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American customer satisfaction declined in the second quarter of 2008 and continues on a bumpy path with no momentum, according to (PDF) the American Customer Satisfaction Index (ACSI) from the University of Michigan’s National Quality Research Center.

After a small uptick last quarter, ACSI slipped 0.1% to 75.1 on a 100-point scale. These results suggest that consumer spending will remain weak with no more than 2.3% growth in the third quarter.

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Among individual companies and industries, Google surged in the improving internet portals/search engines category, while Apple performed well among otherwise-slumping personal computer manufacturers.

In the highly rated automobile industry, American automakers significantly trailed foreign competitors. Whirlpool also dropped in rankings in the declining appliance industry.

Internet Portals & Search Engines

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Customer satisfaction with the internet search engine/portal category of websites rose 6% to an all-time high of 79.3, largely on the strong improvement of Google, according to the ACSI.

After slipping behind Yahoo for the first time last year, Google surged 10%. Google’s score of 86 sets a new standard for e-businesses and creates a nine-point gap between its nearest competitor, Yahoo, which fell 3% to 77.

Personal Computers

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The personal computer industry suffered a second consecutive drop in satisfaction, falling 1% to 74 and losing all gains made since 2005.

Apple defied the industry by moving in the opposite direction and posting its largest gain ever to 85, a new all-time industry high. The 8% leap puts Apple 10 points ahead of its nearest rival.

The industry aggregate decline was largely among makers of Windows-based machines. Hewlett-Packard (73), Gateway (72), and Compaq (70) each declined 4%. Dell was up 1% to 75.

Automobiles

Customer satisfaction for the automobile industry as a whole remained at an all-time high (unchanged at 82), and one American car maker, GM’s Saturn, showed considerable improvement (up 5%). However, US auto manufacturers – hit with record losses – are plagued by slumping customer satisfaction. No domestic car maker scored among the top four in the industry, but the bottom three are all American brands.

  • Lexus and BMW lead all auto manufacturers with scores of 87.
  • Toyota and Honda each improved 2% to 86.
  • Mercedes Benz, once No. 1 in customer satisfaction, continued to fall behind the leading car makers and has seen slow, steady erosion to around the industry average.
  • Chevrolet, GM’s best-selling brand, took the biggest fall to 79, losing 4%. Chrysler’s Dodge (-3% to 78) and Jeep (+1% to 76) anchored the bottom of the industry list.

“The problem for domestic companies is that they now lag further behind their foreign counterparts,” said Professor Claes Fornell, head of the ACSI at the University of Michigan. “This is not going to be helpful as the Big Three will lose more pricing power and be forced to continue dependence on rebates and discounting in a market where consumer preferences keep shifting away from domestic cars.”

Major Appliances

Customer satisfaction with major appliances slid 3% to 80 this quarter. All three major companies declined, with Whirlpool dropping the most (-5% to 80). General Electric and Electrolux each dropped 1% to 80. Whirlpool, the world’s biggest appliance manufacturer, faces increased competition at a time when domestic demand is shrinking and the cost of shipping and raw materials is rising, according to ACSI

“The American consumer has long been the single biggest force propping up the US and the global economy,” said Fornell. “But declining customer satisfaction combined with weaker demand for US exports may make it difficult for American households to shoulder the burden of being the locomotive for world economic growth.”

About the research: The American Customer Satisfaction Index is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. It is updated each quarter with new measures for different sectors of the economy. The overall ACSI score for a given quarter factors in scores from about 200 companies in 44 industries and from government agencies. Data for ACSI are collected at the individual customer level, with scores for a company’s customers aggregated to produce company-level results. Scores for each industry consist of an average of its companies’ scores, weighted by the revenues of each company.

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