Tech companies crash in consumer perception poll

ROCHESTER, NY: Computer companies enjoyed six years at the top of Harris Interactive's annual poll of public perception of consumer-related industries.

ROCHESTER, NY: Computer companies enjoyed six years at the top of Harris Interactive's annual poll of public perception of consumer-related industries.

Judging from this year's results, those days may be over.

No industry fared particularly well in the survey compared to last year, with many of the biggest gainers still languishing at the bottom of the table. The firm asked 1,026 adults one basic question on their perceptions of different service industries: "Do you think (this industry) does a good or bad job serving the consumer?"

Airlines improved 12% from their dismal rating last year of only 51% of respondents thinking they serve their customers well. But the industry is still far from its high of 78% in 1998.

"The airlines were coming from such a low point a year ago, said David Krane, Harris' SVP of public policy research. "Many people think the industry was doing badly after September 11, but the truth was it was doing badly before that. They may take some consolation from this, but shouldn't think the worst is over."

Computer hardware and computer software companies, which are rated in two different categories, dropped a full 20% and 21% respectively, trailing behind banks, hospitals, and airlines.

One possibility for this drop is that layoffs in the technology sector have had a negative impact on service.

Christopher Foss, associate director of the Reputation Institute, said that these results are consistent with his organization's own industry analysis.

"We've seen, for instance, the decline in reputations among companies in the tech sector - which is understandable given the absurd overvaluations of some of these companies before the bubble burst and stock prices plummeted, he said. "To the extent that the Harris Poll results reflect content or discontent with the level of industry service, I can understand the apparent disenchantment with the computer industry."

Foss continued, "Service is the weakest area for this sector, and these low ratings will remind this industry that it has got to be far more responsive to consumers' needs."

Banks topped the table for the first time, with 74% of respondents saying they thought banks take care of their customers well.

"The fact that banks' service was rated highly is somewhat surprising in the wake of the recent investment-banking scandals, Foss said. "I do think that many banks have shifted strategy in the past year. In an economic downturn, banks tend to readjust their sights away from investment revenues and focus instead on volume business on the retail side. Apparently, this strategy is meeting with approval from customers."

Krane said that the survey is getting more than the usual amount of attention this year from the media. This is not surprising, given the litany of scandals that have engulfed companies from Enron to WorldCom. "We think this question is almost an emotional gauge of how people think these markets are doing, he said. "We think companies have been paying closer attention to their reputation in the past 12 months."

INDUSTRY APPROVAL BY CONSUMERS
BUSINESSES                2002        2001      2001-2002      1997-2002
                           (%)         (%)            (%)            (%)
Banks                       74          71             3              -1
Hospitals                   73          67             6              -4
Car manufacturers           64          67             -3             -6
Airlines                    63          51             12           -15*
Computer software           60          80            -20            -20
Computer hardware           59          78            -19            -21
Pharma and drugs            59          57             2             -20
Telephone                   58          61             -3            -22
Life insurance              55          60             -5             -9
Health insurance            51          38             13             -4
Oil                         38          27             11            -21
Managed care                33          29             4             -18
Tobacco                     25          28             -3             -9

* Airlines were not included in 1997, so the trend for airlines is from
1998-2002.
SOURCE: Harris Interactive poll.

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