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

/ Forrest Morgeson / Leave a comment

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

/ David VanAmburg / Leave a comment

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

/ David VanAmburg / Leave a comment

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.

You thought Facebook’s privacy was bad? Its amount of ads is even worse.

/ David VanAmburg / Leave a comment

Facebook has spent much of 2018 on the defensive.

The revelation that Cambridge Analytica had mined millions of users’ personal data set off a wave of fury and a call to #DeleteFacebook.

The company’s struggles to contain misinformation, fake profiles and organizations, and other ill-intentioned uses of its platform – and what it plans to do about them – have kept it in the spotlight as bad news piles up.

It’s no wonder that Facebook’s ACSI score dropped 1 percent to a 67 this year, perilously close to the bottom of the industry. According to users, Facebook has by far the worst privacy protection in social media.

But despite the media focus, privacy protection isn’t Facebook’s only problem. Users also said the company’s navigation and video speed is poor and its content is stale. Its advertising is the most intrusive of any social media site by a wide margin, users say.

What’s interesting is that users gave Facebook’s amount of advertising a lower score than its privacy protections.

That mirrors a trend across the entire social media industry. What’s worse? Lack of privacy protection or too much advertising?

How other social networks fared in privacy and advertising

Some of Facebook’s woes extend across the entire social media industry. Social networks’ ability to protect privacy declined for the second year in a row to tie its all-time low of 71.

But the customer experience factor that social media users were least satisfied with is the amount of ads. This measure dropped 1 percent year over year to an all-time low of 68.

The scores for those particular factors shaped satisfaction for the highest and lowest-scored social media sites.

The top ACSI scores in social media this year belong to Pinterest (80), Google+ (79), and Wikipedia (77). All scored well in privacy protection and amount of advertising.

Pinterest and Google+ tied for the best privacy protection in the industry, with a score of 78. Users rated Pinterest’s advertising on par with Wikipedia, which has no ads, while Google+ received the best customer satisfaction score for its amount of advertising.

Facebook did not have the lowest ACSI score among social media companies; its 67 narrowly beat out LinkedIn and Twitter, which tied for last place with a score of 66.

In terms of privacy, Twitter and LinkedIn join Facebook at the bottom of the heap, with LinkedIn narrowly in front of Twitter, but trailing all other social networks. Facebook was in last place by a wide margin, sinking to a 61 for privacy.

Users ranked Twitter above average for its amount of advertising, while LinkedIn is in second-to-last place, beating only Facebook, which again trails by a significant margin at a score of 59.

Why users are less satisfied with advertising than lack of privacy protections

Privacy protections are certainly a concern, and their return to their all-time low shows that users care about how social media companies guard their data.

But privacy concerns are often in the back of users’ minds, stirred up only when a breach or violation of that privacy occurs.

Advertising, however, is in users’ face every time they log on. It seems that some of the biggest social media companies are still working out ways to seamlessly integrate advertising and find the right balance of advertising and content.

While most consumers are used to commercials interrupting TV shows or radio broadcasts, it seems they’re still unsatisfied being inundated with ads while looking at pictures of their grandkids or sitting through a commercial before a YouTube video.

That Facebook, the largest social network by monthly active users, reflects these problems more vividly in its scores and recent controversies makes sense. What remains to be seen is if it can dig itself out of this hole and find a path to better customer satisfaction.

How millennials are reshaping the restaurant industry

/ David VanAmburg

Millennials spend more on dining out than any other demographic, to the tune of $92 billion in 2016. That number is only expected to grow as their earnings increase.

So it’s no surprise that millennial tastes are reshaping restaurants, from the food they serve to the way it’s ordered. That means food trending toward natural, organic, and plant-based. Some 40 percent of millennials are reportedly taking on a plant-based diet.

While millennials eat out, they also like to order in, prompting technological changes in how restaurants take orders, accept payments, and design their websites and mobile apps.

Restaurants’ ability to meet new preferences and expectations in the last year has had a significant effect on their ACSI scores. After a drop last year, full-service restaurants rose 3.8 percent to 81. Fast food edged up 1.3 percent to 80.

But where the improvements—and the need for improvement—are most obvious is in the ACSI scores for every element of customer satisfaction.

What restaurants are getting right?

Full-service, sit-down restaurants have improved across nearly all aspects of the customer experience.

Food order accuracy remains a strong point with a score of 89, up 2 percent year over year. Restaurant staff are more courteous and helpful—another 2 percent gain to 87.

Food quality (up 4 percent to 87) and food variety (up 4 percent to 86) show strong gains in areas that cater to millennial preferences for fresh, quality ingredients and customization. Beverage quality (86) and variety (83) are also much improved this year.

Full-service restaurant layout and cleanliness rates well at 86 and continues to exceed the fast food industry (84).

Fast food restaurants are right behind the full-service category in highly accurate order fulfillment, rising 1 percent year over year to 88. It remains by far the top-rated aspect of the fast food experience. Staff do a good job of serving customers (85) and food quality rose 1 percent to 85.

The element that improves the most is also the fast food industry’s reason for being: speed of check-out or delivery. Service speed is up 2 percent to 84.

Where restaurants have room to improve

Food-to-table service from full-service restaurants is quicker (up 2 percent to 83), but lags fast food check-out and delivery speed (84).

The only element to weaken for the full-service category is website satisfaction (83). This should alarm restaurants as online ordering continues to gain traction with customers and off-premise dining becomes more critical for boosting sales.

Unlike the full-service segment, fast food beverage quality has not improved (84) and beverage variety is somewhat lacking (79 compared to 83 for full service). Food variety is at the lower end of the spectrum, steady at 81. Fast food website satisfaction, unchanged at 82, is close to that of full-service restaurants (83).

Restaurants that are getting it right

Among both full-service and fast-food restaurants, several brands improved significantly over the last year. That can be attributed at least in part to the various improvements they undertook, many of which cater to millennial tastes.

Red Robin jumped 8 percent to an ACSI score of 79. In the last year, it rolled out a veggie burger. It tested a new delivery-only concept that operates without a traditional storefront in downtown Chicago. It embraced digital ordering, allowing customers to place orders with a specific pick-up time, prepay, and customize burgers just as they would at a physical Red Robin location.

TGI Friday’s, up 4 percent year over year to a score of 79, is taking delivery to a new level by delivering alcohol as well as food—a new concept for restaurants. It also partnered with Beyond Meat to offer its plant-based Beyond Burger. It has invested heavily in technology, from Alexa skills to virtual bartenders.

On the fast food side, Pizza Hut, which jumped 5 percent to a score of 80, is also testing beer and wine delivery, and might soon deliver pizzas with autonomous delivery trucks. It also rolled out a new loyalty program that rewards online orders.

Millennials have been blamed for ruining everything from running to napkins. Their preferences are certainly reshaping industries. But, at least in the case of restaurants, their desire for choice and customization; fresh, quality ingredients; and a better ordering experience on websites and mobile apps is moving both full-service and fast food restaurants in a positive direction.

iPhone 7 Plus beats the Galaxy S8 and iPhone X in customer satisfaction

/ David VanAmburg

Smartphone sales may have plateaued, but customer satisfaction is still high.

While the latest data and phone manufacturer earnings reports show the impact of longer replacement cycles and fewer leaps ahead in technology, phone manufacturers’ ACSI scores have held steady.

Whether that’s good news or bad news for the industry depends on what comes next.

Apple and Samsung hold steady out in front

It should be no surprise that Apple and Samsung are neck and neck in the lead for customer satisfaction, as they have been since 2014.

Samsung has the higher market share, with 21.9 percent to Apple’s 15.2 percent, but when it comes to customer satisfaction, Apple remains on top with a score of 81, ahead of Samsung’s score of 80, according to the 2018 ACSI Telecommunications Report. Those scores have held steady since 2016.

This year Motorola took third with a 79, rising 3.9 percent year over year, while LG rose 4.1 percent to 77 and HTC sat still at 76.

Cellular telephones as a whole stood at 79 for the third straight year, a sign that we’ve reached a point where new phones aren’t impressing customers the way they once did with leaps in features and capabilities.

Which phones are customers most satisfied with?

Among individual phones, the iPhone 7 Plus came out on top with an ACSI score of 85, beating out the Galaxy S8 Plus at 84, and the Galaxy S8, iPhone 8, and iPhone 8 Plus, which all tied at 83.

Despite being the best-selling smartphone in the first quarter of 2018, the iPhone X landed in the middle of the pack, scoring an 80 – the same as the iPhone 7, iPhone 5S, iPhone SE, and Moto G, among others.

Perhaps the iPhone X’s cost affected its score—criticism that it wasn’t much different from the iPhone 8, just more expensive, could have dampened enthusiasm for the flagship model.

At the bottom of the list are the iPhone 6 and LG G Stylo tied at 78, followed by the Galaxy S5 at 76, and the iPhone 5 in last place at 75.

The age of these phones is likely a factor in their scores, as the iPhone 5 was originally released in 2012, the Galaxy S5 and iPhone 6 in 2014, and the G Stylo in early 2015.

Different phones excel at different tasks

The customer satisfaction ratings for particular features show how different phones succeed in different areas.

For example, the Galaxy S8 Plus ranked first for the quality of its video, while the iPhone 8 and Galaxy Note 5 tied for top marks for quality of audio.

The G Stylo, which overall ranked near the bottom of the list, ties the iPhone 7 Plus for first place in the ease of navigating menus and settings, and takes a close second, behind the Galaxy S8 Plus, in its design—which includes overall size, weight, and size of the screen.

While the G Stylo is more than three years old, it beat out the Galaxy S8, the iPhone X, 8, and 8 Plus in quality of design.

Among the many features measured for the different phones, battery life was among the lowest-ranked. The Galaxy S8 Plus came out on top in battery life, with the iPhone 8 Plus close behind, and the iPhone 7 Plus and Galaxy S8 tied for a distant third.

Why customer satisfaction with phones has held steady for years

Pretty much any phone you buy today is going to offer an outstanding experience. Of course there are varying degrees of outstanding, but the differences are around the edges – a slightly larger screen here, a slightly better camera there, and so on.

The iPhone X, despite improving upon existing iPhones, didn’t revolutionize the market the way the first iPhone did back in 2007.

The iPhone 7 Plus had higher customer satisfaction ratings than newer phones because it’s not that much different than the new phones, but it’s more affordable than recent models. Many don’t feel the need to upgrade as often as they once did, both because of the lack of attractive new features and because changes in phone contracts make getting a new phone more expensive.

We’re all waiting for the product that comes along and makes us want to chuck our smartphones in the trash because the new one is everything we never realized we needed.

It’s getting hard to imagine what that next big thing will be, but eventually it will arrive and shake up this space’s ever-steady customer satisfaction ratings.

Video streaming services compared: Which ones have the highest customer satisfaction?

/ David VanAmburg

At one point, “streaming video service” was just a synonym for Netflix. But Hulu and Amazon Prime Video were close on its heels, and now dozens of streaming providers are wading into the waters.

But not all streaming providers are created equal. Some, like Netflix, Hulu, and Amazon Prime, are investing billions of dollars in original programming. Some have a better and broader selection of movies and TV than others.

It’s clear that streaming services are trouncing subscription TV in terms of customer satisfaction—streaming has an ACSI score of 75, while subscription TV declined this year to a 62.

But in this highly competitive space, measured for the first time in the 2018 ACSI Telecommunications Report, some streaming services set themselves apart, while others fare no better in customers’ eyes than subscription TV.

Here’s who came out on top, who still has work to do, and the aspects of video streaming that customers are most – and least – happy with, from their bill to the quality of original programming.

Netflix, Vue, and Twitch on top

Tied for first place in customer satisfaction, Netflix, Sony PlayStation Vue, and Amazon’s Twitch scored 78, the highest score in the telecommunications segment.

Netflix is the undisputed leader among streaming services, having paved the way for others in the industry, and it continues to dominate. It added a record 7.41 million customers in the first quarter of 2018.

While its subscriber numbers are nowhere near Netflix’s, PlayStation Vue’s customization and flexibility aid its ranking; users don’t mind paying more for what they perceive to be a strong value. Vue sits in a good position with cord cutters disgruntled with cable TV service.

Amazon’s Twitch has taken a different path, capitalizing on the growing popularity of streaming video games, including e-sports, a popular category especially with younger viewers—61 percent of e-sports viewers are between 18 and 34.

Tied for second place are à la carte streaming services Apple iTunes and the Microsoft Store, both with scores of 77.

Amazon Prime, Hulu, YouTube Red in the middle

Google’s YouTube Red comes in at 76, ahead of Amazon Prime Video, Google Play, Walmart’s Vudu, and Hulu, which all tied at 75.

While YouTube Red is rebranding to YouTube Premium, it has had success recently with Cobra Kai, an original series based on the Karate Kid franchise that recently beat out original shows from Hulu and Netflix to top the streaming charts.

Hulu has few ways to differentiate from its competitors in terms of subscriber satisfaction, but with Disney set to assume majority ownership, the service may offer more content and original programming in the future.

Amazon Prime Video has joined rival Netflix with Oscar nominations – and wins – in the last couple years, and has about 26 million viewers.

Network channel subscriptions bring up the back of the pack

Limited by the content they can provide, network channel subscriptions rank below average. CBS All Access (74) comes in ahead of HBO Now and Starz (both 72) and Showtime Anytime (70). DISH Network’s Sling TV (71) has a narrow lead over AT&T’s DIRECTV NOW (70).

At the bottom, Sony’s Crackle takes last place with 68. Even with the lowest score in the video streaming category, Crackle rates higher than all but two pay TV providers.

What viewers like and don’t like about streaming video

The top-rated aspect of video streaming is the ease of understanding the bill, which streaming customers find much more straightforward than subscription TV customers (ACSI score of 80 for streaming, 73 for subscription TV).

Website satisfaction is high (80) among video streaming customers, as is overall performance reliability (78). Call center service was rated 75, head and shoulders above subscription TV, whose call centers were rated 63 after a 3 percent decline from last year.

Streaming video services face an ongoing battle for content, which is often outside of their control. While viewers rate the quality of original programming at 74, they say the most room for improvement is in the availability of current season’s TV shows (71) and new movie titles (69).

The future of video streaming services

While video streaming handily beat subscription TV, that isn’t exactly difficult considering that subscription TV, along with internet service providers, is one of the lowest-rated industries the ACSI tracks.

Many aspects of video streaming services, from ease of understanding the bill to call center experience, outstrip those of subscription TV, but within the streaming space itself, it’s getting harder for some services to differentiate themselves in a crowded market with a few entrenched household names.

By more closely examining how consumers rated their services, however, video streaming providers can better meet viewers’ preferences and redefine perceptions – as well as improve their ACSI score – moving forward.

The best and worst airlines according to customer satisfaction

/ David VanAmburg

Fortunes in the airline industry can change in an instant.

Southwest, which led all airlines in the latest ACSI Travel Report with a score of 80, recently had a plane engine explode and kill a passenger.

Allegiant Airlines, which jumped 4 percent in 2018 to a score of 74, was the subject of a damaging investigation that alleges the airline fails to follow safety standards, among other issues.

Not to mention the rising costs of fuel and new labor agreements. Or the spate of recent mergers that gives no more than four operators control of 80 percent of the market.

If you follow the news, you’ve likely seen countless stories of customer service mess ups on the part of airlines. And yes, the ACSI score for airlines dropped 2.7 percent from last year. All but four of the largest airlines saw weaker passenger satisfaction this year. And with the exception of the check-in process, which remained unchanged from last year, every aspect of flying has deteriorated in 2018.

But there is also good news for airlines in the scores. Let’s take a closer look.

Airlines with the highest customer satisfaction

Southwest, whose ACSI score remained unchanged from last year, took the lead from JetBlue, which fell 4 percent. JetBlue now sits tied for second with Alaska Airlines, which inched up 1 percent.

Southwest’s low fares and high service levels, combined with its growing network, have kept its customer satisfaction levels steady – this is its third year in a row with the same score. Alaska Airlines was boosted by considerably lower ticket prices and its merger with Virgin America, which has a legacy of good customer service.

Tied for third place are Allegiant (up 4 percent), American (down 3 percent), and Delta (down 3 percent). United fell 4 percent, and bringing up the rear are Frontier (down 2 percent) and Spirit (up 2 percent).

Allegiant’s gains may be short lived following news reports of mechanical issues and safety concerns that sent its stock tumbling. Beleaguered by customer service issues, United saw the sharpest decline in the airline industry in ratings of its employees’ courtesy and helpfulness.

Business travelers vs. leisure travelers

Dividing travelers based on the reason for their travel – business or leisure – uncovers interesting insights into customer satisfaction.

One of the biggest differences between the two is that business travelers are more apt to complain. More than a third of the business travelers surveyed filed a complaint with an airline, over three times the 11 percent of leisure passengers who did the same. But business travelers are also much more satisfied, with ACSI scores more than 8 percent higher than those from leisure passengers.

That makes sense: Business travelers travel more often and are more emboldened to address any issues they experience. Airlines, knowing business travelers are among their best customers, make an effort to right any wrongs. Business travelers are also just more experienced, smart travelers. While infrequent leisure travelers might be unhappy with an unexpected part of the boarding process, for example, business travelers know how to play the game.

ACSI-travel-business-vs-leisure

There are also stark differences around airline baggage fees. Among leisure travelers who didn’t pay fees to check luggage (56 percent), the ACSI score was more than 4 percent higher than among leisure travelers who did pay.

For business travelers, it was the opposite. The 69 percent of business travelers who paid to check baggage also had the highest ACSI score among business and leisure travelers, and nearly 7 percent higher than the business travelers who didn’t pay for checked luggage. Not having to pay out of your own pocket certainly helps.

What needs improvement: Nearly everything

The ACSI score for the check-in process held steady, but every other aspect of flying declined.

Ease of making a reservation, the courtesy and helpfulness of flight crews, timeliness of arrival, and website satisfaction all dropped about 1.2 percent. Seat comfort, already in last place, fell an additional 3 percent.

What’s the good news in all this? That even small improvements could pay big dividends for airlines. Just as fortunes can change in an instant for the worst, they can also shift for the better. By homing in on even a few areas to upgrade, airlines can improve their perception among customers.  

Facebook privacy issues: Consumers rank Facebook last among social media sites

/ David VanAmburg

Facebook has had a busy couple weeks. Between back-to-back hearings on Capitol Hill last week and new questions from the European courts this week, the social media behemoth is getting its fair share of regulator attention, negative press, and user complaints.

One of the main spotlights is on Facebook’s privacy policy, especially after the Cambridge Analytica scandal news broke. However, the company’s less-than-stellar record with customer privacy has long been an issue.

Facebook has always struggled with satisfying customers – particularly in the privacy department — according to eight years of customer satisfaction research. When looking at its ability to protect the privacy of personal information, Facebook ranks dead last, which is likely due to its revenue goals encroaching on customer privacy. The second worst, LinkedIn, scores a full 11 percent higher than Facebook.

Overall, Facebook is one of the lowest-ranked companies among e-business sites, scoring a 68 out of 100 — and that’s before the last six months of negative press.

For reference, the social media industry average score is 73.

ACSI-social-media-site-scores-2017Overall ACSI customer satisfaction scores for social media sites as of July 2017.

Across all industries, a key driver of satisfaction is maintaining privacy of information. However, people also value convenience and Facebook is engrained into the social fabric of our lives. Users haven’t changed their privacy settings, and even Facebook’s stock has risen – but not recovered – since Zuckerberg’s testimony to Congress.

Facebook may be too large to be quashed by these recent privacy fumbles, but its satisfaction score can – and likely will – take a hit. It’s certainly a warning to all companies in privacy management: Customers expect their information to be secure.

We’ll take a closer look at social media website scores this summer, but for now, take a deeper dive into the most recent customer satisfaction data with more insights on this industry.

 

Customer satisfaction with hospitals grows as health care sector shifts

/ David VanAmburg

One word defines health care right now: consolidation.

Pharmacy benefits managers (PBMs) are merging with insurers. United Health Group led the charge a few years ago, buying Catamaran. Now CVS is buying Aetna and Cigna is buying Express Scripts. Walmart is in talks to buy Humana. Some see this as motivated by the potential for Amazon to leap into the health care space; the major players are joining forces to ensure they’ll be able to compete.

But the joining of PBMs with insurers could have an effect on hospitals as well.

UnitedHealth bought Surgical Care Affiliates to expand into primary and urgent care in ambulances, and picked up a physician group, moving closer to direct delivery of medical care. CVS and Aetna plan to add community medical clinics to their repertoire. Walmart already operates retail health clinics and has said it would begin offering lab-testing services in some stores.

The $18 billion urgent care center space is expected to grow nearly 6 percent in 2018, building on the more than 7,600 urgent care centers in the U.S. as of June 2017. The number of centers in 2017 was up nearly 10 percent over 2015.

The surge in clinics could be the reason that customer satisfaction with emergency room services jumped 6 percent since last year, to an ACSI score of 73.

That was the most dramatic change in the health care and social assistance sector, and drove the 1.3 percent increase in customer satisfaction with hospitals.

Inpatient hospital care saw a 1 percent rise to an ACSI score of 77. The gains in ER and inpatient care helped offset a decline for outpatient care, which ebbed 3 percent to 78.

Patient satisfaction with ambulatory care (office visits to doctors, dentists, optometrists, and mental health professionals) held steady at 77 for the third year in a row.

Among patients 51 years and up, satisfaction with hospitals was much higher, at a score of 80, than among those 18-50 years old, where it stood at just 72. The difference in satisfaction between the two age groups was most pronounced in outpatient care and emergency room services, where ACSI scores among those 51 and up were 10 points higher than scores for those 18-50.

It will be interesting to see the effect that continued growth of urgent care clinics will have on ER perception moving forward. And when Amazon, along with its collaborators JPMorgan Chase and Berkshire Hathaway, does make moves in health care, it will be anyone’s guess how the health care and social assistance sector, and patients’ satisfaction with its services, will respond.