Customer Satisfaction Index Still Trending Downward

Personal Care Brands at Record High; Apparel Category Sags

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CHICAGO ( -- Consumer satisfaction with brands is deteriorating, according to the University of Michigan's American Customer Satisfaction Index -- bad news for tough economic times.

Though the falloff was small -- 0.1% during the third quarter measured by the study -- the larger trend began in 2007, and Claes Fornell, index founder and author of "The Satisfied Customer," said that "for individual companies, customer satisfaction actually matters even more in a recession." He added, "Now is the time to make sure customers don't leave and that margins don't evaporate. Firms without strongly satisfied customers will face a very difficult challenge."

Overall customer satisfaction was 75. The index is scored from 1 to 100, with any score above 80 considered superior. Manufactured goods tend to have a higher overall score because they lack a service component. Of the four industries surveyed in the third quarter, personal care and cleaning products remained at 85, a record high; food edged up 3% to 83; apparel fell 2% to 80; and athletic shoes stayed at 79. The overall satisfaction composite is lower because it reflects other industries not highlighted in this report, like personal computers, airlines and hotels.

Apparel downturn
During the third quarter, nearly every apparel brand surveyed either declined or stayed the same. Jones Apparel was a rare exception, up 4% to 84. Otherwise, Hanes brands fell 2% to 80, Levi Strauss dropped 3% to 78, and Liz Claiborne remained unchanged at 79.

Clorox, Unilever and Colgate-Palmolive are at the top of personal care and cleaning, at 87. Heinz led the "food companies" category, which excludes fast food, with an 89. Quaker Oats, 87, and Mars, 86, were close behind. Campbell Soup fell the furthest, to an 80, which researchers attributed to the company's price increases during the quarter, rather a perceived drop in quality.

In athletic shoes, Nike jumped up 4% to 78, which was largely attributed to its iPod partnership. Adidas also scored a 78, after years of enjoying a sizable lead over Nike. "Nike's strategy of product innovation and expanding its current market into other demographics by launching new, more affordable lines appears to be paying off," Mr. Fornell said. "Improved customer satisfaction has also contributed to higher revenues for Nike."

New Balance and Skechers led the athletic-shoe category, however, both with a score of 82.
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