University of Michigan's Fornell

As last year ended, customer satisfaction with overall goods and services dropped, with retail companies falling last year compared to 2006. The University of Michigan-produced American Customer Satisfaction Index (ACSI) found that retailers ended the year with a rating of 74.2 on a scale of 100, down from 74.4 in 2006. The best-performing retailers, both with scores of 83, were Barnes & Noble and Publix Supermarkets. The Home Depot was at the list’s bottom, with a 67, while Wal-Mart was slightly above at 68. Supermarkets were the highest-scoring sector, hitting a 76 and advancing three years in a row, while department and discount stores were the lowest, at 73. Michigan business professor Claes Fornell, who is head of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference , spoke with GlobeSt.com about the index.

GlobeSt.com: Is there a correlation between a consumer’s satisfaction with a retailer, and that company’s financial health?

Fornell: If there was no relationship between how a company treated its customers and its financial health, then there is really something wrong with the marketplace. There has to be a relationship, and as a matter of fact, there is. They’re not parallel because the satisfaction, dissatisfaction or change in it, comes first. Then the company that really satisfies its customers to an appropriate degree – you can go too far if it costs too much – in general will see a financial benefit in doing so. And if you treat your customers badly, you get punished. We have found that in recent years, the punishment is tough. You get punished twice. First you get punished by defecting customers, and second, you get punished by investors who withdraw their capital, so the share price goes down as well.