current drop-off might be rooted elsewhere.

"What we are seeing is a reaction to budget cuts from the slower economy," says Fornell. "They're affecting the quality of front-line service personnel."

Elaine Berke approaches the problem from a different perspective. As a consultant who helps companies bolster customer satisfaction, she has seen corporate attitudes toward their regular customers shift drastically in the past decade.

Only 62 percent of company managers currently describe their corporate culture as "service driven," according to a study conducted by Ms. Berke's Westport, Mass.-based firm, EBI Consulting. It's a low number, given the high percentage of corporate goals pledging reverence for the customer.

The cause: Companies define customer service more in terms of technology and corporate efficiency than person-to-person interaction, says Berke.

"Improving the experience that customers have isn't foremost in the minds of corporate leaders," she says. "They want to know how to cut costs, speed up procedures, and shorten phone calls."

Despite companies' increasing preference for technology over the human touch, customers' satisfaction with tech businesses is surging, according to customer-research firm NFO Prognostics in San Jose, Calif.

Fornell, a professor at Michigan's business school, isn't surprised, since e-commerce companies in particular must do business with an added burden.

"Since they are coming in as a new entity, they have to be better," says Fornell. "In order to replace something, you need to do customer service better than the standard."

(c) Copyright 2001. The Christian Science Monitor