Online vs brick-and-mortar: How purchase-channel differences impact customer loyalty

Experts predicted high holiday sales — the best in years — and big-box retailers … missed the mark. This happened despite more retailers than ever concentrating on e-commerce to capitalize on predictions that consumers would spend more than ever online.

So, what happened? Part of the problem could be that retailers invested in the wrong aspects of their customers’ online and brick-and-mortar shopping experiences, unintentionally hurting customer satisfaction and the likelihood a customer will repurchase.

Specific aspects of customer satisfaction matter more or less depending on where customers shop, and because better customer satisfaction leads to increased customer loyalty, retail executives who don’t understand these differences can miss opportunities to maximize their sales. Knowing how best to cultivate customer satisfaction in a multichannel marketplace is an important competitive advantage, especially for executives planning new campaigns that span online and offline channels. Strengthening customer loyalty can help companies expand their market share.

Previously, there had been little research verifying these differences, but we recently dove into our data and uncovered a few key differences in how customer satisfaction is generated in online and offline purchase channels.

One chance to get it right with online shoppers

To start, we found that customers are more sensitive to their satisfaction when shopping online. What do we mean by that? The likelihood a customer will never purchase a product again or will switch retailers following a single unsatisfactory brand experience is much higher online than offline.

This comes down to convenience. With virtually unlimited retailers at an online shopper’s fingertips, it doesn’t cost them much to switch to a competing brand. But the same customer might need to drive 15 minutes out of their way to find a brick-and-mortar substitute — something they might not be willing or able to do.

Moreover, while customer satisfaction can drop for any number of reasons, our research found that perceived value (a measure of quality relative to price paid) drives customer satisfaction more online than in person. This too is unsurprising, given that e-commerce has played a large role in driving down prices across the retail world.

Perceived value is impacted not only by the product’s quality, but also by any extra costs associated with the purchase, if a promotion is running on the product, if it was easy to find and purchase the product, how quickly the product will be delivered (if shopping online), and more. Because it’s easier for customers to conduct price and quality comparisons online than offline, customers hone in on and develop perceived value more so online than they do in stores.

To build customer satisfaction through perceived value, online retailers should have more efficient websites than their competitors, offer easier access to purchase and search history, and provide more product details, photos, and videos.

Online retailers can’t ignore other factors influencing customer satisfaction either, such as overall quality and expectations. By improving each part of the customer’s experience, online retailers can combat the hair-trigger tendencies e-commerce customers have to switch retailers.

Overall quality and customer expectations key for brick-and-mortar stores

Meanwhile, our data show that the customer satisfaction of offline customers is driven more strongly driven by overall quality and expectations. In brick-and-mortar stores, quality products and customer expectations are key to customer satisfaction. The advantage traditional retailers have is two-fold: face-to-face human interaction and a perceived reduction in shopping risk.

When interacting with an in-store sales representative, customers can ask every question they have and receive trustworthy answers in response. Customers can also handle the product they intend to purchase, receiving tactile feedback about its quality.

This finding validates current recommended practices to enhance customer experiences: Create a pressure-free environment to interact with high-quality products, and ensure knowledgeable staff is on hand. Additionally, offline retailers need to focus on sharing reliable product information and maintaining a trustworthy image.

However, brick-and-mortar retailers won’t be able to attract digital shoppers and compete with their online competitors just by focusing on these areas. Keeping in mind online shoppers’ emphasis on perceived value, brick-and-mortar stores must devise a way to one-up online competitors in this regard. That could start with more competitive pricing, though executives should be wary not to fall into the trap of price cutting.

Overall, retailers can develop better customer experiences and drive more purchasing by customizing their approaches to online and offline purchase channels. Even though retail executives face mounting pressure to consolidate channels and adopt omnichannel strategies, they can’t lose sight of the differences as they head into 2019. If they do, online and offline executives alike risk hurting customer satisfaction and losing out on market share because of decreased customer loyalty and repurchase intent.

The above findings generally persist across customer demographics and retail categories. For exceptions, details on methodology, and more results from the research, read the full paper in the Journal of Retailing.

Dip in federal government satisfaction is not just a ‘now’ problem

U.S. federal government services experienced a drop in customer satisfaction for the first time in two years, dipping 1.1 percent to an ACSI score of 68.9 (out of 100), per our latest Federal Government Report.

While this downturn is not a result of the government shutdown, make no mistake: The longest shutdown in U.S. history – at 35 days – has left an indelible mark on the American people – and not in a good way.

President Trump signed a bill to reopen the government for three weeks. However, the Feb. 15 deadline is going to be here before you know it, and the fear of another potential shutdown is most certainly on the minds of the 800,000 federal employees who returned to work on Jan. 28. But it won’t just be those federal workers feeling the impact.

The millions of everyday citizens that interact with the nine federal departments and agencies that closed their doors during the shutdown felt the effects too. And while data collection for our 2018 report ended before the shutdown began, we can expect the effects to be reflected in the satisfaction marks come 2019.

That doesn’t necessarily bode well for the federal government.

What did the government shutdown impact?

Thirty-five days doesn’t seem like much in the grand scheme of things. But a lot can happen in that time.

Thanks to The New York Times’ government shutdown timeline, we have a running list of what took place between Dec. 22 and Jan. 25. Without getting into everything, it’s clear the effects of the shutdown are far-reaching, extending well beyond those experienced by federal government employees.

For example, the Department of Interior scored a 78 in our latest report. This ties for the highest among federal departments. However, national parks fall under Interior, and the shutdown has not been kind to these landmarks.

We’ve seen injuries at places like Big Bend National Park, where a man fell and broke his leg. He was carried to safety by fellow park visitors and a park ranger, but the park had limited rescue services because of the shutdown. Other services, like road maintenance and trash pickup, were suspended by the National Park Service back on Dec. 30, creating unsafe, unsanitary, and unpleasant conditions.

During the shutdown, the Smithsonian museums and the National Zoo were closed. As was the National Gallery of Art. And then, of course, there are the airports.

Many Transportation Security Administration (TSA) workers and controllers began calling in sick instead of working without pay. At best, the disruption caused inconveniences like longer lines at security checkpoints; worst, it caused chaos and safety violations. Miami International Airport closed a terminal on Jan. 12 because it didn’t have enough security screeners. On Jan. 25, New York’s La Guardia Airport ceased allowing inbound flights due to delays, causing air travel congestion along the Eastern Seaboard. And on Jan. 2, a passenger flew from Atlanta to Tokyo with a handgun.

These are merely some of the incidents that took place during the shutdown. And just because the government is back open – at least for the next three weeks – most people aren’t simply going to forgive and forget all the turbulence, especially with the lingering ramifications.

Future costs of the shutdown

The shutdown is over for now. The consequences of that shutdown, however, will be long-lasting.

The National Taxpayer Advocate, a government watchdog group, told House staffers that the Internal Revenue Service (IRS) will likely need 12 to 18 months to recover from the shutdown.

The IRS has millions of unanswered taxpayer questions to deal with. It needs to hire thousands of employees for this tax filing season, and it needs to make up lost time when it comes to training workers. But the IRS is just one department that’s feeling the pressure.

The Bureau of Indian Affairs needs to issue grants to prevent food shortages and a health care crisis, and the National Park Service has an amenities problem on its hand. This is likely only the beginning.

The federal government shutdown cost the economy $11 billion, according to the Congressional Budget Office. Most of that loss will be recouped once the shutdown ends and folks return to work, but the CBO estimates that $3 billion is “permanently lost.”

Although our 2018 report was not influenced by the shutdown itself, satisfaction in the federal government was already heading south. Even with the government back up and running (for now, anyway), it’s almost impossible to look at all that’s happened without expecting a lingering ripple effect throughout the rest of 2019.

Think you know your customer? Maybe not.

Every manager knows that happy customers mean better business. But despite decades of in-depth research, elaborate customer satisfaction monitoring systems, and extensive customer service support teams, managers still struggle to understand their customers’ desires and needs, leading them to make misguided decisions that can hurt their business.

From misinterpreting data to undervaluing what drives purchasing decisions, our research shows managers get more wrong about customers than they get right.

Managers think they know their customers

Managers might want to think twice about how well they understand their customer. Even some highly confident managers don’t understand all the levels and drivers of customer satisfaction.

In the aggregate and on average, the managers we surveyed significantly underestimated their customer’s propensity to complain, and thereby failed to address the customer’s complaints. Additionally, they overestimate their customers’ satisfaction and loyalty while misunderstanding what drives both customer expectations and perceptions of value.

With the importance most companies place on customer feedback, how can these misunderstandings be so widespread? Managers should look to the type of feedback they’re measuring, to start. Not all feedback is useful (no matter how pretty those 5 stars on Yelp appear).

For example, what does having a high average review score tell you about your customer? Many managers make the mistake of blissfully accepting a positive review, but either don’t take the time or don’t have the data to understand why the customer gave them a particular rating. When implementing customer feedback monitoring systems, managers should emphasize specifically catered feedback that will provide relevant insights into their product and service decisions.

The data has the answers, but you still don’t

Implementing a customer satisfaction monitoring system – such as market research or consumer data collection and analysis — to evaluate customer feedback and communicate the data throughout the organization is a solid first step in understanding customer satisfaction and motivations. However, for many organizations, these systems often don’t live up to their potential. There are two reasons for this:

  1. Some managers aren’t exposed to the data these systems collect.
  2. Some managers receive the data, but they misinterpret and misunderstand it.

Both cases result in frustrated customers, falsely confident managers, and ultimately, the loss of business. Monitoring systems only work if managers have access and training to accurately interpret the data.

Additionally, to extract all the benefits from monitoring systems, managers should inspect the current extent and nature of their customer perception level to help minimize any manager-customer disconnects. This baseline will uncover the holes in understanding and facilitate more informed decisions to close them.

Once managers understand where lapses in data and interpretation are occurring, they can take corrective actions that make sense for their business, and ultimately, for their customers.

Going beyond what the customer wants

Understanding what your customer wants is the first step, but to truly bridge the gap in manager-customer misunderstanding, managers need to take it a step further. Beyond what your customer wants, why do they want what they do?

In many oversaturated and competitive markets, like retail, simply knowing what your customer wants isn’t enough anymore. There are five, 10, even 100 other firms selling the same exact product or service for a better price. And yet, the more expensive option might sell better and produce more satisfied customers.

Why? Lower prices are not the deciding factor in winning over the customer. Instead, quality drives customer satisfaction and loyalty, along with perceived value and customer expectations. So before scrambling to stay competitive in the short-term by reducing prices, managers need to take the time to find out why the customer feedback says what it says.

Learn from Netflix’s mistake. In 2011, Netflix CEO Reed Hastings pushed for a premature split between hard copy DVDs and the company’s new streaming service — a move that resulted in 800,000 fewer subscribers and more than a 25 percent stock plummet. The split not only divided customers, but required them to pay for both services separately. Turns out, the new business model combined with the price increase was enough to warrant a “no” from the “Are you still watching?” prompt.

Hastings apologized a few weeks later, admitting he was overconfident in the push to streaming and assumed that the divide had already been presented to customers via feedback platforms (clearly, it had not), and that the price increase wouldn’t come with backlash (wrong again).

Following this misinterpretation, Hastings made a swift recovery by focusing on why the remaining customers were interested in streaming services over DVDs, leading to an amazing comeback in 2012 that’s held up through today.

Making the change

Winning over customers is about more than implementing fancy monitoring systems and simply relying on the data without context; it’s also about understanding the customer’s desires and needs, and — as a manager — checking your ego at the door.

With the plethora of data available today, it’s easy to misinterpret information and direct precious resources to well-intentioned but needless tasks. To avoid making this mistake, it’s time for managers to reassess data, determine key drivers of customer satisfaction as well as complaints, and fix gaps in interpretation and information sharing. If managers make the effort now, they’ll have happier customers — and better bottom lines — in the long run.

Mobile apps help drive satisfaction with insurance and investment services

Every year we take stock of customer satisfaction in the financial and insurance sector. In recent years, we’ve noted digitalization is driving the success of retail banks, and technological advancements are improving satisfaction across the sector. Our latest report supports those points.

In particular, mobile apps – which we measured for the first time this year — are improving customer satisfaction even as other online resources, like websites, dip within the sector.

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Based on our 2018 finance and insurance report, here are a few ways mobile apps are already contributing to the finance and insurance sector’s success.

Nationwide most improved among insurers, thanks to cutting-edge mobile app

In early 2018, Nationwide became the first company to enhance its mobile capabilities with a new blockchain framework. Designed specifically for the risk management and insurance industry, the framework enables Nationwide to offer customers real-time policy verification and eliminates the need for hard-copy documentation—streamlining a historically cumbersome process.

The app, which also allows consumers to start and process claims from their mobile devices, scored exceptionally high marks in customer satisfaction in 2018 and propelled Nationwide’s 5 percent gain in overall satisfaction, which is the largest improvement by any property and casualty insurer this year.

Industry-wide, the quality and reliability of mobile apps, which can be used to pull up policies, document accidents, and easily reference claims, rank near the top of all benchmarks measured. Customers give mobile app quality an ACSI score of 87 and the reliability of mobile apps, defined by minimal downtime, crashes, and lags, an 85.

Life insurance leads in mobile app satisfaction

Life insurers are getting creative with mobile options, too. For instance, John Hancock has developed a program, available via its app, that encourages policyholders to be more proactive with their health. For every 10 workouts they record, policyholders earn the chance to spin a wheel of fortune in their mobile app and accrue points they can redeem for gift cards. These incentives are improving customer engagement, experience, and satisfaction.

Across all insurance industries ACSI measures, life insurance scores highest for both quality (90) and reliability (89) of mobile apps. Driven in part by these scores, satisfaction for the industry rises 2.6 percent to an ACSI score of 80.

The flip side: Technical glitches hurt satisfaction

While some companies are satisfying customers with mobile options, other companies can’t seem to master the basics. Vanguard, the previous customer satisfaction leader in the investment services industry, is one example. The company drops 4 percent to a score of 79 following system issues like phone and website connection problems that left customers fuming, as well as automated texts that incorrectly stated loans were being processed.

Vanguard’s technological hiccups weren’t enough to bring down the industry as a whole however. Reliability and quality of mobile apps (both 82) top the charts and life insurers continue to hold steady at a score of 79.

Digital technologies make strides

Mobile is high on customers’ priority lists, and with a few exceptions, insurance and investment companies are delivering. As our data shows, those companies investing in their customers’ digital experience and expectations are reaping the rewards in terms of customer satisfaction.

It’s a digital world, and whether policyholders are looking to file insurance claims or make changes to their investments, companies would do well to meet the demands of the on-the-go customer.

Health insurance continues to cause headaches for customers

There’s a correlation between lower customer satisfaction and the frequency of use or touchpoints with a product or service. The more often you interact with a specific product or service, the greater the chances that something is going to go wrong.

Few things encapsulate this concept more than customer satisfaction – or lack thereof – in health insurance.

Following two years of growth, customer satisfaction with health insurance is unchanged with an ACSI score of 73 (out of 100), according to our most recent Finance and Insurance Report. In fact, as it turns out, health insurance is far and away the least satisfying category in the entire sector.

Trending in the wrong direction

Humana and Kaiser Permanente continue to lead all insurance companies in customer satisfaction with an ACSI score of 78. Policyholders note that Humana has better access to primary and specialty care, while Kaiser Permanente offers the best prescription coverage and is the fastest to process claims. But these few positive marks aren’t enough to keep customers happy — both insurers fall 1 percent over last year

This downward trend plays out across much of the industry. Blue Cross and Blue Shield falls 1 percent to an industry-low 70, and “all others” also dip 1 percent to an ACSI score of 74. Only Cigna and Aetna saw gains in customer satisfaction. Meanwhile UnitedHealth stayed put with an ACSI score of 73.

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The industry as a whole saw no change in customer satisfaction in areas such prescription drug coverage, ease of submitting claims, the speed with which claims are processed, and access to specialty care.

A bright spot for insurers

The overall complicated nature and complexities of health insurance, makes it much more difficult to provide excellent customer satisfaction. Yet, some insurers are finding success, specifically through consolidation.

The only companies that experienced improvement in customer satisfaction also happened to be the only companies in the midst of separate mergers and acquisitions. Aetna, up 1 percent to 75, is in the midst of merging with CVS, and Cigna, up a staggering 11 percent to 73, is in the process of purchasing Express Scripts.

As a whole, the health insurance industry has seen customers more satisfied with access to primary care doctors and coverage of standard medical services.

Where health insurance can improve

The health insurance industry doesn’t have the best reputation. From the logistics of using it to questions surrounding what (or who) is covered, health insurance is known for causing ample amounts of unwanted stress.

Insurers would be wise to make it easier for customers to understand information on insurance statements, which ranks at 74. And most notably, companies need to improve the entire experience of interacting with a call center. This area sees the largest dip in customer satisfaction, dropping 5 percent to an ACSI score of 71.

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Health insurance is in the bottom 10 of all the industries we measure, but it doesn’t have to be that way. By simplifying the process, ensuring access to physicians, and upgrading websites, insurers can create a more seamless, satisfying experience and ultimately improve their long-term relationships with customers.

Beer lovers love their beer more than ever before

The beer industry is at a crossroads of sorts. Millennials just aren’t that into beer. According to a report from Berenberg Research, Generation Z feels the same way, opting instead to reach for spirits. As a result, beer consumption and sales are down. This, however, is only part of the story.

Beer might not be the libation of choice for everyone, but for those that do choose brew, one word best describes their feelings toward the beverage: Love.

According to our most recent Nondurable Products Report, customer satisfaction with breweries is at an all-time high, climbing 1.2 percent to an ACSI score of 85 (on a scale of 0 to 100). Interestingly enough, it’s the “little” guys leading the charge among beer aficionados.

Smaller breweries, big-time satisfaction

Beer lovers are a passionate bunch. And craft beer drinkers might be the most passionate of them all. With a 1 percent jump over the past year, small breweries and craft beers, which the ACSI categorizes under “other breweries,” have the highest customer satisfaction among industry manufacturers, with an ACSI score of 86.

This group also leads the competition in many other aspects of customer experience, including perceived overall quality and perceived value. It’s clear that while the microbrews and small breweries lack the size of the big brands, they’re benefiting from the strong reputation they’ve built with their customer base.

Competition is good for the beer market

Competition tends to breed competition. We’re seeing the positive effects that “other breweries” are having on the rest of the category, generally propelling higher satisfaction across the entire market. This is most notable in the higher customer satisfaction with Anheuser-Busch InBev.

The megabrewery is up 1 percent in customer satisfaction year over year, giving it an ACSI score of 85, good enough for second place in the category. Anheuser-Busch InBev is thriving because of high marks in website satisfaction, customer retention, and most importantly, customer loyalty.

Bottom of the barrel

Although breweries have high marks in customer satisfaction overall, not every manufacturer is improving. Molson Coors saw its customer satisfaction take a major dip, plummeting 4 percent to a score of 81.

In fact, following a 4.8 percent dip in first quarter 2018 sales, the megabrewery opted to cease production on its MillerCoors line of Two Hats, essentially giving up on the brand that was intended to appeal to the millennial crowd. The manufacturer hopes to rebound by turning its attention to Coors Light.

The future of the beer industry

Microbrews and craft beers aren’t a fad. These “other breweries” have a loyal following, and its customers are drawn to a quality product. Inauthenticity isn’t going to fly with this crowd. Hopefully, the bigger beer manufacturers take note, and make the necessary adjustments to keep up with beer lovers’ preferences.

Regardless of what the future holds, one thing is clear: customer satisfaction with breweries is the highest we’ve ever seen. We can all agree to raise a glass to that.

Amazon bites into Apple’s control in the PC market

If it feels like everyone is on their smartphone these days, it’s because they probably are.

Consumers are now using their mobile devices to complete tasks – such as web browsing, banking, shopping, entertainment, etc. – that were once reserved for computers. However, if you were under the impression customers would abandon personal computers (PCs) merely because of overall satisfaction with their phones, you’d be sorely mistaken.

According to our latest Household and Electronics Report, customer satisfaction with PCs remained stable at 77 (on a scale of 0 to 100).

Interestingly enough, in an industry consisting of desktops, tablets, and laptops, it’s the desktops that garner the most love among consumers (up 4 percent to 83), followed by tablets (up 4 percent to 80) and laptops (down 3 percent to 75).

Of course, when you take a closer look at individual PC makers, the picture becomes even clearer.

These brands are riding high

Any way you slice it, the story remains the same: Apple leads all PC makers in customer satisfaction. The brand has an ASCI score of 83 and has the highest marks in almost every aspect of customer experience, including features, apps, and design. Clearly, customers remain drawn to the clean, sleek look and feel of Apple products.

But Apple isn’t running away with the show.

After a 4 percent spike this year, Amazon leaps into a tie for second place at 82. You can chalk up Amazon’s rise to the strength of its tablet. Users give it high marks for design, sounds and graphics quality, and ease of operation.

Samsung joined Amazon with an ASCI score of 82, the same mark from a year ago. However, while customer satisfaction with Samsung remains high, it trails its competitors in most key features, including operating system, preloaded apps, and data storage.

These brands are playing catch up

While Amazon’s PCs are satisfying customers, other big-name brands are trending in the wrong direction. Which brings us to Dell and Toshiba, two companies that have a lot of work to do.

When your processor speed is an issue and your machines consistently experience system crashes, you’re going to struggle to win over the masses. These are the problems Toshiba faces, as it experienced a 5 percent drop — the largest among PC makers — to an ASCI score of 71. This is Toshiba’s lowest score to date, and unfortunately it’s not the only company that’s failing to impress consumers.

Dell is down 4 percent year over year to an ASCI score of 73. This is partially because where companies like Apple thrive from a design standpoint, Dell is struggling to keep up with competition. If this doesn’t change, Dell might have difficulty digging itself out of its current hole.

What PC customers want

Desktops continue to serve as the preferred devices of business users and gamers who require power and functionality. And with the gaming industry reaching broader popularity than ever before, it’s hard to imagine desktops ever becoming completely unnecessary.

Unfortunately, over the last year, the PC industry as a whole has experienced a decline in customer satisfaction in key areas. For example, customers care about the product’s design, where the ACSI score has dropped to 82. They care about accessories, software and apps, and graphics and sound quality, but customer satisfaction in all three categories has fallen to 80. Systems crashes have become more of a problem (down to 77), features aren’t exciting customers as much (down to 77), and processor speed has slowed, resulting in a 3 percent drop in the ASCI score to 76.

Worst of all, customer service took big hits. Website satisfaction dropped 5 percent to 78 while the accessibility and reliance of call centers suffered a staggering slump down 14 percent to 67.

There is a silver lining. Although most aspects of the PC industry have taken hits in the eyes of its consumers, these are still high marks overall. PCs continue to cater to specific use cases that phones aren’t yet capable of handling.

But if PC manufacturers hope to regain any of the ground they’ve lost in recent years, it’ll take more than just a better call center experience to satisfy customers’ needs.

Forget millennials. Here’s the generation most impacting your bottom line

By this time next year, Generation Z will outnumber millennials globally, accounting for nearly 32 percent of the population. While millennials have recently been in the spotlight for having unreasonable expectations and supposedly “killing” industries, it’s consumers born after 2000 that are likely to have more of an impact soon.

With the oldest members (ages 18-20) of this massive generation now in the market as consumers, there a few things companies should keep in mind as they try to woo this digital-savvy demographic.

Be prepared for a harsh critic

Younger consumers have never had a reputation for being particularly optimistic when it comes to satisfaction. Gen Z customers appear to be overwhelmingly negative in their response to new products and services; in fact, almost every variable the ACSI measured in 2017, including loyalty and perceptions of quality, proved Gen Z ranked the lowest.

Most notably, these young consumers were 10 percent less satisfied than the Silent Generation, and 4 percent less satisfied than millennials, who have a reputation for being critical consumers. To overcome this trend, companies will need to work harder to prove the worth of their products and services over competitors’ offerings to young shoppers. Growing up with digital conveniences like Amazon and phones that also function as wallets has fostered higher expectations for convenience and value among Gen Z.

Customers that don’t know how to properly complain

Aside from the general negativity associated with Gen Z consumers, an underlying problem is that these consumers often don’t productively complain about their dissatisfaction. Our data consistently shows customers who complain to the provider of a product or service generally have a better experience, in part because they have an opportunity to see the issue resolved and also because they feel their issues are being heard.

Yet, instead of calling or emailing customer service, Gen Z tends to take to social media to express their frustrations. This becomes problematic when consumers tweet or post without tagging or messaging the company directly. Not all corporate structures have the resources to search for and respond to indirect customer complaints on social media. As a result, they have fewer opportunities to address the customer’s experience directly, salvage customer satisfaction, win back the customer’s loyalty, or manage their reputation. Customers, in turn, miss out on a chance for resolution.

For example, earlier this year 20-year-old celebrity Kylie Jenner complained about the newest Snapchat update to her 25.4 million Twitter followers, many of whom belong to Gen Z. The tweet received over 73,000 retweets and 5,000 replies, many of which conveyed the tweeter’s plans to delete Snapchat altogether or to stick to other social platforms until an update was made. In the aftermath of Jenner’s post, Snapchat, Inc. lost $1.3 billion of its market value.

While a single tweet from a celebrity isn’t typically enough to influence satisfaction overall (and we can’t say Jenner’s tweet was solely responsible for Snapchat, Inc.’s stock plummet), the example shows the impact Gen Z could have on company bottom lines.

A problematic generation, or a problematic age?

Before companies across the country redirect their concern over the impact of millennials toward Gen Z, they should think back to being an 18-year-old shopper. The “problem” with 18-20-year-old consumers may not be that they belong to a digital generation raised with more conveniences, but instead that they’re too young to be a well-informed buyer. Perhaps it’s time to consider that this might happen again … and again and again, as each new generation reaches the early stages of adulthood.

Members of the Silent Generation and Baby Boomers tend to be the most satisfied customers because they’ve spent years shopping, which has shaped them into a much wiser customer than they may have been in their late teens and early 20s. More practice in purchasing leads to better habits, including research before buying, which ultimately leads to a higher level of customer satisfaction. They also tend to have more disposable income and therefore less stress associated with each purchase, whereas younger consumers with less income may be more significantly impacted by their purchasing decisions, and could be more critical of companies because of that added burden.

The fact that Gen Z ranks the lowest in satisfaction should still be taken as a warning sign for companies. But before scrambling to please the youngest consumers entering the market time and time again, it’s worth considering that the real answer to achieving satisfaction in the younger generations might be to give them some time.

Consumers have problems with the auto industry but a recall isn’t one

Automakers recalled vehicles by the millions in the past year.

For the second time in the U.S., Kia issued a recall of over 342,300 Soul vehicles because of a steering flaw, and back in March, Ford announced a massive safety recall of 2014 through 2018 models of Ford Fusions and Lincoln MKZ cars built in Michigan and Mexico. More than 1.3 million Ford vehicles were recalled because of the risk that steering wheels could detach from the steering column. According to Ford, two accidents and one injury have been linked to the problem.

While the number of recalled vehicles remains high, at least it’s steady, according to drivers. Per the ACSI’s 2018 Automobile Report, the proportion of drivers who experienced recalls hasn’t changed over the past year.

What’s surprising, however, is the effect these recalls are having, or rather, not having, on customer satisfaction.

How do vehicle recalls affect customer satisfaction?

According to ACSI data, customer satisfaction among drivers who had a recalled vehicle is only moderately lower than individuals who didn’t have a recall (80 to 81, on a scale of 1 to 100). On top of that, the data for Ford’s Lincoln shows that customers with a recalled vehicle actually reported higher satisfaction than the ones without a recall.

What can we attribute this odd behavior to? For one, the automobile industry has been doing a better job of handling recalls. Automakers have become more efficient in their recall process, using a more proactive approach to the problem, as opposed to a reactive one. But most importantly, automakers are owning up to their mistakes. ACSI’s latest recall data shows this level of honesty goes a long way with car owners.

This isn’t to say that all car manufacturers are benefiting from a more understanding clientele. Mercedes-Benz, for one, hasn’t been quiet on the recall front, and it’s paid the price. The company recently recalled nearly 500,000 cars because of possible accidental airbag deployment and nearly 43,000 Smart cars because of the risk of engine fires, among others. These incidents have contributed to Mercedes-Benz’s customer satisfaction score falling 2 percent to 82 this year.

Areas of improvement for the driving experience

So, if recalls aren’t causing a blatant negative impact among car owners, then what is? The answer: gas mileage and warranties. It doesn’t matter if an individual owns a mass-market vehicle or a luxury automobile, these two areas really grind customers’ gears.

Among mass-market vehicles, gas mileage is the worst part of the customer experience, though its score rose 1 percent to 79. Warranties are second from the bottom, holding steady at 80. Among luxury vehicles, gas mileage fell 1 percent to 77, while warranties retreated 1 percent to 82.

However, this isn’t the case across the board. Volkswagen, one of the most improved mass-market cars with a 4 percent increase in driver satisfaction, has shown it’s listening to consumers when it comes to warranties and gas mileage. The automaker has doubled the length of its warranties and drivers say that the fuel economy of Volkswagen vehicles is now among the best in the industry.

Despite these areas for improvement, automobiles continue to rank high in customer satisfaction among the 46 industries ACSI measures on an annual basis. Making changes for better warranties and gas mileage could be enough to bring the automotive industry up to the top of the list in the near future.

How rising summer gas prices will change consumer spending habits

The weeks between Memorial Day and Labor Day are the busiest American travel days of the year. This summer, drivers are paying 60 cents more per gallon of gas than they were last year, and airline fuel prices are up 12 percent, with higher fares on the horizon. But the higher costs don’t seem to be stopping vacationers from hitting the road… or the sky.

In fact, airlines are expecting their busiest travel season ever, with an estimated 246.1 million passengers expected to fly between June 1 and August 31. And according to a National Association of Convenience Stores survey, even more vacationers, especially millennials, will travel by car than by plane.

With gas prices demanding more from Americans’ pockets, consumers will have to find room elsewhere in their budgets to keep their wheels turning and their vacation plans intact. For other retailers, that means doubling down on customer satisfaction to make sure their goods or services aren’t the ones to get cut.

Reprioritizing spending habits

Americans spend more than half their food budget on dining out, making it perhaps one of the easiest expenses to cut back on in order to fund those summer travel plans. This is especially true for millennials, who on average eat out a whopping five times per week, spending more on dining out ($92 billion in 2016) and on comforts and conveniences (like pricey coffee) than other generations.

There’s been a lot of fuss over the past several years, too, about the brand loyalty of these young consumers. And it’s at least in part for good reason. Consider 2017 data from all of the ACSI’s private sector industries, which found millennials are least loyal in 39 percent of the industries measured, with the highest loyalty intention score in just 13 percent of industries (perhaps not surprisingly, tech and personal computers). It’s worth noting, though, Gen X isn’t that far off – they’re least loyal in 42 percent of industries and considered to be the most loyal in just one (computer software).

This brand apathy could prove dangerous for the coffeehouses, restaurants, and bars that typically benefit from millennials’ dining out tendencies, particularly when they’ve got bigger, more expensive purchases on their minds.

Satisfaction gains power as gas prices rise

People are going to spend money wherever they’ll be the most satisfied and get the most enjoyable experience for their dollar. Quality plays a more important role than price in satisfying customers in almost all ACSI-measured industries. But the ultimate millennial craving can’t be satisfied with good food. Convenience continues to be the most important factor in attracting millennial customers across all industries.

That means that those restaurants (and other retailers) that cater to the expectations of these fast-moving, technologically savvy 20-and-30-somethings will have a better chance of staying in favor. Online ordering and payments and fast delivery or curbside pickup make it easier for consumers to buy (and be satisfied), while things like personalized discounts or offers based on purchase history will keep brands top of mind.

Those brands with the highest customer satisfaction scores are likely already doing these things well and may not have to fear a millennial shift in purchasing habits this summer. But those with below average satisfaction should take note and bolster efforts to improve the quality of interactions with customers.

The high cost of fuel this summer might not be enough for millennials to cancel their vacations, so something else will have to give. Restaurants and other “comfort” brands that fail to deliver the quality or convenience shoppers need could be the first to go.