While traditional retailers see few gains in customer satisfaction for the holiday season 2014, one industry category manages an upswing: Internet retail. According to ACSI’s Retail Report 2014, customer satisfaction with department and discount stores stays flat, while specialty stores decline compared with the prior year. Yet consumers are more pleased overall with their online shopping experiences. The twist is that websites from brick-and-mortar competitors have a hand in the upswing.
Among the pure-play Internet companies in the ACSI study, nearly all show weaker satisfaction in 2014 compared to 2013. In contrast, the aggregate score for “all other” Web retailers—which includes smaller websites and the online channels of traditional stores—jumps 8% to an ACSI benchmark of 81 (0 to 100 scale). The small players’ positive momentum boosts the category average to 82, effectively recouping the large loss incurred in 2013 when bad weather caused a late-season shipping fail.
Coming into this season, both retailers and shippers were better prepared to avoid the prior year’s disappointments. Shipper UPS, however, may have over prepared. The company hired thousands of extra workers only to find that demand turned out to be lower than anticipated with the exception of peaks on Cyber Monday and December 22.
Yet, in spite of shipping successes, four big Web retailers show customer satisfaction declines: Amazon (-2%), Newegg (-2%), eBay (-1%), and Overstock (-3%). The only major player to gain in 2014 is Netflix, a company that is still in recovery mode following its severe decline in 2011, when consumers reacted to price hikes.
The upward ACSI path of Netflix since 2012 coincides with a quadrupling of its stock price and success with producing original content. While Netflix still falls short of its pre-2011 satisfaction level, it is again closing the gap to leader and streaming rival Amazon. With the streaming market poised to receive an influx of new players, some from the traditional TV business, neither company should rest on its past laurels when it comes to satisfying customers.
Posted in Results.
– April 8, 2015
By Claes Fornell
Despite a flurry of good economic news, the U.S. recovery, while better than just about any other country at the moment, will not gain much momentum unless there is a substantial increase in consumer demand.
Following the February jobs report, which showed better-than-expected employment growth, many economic commentators contend the economy is poised for sizable expansion in the near future, perhaps by as much as 4% or better.
The stock market seems to agree. Share prices fell on the news, fearing an increase in interest rates.
But neither is likely unless consumer spending strengthens substantially. In fact, spending growth probably needs to double in order for the economy to take off.
This is what the numbers indicate: Last year, consumer spending increased by 2.5% and GDP grew by 2.3%. In the late ’90s, when the economy last grew by 4%, consumer spending increased by more than 5% per year.
Since consumers represent about 70% of GDP, the arithmetic is straightforward: The economy cannot expand much without more consumer demand. Retail sales actually dropped in December and barely moved in January.
Why is consumer demand in short supply? The recession ended a long time ago. There are two main reasons: continued meager wage growth and a decline in buyer satisfaction.
Read ACSI Chairman and founder Claes Fornell’s perspective in Investor’s Business Daily »
Posted in Results.
– March 24, 2015
Based on consumer evaluations across various retail categories, Wal-Mart provides the least satisfying customer experience—three times over. According to the American Customer Satisfaction Index’s annual report on retail, Wal-Mart consistently ranks at the bottom among competing stores in three categories: department & discount stores, supermarkets, and drug stores. Compared with industry averages in these categories, the mega-retailer receives its best rating for groceries, but Wal-Mart’s customer satisfaction score of 71 (100-point scale) remains a far cry from the supermarket leaders: Trader Joe’s and Wegmans at 85.
The ACSI report is based on survey data collected in the critical fourth quarter of the year, which encompasses the holiday shopping season. The best of the best in 2014 includes upscale department store Nordstrom and perennial ACSI leader Amazon.com, which tops the Internet retail category at 86. But even among rivals on the discount side, Wal-Mart lags far behind. Target and Dollar Tree earn ACSI scores of 80 and 79, respectively, while Family Dollar and Dollar General tie at 75.
A year ago, Wal-Mart scored 71 in the department and discount store category, but now tumbles down 4% to 68—its lowest score since 2007. In the supermarket category, Wal-Mart’s customer satisfaction also declines, but by a scant 1%. 2014 marks Wal-Mart’s debut in ACSI’s drug store category. At 68, Wal-Mart’s pharmacy services are no more highly regarded than its overall merchandise or groceries.
This dismal customer satisfaction picture for Wal-Mart coincides with the company posting its weakest sales growth in five years. As reported by the Associated Press, Wal-Mart recently announced its intention to raise worker pay. While there is a connection between highly satisfied customers and happy employees, Wal-Mart clearly has a long way to go to reach a level of satisfaction that matches—let alone exceeds—retail sector averages.
24/7 Wall St.: Customer Satisfaction Lowest at Wal-Mart, Highest at Nordstrom and Amazon »
CBS MoneyWatch: Meet America’s Most Hated Retailer »
Marketplace Radio : Walmart’s way to growth »
MarketWatch: 4 Reasons Walmart is the Most-Hated Retailer in America »
Posted in Results.
– March 12, 2015
Just two years ago, customer service was a strong point for the U.S. federal government, with citizens giving the courtesy and helpfulness of staff a rating of 80 out of a possible 100 points. The American Customer Satisfaction Index—which applies the same rigorous, scientific methodology to measuring satisfaction with both private and public sector organizations—deems scores of 80 or above as excellent.
This once-excellent customer service has diminished since 2012, down 6% according to the ACSI’s annual report on citizen satisfaction with government, but without the benefit of other aspects of agency performance—such as the critical website channel—improving to anywhere near the 80 mark. In fact, website satisfaction has failed to improve at all—staying flat at a benchmark of 72 in 2014, or 3% below its 2012 level. Other aspects of the citizen experience have downgraded further. The process of applying for and receiving services falls to a low score of 68, while the clarity and accessibility of information provided by agencies drops to 69.
As in the private sector, customer service is often the first casualty of cost-cutting and poor service leads to less satisfaction. The overall score for citizen satisfaction with federal government is down for a second year, reaching a new low of 64.4.
The downturn in citizen satisfaction comes amid cutbacks in agency budgets and fewer federal workers. As reported in January, reduced funding for the IRS could mean longer wait times for callers this tax season, delays in refunds for paper filers, and perhaps even a total agency shutdown later in the year.
If cuts are going to be made to the people delivering the services, then part of the solution is paying more attention to websites. ACSI data show that citizens are much happier when services are offered electronically. In the case of the Internal Revenue Service, satisfaction is dramatically higher for taxpayers who file electronically (76) than for those who file on paper (56).
Read more »
Federal Computer Week: Satisfaction With Fed Customer Service Worst Ever »
The Washington Post, Federal Eye: Index Shows Americans Increasingly Unsatisfied
With Federal Services »
MarketWatch: Americans Hate the Federal Government Now More Than Ever »
Federal Times: Satisfaction With Agency Services Continues to Fall »
Posted in Results.
– March 4, 2015
Stalled out at a low customer satisfaction score of 69, Bank of America is the only big bank that still falls short of its prerecession satisfaction level, according to the American Customer Satisfaction Index’s 2014 results for commercial banks. For two decades, the ACSI has tracked customer satisfaction with checking, savings, and loan services for retail banks, many of which have undergone mergers. The research shows that smaller institutions consistently provide their customers with a much better experience than big banks.
Over the past 10 years, none of the measured banks come close to matching the numbers set down by the aggregate of all smaller banks, averaging 80 on ACSI’s 100-point scale. Since 2005, the highest score among the four banks is 76—earned in 2013 by JPMorgan Chase.
That said, the trend in 2014 is negative overall, as the industry retreats 2.6% driven by a 4% drop for smaller banks and a 3% decline for JPMorgan Chase. Citigroup, Wells Fargo, and Bank of America are unchanged compared with a year ago, but the lack of improvement for BoA keeps it well behind its rivals. And while most banks now match or exceed their prerecession ACSI scores, BoA remains 5% below its benchmark of 73 from 2008.
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MarketWatch: America Voted: This Is the Bank We Dislike Most »
The Charlotte Observer: Bank of America Continues to Lag Peers on Customer Satisfaction Scorecard »
Motley Fool: Believe It or Not, This Bank Has the Worst Reputation »
Posted in Results.
– February 10, 2015
For a second year, credit union members feel that they receive better service and more competitive interest rates than consumers who have accounts or personal loans through retail banks. ACSI’s annual study on financial services shows banks down 2.6% for customer satisfaction to score 76 on a 100-point scale. Meanwhile, credit unions—with membership now surpassing 100 million—are second best among all ACSI industries with a high benchmark of 85.
ACSI’s findings coincide with record-high fees for checking accounts, but banks are actually collecting fewer fees than ever before. Consumers are becoming more adept at avoiding extra charges, but another strategy may be avoiding the big banks altogether. While the structure of credit unions allows for fewer fees, CUs still provide superior service in nearly every area, from transaction speed to Web banking.
Indeed, consumers looking for free checking are much more likely to find it at a credit union. For interest rate competitiveness, customers put CUs ahead of banks by a wide margin of 13 points. The only areas where banks outpace credit unions are number and location of ATMs and branches. While this is not surprising given the more localized nature of credit unions, this may be an area that the industry could focus on improving, especially as membership continues to swell.
The Washington Post: Why Customers Are Less and Less Happy With Their Banks »
Denver Business Journal: Rising Fees Hurt Banks’ Image, but Consumers Happy With Credit Unions »
Albuquerque Business First: Study Finds Credit Unions First in Customer Satisfaction »
Credit Union Journal: CUs Still Enjoy High Customer Satisfaction: But Have Levels Peaked? »
Posted in Results.
– December 23, 2014
Few industries have offered less satisfaction to consumers over time than commercial airlines, but now health insurers find their policyholders nearly as disgruntled as air travelers in the American Customer Satisfaction Index’s annual study on Finance and Insurance industries. While subscription TV and Internet service providers earn the very lowest ratings among 43 industries in the Index, health insurers share a berth close to both airlines and social media among ACSI’s bottom five.
Among the three insurance categories in the study, health shows the biggest decline in policyholder satisfaction, down 4.1% to 70—the industry’s lowest ACSI score since 2005. The satisfaction history of health insurance, however, reveals a record of lower performance than other insurance types. Claims processes are more complex, but also more frequently used, which means there are more opportunities for things to go wrong. High premiums, along with deductibles and co-pays, may feel as hard on the wallets of consumers as shrinking legroom is on passengers’ knees.
But the adverse effect of higher cost on satisfaction this year stems primarily from employer-provided group policies, which are by far the industry’s largest segment. Satisfaction with group policies tumbles 7% to a very low benchmark of 67 whereas individual policies are unchanged at 74. If the industry were evaluated on group policies alone, customer satisfaction would dip below airlines.
Nearly every aspect of the customer experience for health insurance policyholders has deteriorated over the past year—several by 5% or more. Consumers are much less pleased with prescription drug coverage, as well as coverage of standard procedures. They find it more difficult to submit claims and are frustrated when dealing with call centers. While bright spots are access to primary and specialty care, the industry falls well short of the customer experience offered by other insurance types.
Download ACSI Finance and Insurance Report 2014 »
CBS MoneyWatch: Americans Put Health Insurers on the Hate List »
PropertyCasualty360: Report: Consumers Reasonably Satisfied With P&C Insurance;
Health, Not So Much »
Posted in Results.
– December 3, 2014
In a new twist this year for PCs, findings from the American Customer Satisfaction Index indicate that desktops have gained favor with users to the point that tablets no longer hold sway over the beleaguered desktop. According to the ACSI’s recent study on customer satisfaction with personal computers, tablets overall edge back 1% to an ACSI score of 80, while desktops surge 3% to 81, a healthy improvement over a year ago. Laptops, however, trail behind both—down 4% to a much lower benchmark of 76.
The ACSI results coincide with recent trends in the PC market—namely, a flattening in the decline of PC sales along with a slow down in tablet sales. Over several years, consumers poured money into tablets, but now the market is becoming saturated. Simultaneously, there has been an uptick in PC users who are entering the market to upgrade their older home desktops—some of whom were prompted by the end of Windows XP support in April.
Part of the picture may be that high consumer expectations for mobile devices make it challenging for manufacturers to satisfy users. In contrast, buyers looking to refresh home PCs—perhaps replacing desktops that are three years old or more—are pleasantly surprised by the speed and power of new machines on the market. Higher desktop satisfaction this year could be reflecting a modest ‘wow’ factor among consumers re-entering the PC market.
With regard to laptops, before tablets came on the scene, laptops received higher user satisfaction ratings than desktops because back then, the laptop was the tablet. But now, the laptop is orphaned, falling in the middle between the traditional set-up of a desktop and the ‘carry-everywhere’ tablet. For the industry, the next wave could come from products that bridge the gap by marrying the functionality of the desktop with the ease of use and portability of the tablet.
HotHardware: Desktop PCs Gain Traction in American Customer Satisfaction »
NBCNews: Desktop Computers Show a Gain in Customer Satisfaction »
NewsFactor Network: Consumers More Satisfied With Desktop PCs Than Laptops, Tablets »
PCMag: Consumers Love Their…Desktop PCs? »
Tech Times: Desktop Comeback on Horizon? It May Be So, Given User Satisfaction Report »
TWICE: As PC Demand Slips, Desktop Approvals Climb »
Posted in Results.
– October 20, 2014
In a year of waning overall driver satisfaction, Asian and European cars command the field, holding six of the seven top slots in the American Customer Satisfaction Index’s annual measure of the automobile industry. Only one domestic vehicle, GM’s Buick, earns an above-average score for customer satisfaction.
Driver penchant for imports is not new in ACSI studies. The year 2010 marked the first time in a decade that U.S. plates overall managed to edge out Asian brands for satisfaction. The brief stint for U.S. cars over Japan/Korea followed one year after the auto industry hit a record-high ACSI score of 84, as aggressive dealer incentives plus the government’s “Cash for Clunkers” program helped revive a recession-strapped industry. In 2012 autos hit 84 again, but since then driver satisfaction, on average, has waned.
For the last five years, European brands have held the high ground in ACSI. This year, Germany’s Mercedes-Benz leads the field at 86, helping Europe maintain the upper hand over Asian cars—but only by the slimmest of margins. With the entire industry trending downward, a less steep decline for Detroit’s Big Three works to narrow its gap to imports compared with a year ago.
With imports now in its sights, Detroit could be poised to catch up—and perhaps even surpass—both Asian and European brands for customer satisfaction, but this has yet to occur in two decades of ACSI measurement.
Download ACSI Automobile Report 2014 »
Automotive News: Asian, European Brands Dominate Satisfaction Survey, but U.S. Brands Close Gap »
Marketing Daily: Satisfaction Dips; Imports Vs. Domestics Gap Narrows »
Posted in Results.
– September 19, 2014
Drivers who opt for luxury are typically among the most satisfied, according to two decades of ACSI research on customer satisfaction with automobiles and light vehicles. When it comes to premium-priced vehicles, manufacturers strive to pair top-notch service with features aimed at comfort and luxury—all of which helps boost satisfaction.
ACSI findings for 2014, however, reveal widespread deterioration in driver satisfaction. Among 21 measured car brands, 80% show some decline in ACSI compared with the prior year. The two that take the hardest hit are both luxury makes: Acura and Cadillac. By contrast, Germany’s Mercedes-Benz still leads the field as it did in 2013, albeit at the lower ACSI score of 86, while GM’s Buick is one of only two nameplates to post a gain (+1% to 83).
With a sharp drop of 7%, Honda’s Acura tumbles down to last place for 2014. In its second year of measurement, Acura scores 77, down from 83 a year ago. Another luxury newcomer to ACSI, Audi, inhabits the low end with a debut score of 79.
Cadillac, GM’s flagship luxury make, plunges 6% to 80, failing to score above average for the first time in ACSI history. The drop in customer satisfaction for Cadillac coincides with news that the brand’s August year-on-year sales in the U.S. are down 18%, in sharp contrast to the industry’s overall gain of 5.5%.
View more automobile scores »
AutoGuide: Mercedes, Subaru Top Customer Satisfaction Survey »
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The Wall Street Journal: Automotive Customer Satisfaction Dips for Second Straight Year »
Posted in Results.
– September 12, 2014