Customer Satisfaction Up Thanks To Lower Prices, Not Increased Quality

The first quarter results for the much-watched American Customer Satisfaction Index were released today. While satisfaction us up .40% from last quarter, a high, it belies a sluggishness in product and service quality. Instead, the ACSI finds the increased satisfaction is due to lower prices. Professor Claes Fornell writes:

But if the increase in quality is minor and ACSI growth is driven mostly by lower prices, or an absence of price increases, satisfaction becomes vulnerable to more volatility because prices change much quicker than quality…. Pricing power depends on upward shifting demand curves. But an upward shift is unlikely unless there is shrinking supply or higher levels of buyer satisfaction. There are no signs of the former in most industries, so the latter becomes more critical.

Good product quality and customer service and starting to look like a savvy business decision yet? — BEN POPKEN

ACSI Quarter Commentaries Q1 2007 [ACSI]
ACSI Quarterly Scores [ACSI]
Most And Least Improved Companies In Customer Satisfaction Since 1994
Customer Satisfaction Winners And Losers