Mobile apps are a critical factor in customer satisfaction. The data we’ve gathered at the American Customer Satisfaction Index (ACSI) proves its impact. 

But while brands are dedicating a lot of time and resources to the reliability and quality of their mobile apps, they have to remember that mobile is far from the only component that influences customer satisfaction. Just because people have their noses in their phones all the time doesn’t mean they don’t appreciate a good face-to-face experience.

Banks are pivoting more toward digital, but are they going too far? Let’s dig into some of the data.

Shifting to digital too much?

As banks go increasingly mobile, elements linked to in-person customer satisfaction are taking a hit. 

For example, in 2018, Capital One sat near the top of the industry with an ACSI score of 81 (out of 100). This year, the bank sits among the leaders in customer satisfaction in mobile quality and mobile reliability. However, it’s near the middle of the pack in courtesy, branch speed, and wait time. 

The same goes for Chase and Citibank. Both scored well in mobile quality and mobile ease of use but ranked in the middle – albeit a bit higher than Capital One – in most in-person satisfaction benchmarks. 

The story is a bit different for Bank of America. It ranks toward the top for mobile reliability and range of mobile plan options, yet unlike Capital One, Citibank, and Chase, Bank of America is at the tail end of the spectrum for in-person customer satisfaction elements, including wait time, where it sits at the bottom of the industry by a wide margin. And unfortunately, unlike the other three banks, Bank of America had one of the industry’s lowest overall customer satisfaction scores last year at 76. 

Wells Fargo was the only national bank to fall below Bank of America, with a 2018 ACSI score of 74. Customers ranked the bank poorly across the board, particularly for its lack of policy options and competitive interest rates.

The in-bank experience is necessary

According to Mobile Ecosystem Forum’s 2016 Mobile Money Report, 61% of people surveyed use their mobile phones to perform banking activities and 48% use a dedicated app. And yet, 28% prefer bank branches for daily banking compared to the 26% who chose mobile.

You can use your mobile phone for nearly every kind of banking activity. You can check your account balance, deposit checks, transfer money, and even open credit, savings, and checking accounts. And yet, customers still feel inclined to visit their banks.

Industry executives recognize the importance of maintaining a brick-and-mortar presence despite an increased push toward digital. 

In 2018, Chase said it plans to open as many as 400 new branches, while Bank of America intends to open nearly 500. Bank of America CEO Brian Moynihan even noted that 800,000 customers visit their banks every day, and 70% of the bank’s sales are done in person. 

And yet, given the importance of brick-and-mortar branches to Bank of America’s bottom dollar, the bank’s ACSI scores for in-person customer satisfaction are notably low. If Bank of America is betting on physical branches, it should do more to improve its scores.

Is the traditional bank model finished?

Some 49% of bank executives feel that the traditional branch-based model is done, according to a survey by The Economist. The reason? Digital.

Mobile offers customers speed, constant connection, and 24/7 access – everything they could hope for. Until, of course, it’s not.

But this is only a small piece of the puzzle. Retail branches are more than just a last resort for when customers are having technical issues with their devices. 

Face-to-face interactions are the biggest revenue drivers for banks. That’s why some of these banks are opening up new branches – especially in areas where they currently have little to no presence. Offering a sub-par customer experience would be counterproductive to this business model. 

Sure, other banks are closing branches and mobile is the major driver of high customer satisfaction. But as Wells Fargo Chief Financial Officer John Shrewsberry said, “branches play an important part in serving our customers and we will have as many branches as our customers want, for as long as they want them.”

Consumers might not always go to the bank, but they still like having the option. And they expect to have a quality experience while they’re there. Banks would be wise not to forget it.

Let’s raise a glass to the makers of nondurable products. A toast is definitely in order.

According to our most recent Nondurable Products Report, customer satisfaction remains high for almost every industry in the sector, with four of the six industries in the category scoring among the top five industries measured by ACSI.

Breweries lead the way with a score of 84 despite a slight 1.2% drop. Personal care and cleaning products are next at 83 (unchanged), followed by food manufacturing and soft drinks, each steady at 82.

Athletic shoes and apparel – the two industries that fell outside the top five – still fare well among customers, with the former steady at 79 and the latter dipping 2.5% to 77.

If history tells us anything, it’s that we shouldn’t be all that surprised by these marks; high customer satisfaction with nondurable industries isn’t unusual. However, what makes this year different than years past is how we got here. This year it wasn’t the big brands leading the way.

Craft beers continue to shine

While craft breweries aren’t growing like in past years, they continue to keep customers satisfied.

Craft beers made up 13% of the U.S. beer market as of 2018, and according to ACSI, the smaller breweries – brands like Heineken, Sam Adams, and other craft labels – lead the industry with a score of 85.

Smaller brands beat big beermakers like Anheuser-Busch InBev and Molson Coors in customer expectations, perceived value, and perceived quality.

Given these perceptions, it’s no wonder that 76% of beer drinkers said they’d pay more for their craft beer of choice.

That doesn’t mean large brewers are struggling. They’re doing especially well with light beers that fit consumers’ desire for healthier options. However, smaller beermakers are pursuing the same strategy.

Non-beer drinks like hard cider, hard tea, and hard seltzer are the most popular alcoholic beverages right now. Craft brewers are also making “better-for-you brews” that contain less alcohol. While bigger brands try to capitalize on what the consumer wants, the little guys are delivering it, attuned to customer preferences.

Big cleaners can’t keep their noses clean

Last year, Clorox set the bar for personal care and cleaning products. This year, not so much.

Clorox drops 4% to 82, as customers question the brand’s value and quality.

Other large brands like Henkel and Johnson & Johnson also falter, each plummeting 6% to the bottom of the category at 77. The latter two companies both dealt with well-publicized lawsuits over the past year.

Meanwhile, the group of smaller manufacturers climbs to the top of the category. The combined score of companies like Arm & Hammer, Sensodyne, Biotene, and store labels rises 1% to 85.

Questions of quality and value plague the big companies. That, along with customers’ growing push for organic products often delivered by smaller brands, and it’s easy to see how the smaller companies were able to sneak to the top of the field.

Small hit to Hershey helps ‘others’

All of the measured food manufacturers have ACSI scores of 80 or better. But there were changes among the individual brands – especially at the top of the leaderboard.

Hershey’s customer expectations and perceived quality were the highest in the entire category (the latter was a tie). Unfortunately, customer satisfaction took a hit.

2018’s industry leader falls 2% to 84, placing it in a tie for first place with PepsiCo’s Quaker (unchanged), and the group of smaller brands (up 1%).

That group – including Walmart’s Great Value and Kroger’s namesake label – were middle of the road in terms of customer expectations. Yet, per ACSI data, this group bests the other food manufacturers in quality, value, and customer loyalty, while tying Hershey and Campbell Soup for the lead in customer retention. Smaller companies are also competitive in their pricing.

Food manufacturers believe technology can help increase efficiencies, meet growing demand, and improve shelf life and food safety. They also seem to recognize that customers are paying attention to what they put in their bodies.

Healthier options, organic products, and “functional foods” are becoming more mainstream. Smaller companies and store brands are clearly giving the people what they want.

The message is clear

Not all big name brands are losing ground to their smaller competitors in the nondurable products market. Keurig Dr Pepper and PepsiCo tie the smaller companies at the top of the soft drinks category. Premier Brands Group leads the way in apparel, and Adidas and Nike both outpace the smaller shoemakers in the athletic shoe category.

But, the fact is, these are the outliers.

Nondurables are thriving as a whole, but it’s the smaller companies that are leaving the biggest impression. They’re better at connecting with consumers, delivering on quality, and offering greater value. These smaller groups of companies understand what’s important to their customers – healthier options, sustainability, the chance to support local businesses – and they’re winning because of it.

It’s true what they say: Bigger isn’t always better.

At first glance, the personal computer (PC) market has had a string of good news.

Following a steady score in 2018, customer satisfaction in PCs – including desktops, laptops, and tablets – rises 1.3% to an ACSI score of 78 (on a scale of 0 to 100), per our latest Household Appliance and Electronics Report.

While U.S. PC sales remain mostly flat, there was a slight gain in global demand for PCs in the second quarter in 2019, and the majority of PC customer experience benchmarks improved over the last year, with device design (82) and graphics and sound quality (81) leading the way.

Yet, the big picture doesn’t tell the whole story – not as far as customer value is concerned.

To truly understand what’s driving satisfaction in the PC industry, we need to look a little closer. We have to examine what customers say is important to them and which brands are actually listening. As you’ll see, to succeed in the personal computer market, you have to get, well, personal.

Not always by ‘design’

Consistent with previous reports, customers continue to be most satisfied with device design. And just like last year, Apple holds the highest mark for design and the highest score overall at 83.

Given the importance of device design, this may lead you to believe that manufacturers with the top design marks are also making the biggest gains. That’s not exactly the case.

Toshiba had the lowest ACSI score in 2018. It also places in the bottom of the industry in device design this year. Yet, in 2019, Toshiba experienced the greatest jump in customer satisfaction among manufacturers, climbing 8% to 77. How is this possible? Toshiba listened to its consumers.

Last year, according to users, Toshiba’s models struggled with processor speed reliability, failing to keep crashes to a minimum. This year, it’s the exact opposite. Toshiba’s devices are faster and have had fewer crashes. And it’s not the only manufacturer to make necessary changes.

Dell fell 4% in 2018, with customers complaining about its unimpressive design. This year, Dell added a new top-mounted webcam and a new frost color option to its XPS 13 model. Its design score rose, as did its reliability marks. In turn, Dell’s overall ACSI score increased 5% to 77 this year.

Acer has been working to turn things around for the last few years. In 2019, customers took notice. The manufacturer improved in nearly every customer satisfaction benchmark and ultimately climbed 3% to an ACSI score of 77.

Step in the wrong direction

Despite a 3% drop in customer satisfaction 2018, ASUS still rested among the industry leaders. A year later, that’s no longer the case.

According to last year’s report, ASUS was targeting the higher end of the market, yet its main users – gamers – weren’t thrilled about the higher price point. Whatever ASUS did in the last year, it didn’t quell the concern of its customers.

Customer satisfaction in audio and visual quality and processor speed is also down, according to ASUS customers, and its overall score is down another 3% to 76 – ranking it second to last in the industry.

Meanwhile, things are even worse for Lenovo. Following a 1% bump last year, the manufacturer fell to the bottom of the industry at 74. Lenovo customers’ two biggest complaints center around processor speed and features like operating system and preloaded software. In 2018, the company was in the middle of the pack in each of those benchmarks. One year later, Lenovo is now at the bottom of the industry in both.

Stay true to your customers

Customer satisfaction in the PC market took a step in the right direction in 2019. But there’s still plenty of room for improvement – especially for certain manufacturers.

While features like design, graphics and sound quality, availability of software or apps, ease of operation, and website satisfaction score the highest marks among satisfaction benchmarks, scoring high in these categories doesn’t necessarily reflect high satisfaction marks overall.

The key to customer value is recognizing what matters most to your customers and working to improve those areas. Design quality is great if you’re Apple – it’s what your users expect. But for companies like Toshiba, Dell, and Acer, addressing concerns like reliability, speed, and frequent crashes is more relevant to their customer base.

Companies may hear the concerns of their customers but fail to listen and act upon those concerns. As we’ve seen, that can quickly sever any “personal” connection they once had.

You know things are bad when “stalling out” would be an improvement on your current predicament.

After climbing 1.2% in 2018, customer satisfaction in the automobile industry reversed course this year, sliding 3.7% to an ACSI score of 79 (on a scale of 0 to 100), per our latest Automobile Report.

Customers agree that automobiles don’t have the same quality and value they once had.

Rising prices and the constant risk of new tariffs make buying new vehicles less appealing. When you consider that Millennials are strapped with debt, more people are turning to used cars, and ride-sharing apps continue to disrupt the market, it’s not surprising that 21 of the 27 automakers in this report experience declining customer satisfaction, as does nearly every driver experience benchmark.

Lowering prices would seem to be an obvious answer, but that’s at best a short-term fix that doesn’t address customers’ core complaints. The industry has work to do across the board.

But one area in particular is low-hanging fruit, benchmarks with significant room for improvement based on 2019 ACSI scores, and also something consumers are asking for: technology.

Demand is rising for car tech

The desirability of car technology has been building in recent years.

According to the 2017 Autotrader Car Tech Impact Study, 56% of customers research in-vehicle technology and know exactly what they want before even stepping foot in a dealership, while 48% place a higher premium on in-vehicle technology than they do on car brand or body style.

“Technology has become the deciding factor for car buyers selecting a vehicle,” said Michelle Krebs, Autotrader senior analyst. “Automakers must deliver innovative features or risk consumers looking elsewhere.”

According to this year’s Automobile Report, automakers are taking that risk.

Customer satisfaction with technology – controls, displays, audio, navigation, and video systems – in mass-market vehicles is down 2.5% to an ACSI score of 78. Mobile app marks are slightly better, with quality and reliability scoring 81 and 80, respectively, though still in the middle to bottom of all benchmarks measured.

Even luxury vehicle owners weren’t over the moon with the tech in their vehicles, though they were more satisfied than their mass-market counterparts. Technology as a whole decreased 1.1% to 83. Mobile app quality came in at 84, barely inching out mobile reliability, which scored an 83.

Technology and technology-related features like mobile app and website satisfaction are among the fourth-worst scoring customer experience benchmarks for both mass-market and luxury vehicles. But those features, including in-car displays, audio, navigation, and video systems as well as mobile options such as the ability to use remote commands, search for dealerships, schedule service, request roadside assistance, locate vehicles, use navigation, access the owner manual, or view how-to videos, are appealing to drivers.

Where automakers stand in technology satisfaction

Fortunately, some individual nameplates do better with technology than others.

Subaru and Toyota lead all mass-market vehicles for in-car technology satisfaction, while GM’s Chevrolet and GMC have the highest customer satisfaction for mobile quality. GMC, Subaru, Toyota, and Chevrolet score the highest marks for mobile reliability.

Chrysler, Mitsubishi, and Dodge (also part of Fiat Chrysler), on the other hand, are the worst among mass-market vehicles for technology. Kia is the bottom of the segment in both mobile quality and mobile reliability, while Dodge, Jeep, Chrysler, and Ford also score low marks.

Among luxury vehicles, Lexus and Cadillac customers were the most satisfied with their cars’ tech features. Infiniti was the most improved over the last year. Lexus, Cadillac, and Volvo led the way in mobile quality, and Lincoln joined Lexus as the category leaders in mobile reliability.

On the flipside, customers were most dissatisfied in Volvo’s technology offerings. Infiniti, Mercedes-Benz, and Audi struggled with mobile quality; the latter two also lacked sufficient mobile reliability.

Automakers taking technology seriously

Digital transformation continues to have a major effect on the lives of consumers. Some automakers are taking advantage.

Ford launched its “one-stop mobility app” FordPass back in 2016, which lets customers find and pay for parking, locate gas stations, unlock and start their cars, and remotely access information about their vehicle.

Hyundai used a program called Shopper Assurance to make the car-buying process more transparent, allowing customers to handle the majority of the purchase process before they go to the dealership. Hyundai also lets customers schedule test drives at home or at the office. This adds extra convenience and improves the customer experience.

The truth is, customer satisfaction in the automobile industry isn’t going to suddenly turn around because automakers make technology a high priority. But it is a golden opportunity to give customers what they want and improve customer satisfaction in the process. In a competitive industry, failing to make these changes could mean automakers are left in the dust.

Keep your employees happy. The customer is always right.

You’ve heard these phrases before. They’re among the “golden rules” of customer satisfaction. Organizations that live by these words will always stay in the good graces of their customers, or so they say.

But times, they are a-changin’.

While these golden rules still hold true today, the means by which companies achieve them have evolved alongside customer expectations. If you hope to remain on your customers’ good side, you need to keep up with the times.

So, what are these up-and-coming customer satisfaction drivers? Let’s take a look.

1. Embrace the power of mobile

Successful companies – at least from a customer satisfaction standpoint – make it easier for customers to engage with them. The latest and greatest mechanism for giving customers what they want is mobile.

Consumers rely on their mobile phones in nearly every aspect of their lives. That’s why the ACSI has begun measuring mobile app satisfaction.

Although outliers exist, organizations with higher mobile app scores oftentimes have higher customer satisfaction scores as well. This is no coincidence. Customers want instant gratification, they want innovation, and they want customization.

Mobile apps offer all this, and in doing so, make it that much easier for customers to connect to organizations and brands.

2. Look beyond the price

Customers love when companies lower their prices. This almost always has a positive effect on overall customer satisfaction. But don’t get things twisted; this is not a long-term solution.

You can only shrink your prices for so long. Eventually your profit margins will be too small to sustain this practice. Besides, there are other factors that matter outside of price – and these might be more beneficial to your bottom line.

For example, when we used a Customer Segment Value (CSV) model in our inaugural Wireless Service and Cellular Telephone report, we gained more insight into how customer satisfaction may impact revenue for wireless carriers.

In analyzing how much customers spend on their wireless bills per month alongside customer satisfaction and customer retention data, we learned that while the majority of customers fall in the “lower spend” segments, these individuals don’t contribute as much to a carrier’s overall revenue. If wireless providers want to increase revenue potential, they need to improve the customer satisfaction of those in the “higher spend” segments.

Lower prices get customers’ attention, but can only hold it for so long. ACSI data show quality plays a more important role in customer satisfaction. And if you’re only focusing on price, you’re likely missing out on other revenue-generating opportunities.

3. The ‘need for speed’

“I feel the need … the need for speed.” Tom Cruise’s character in “Top Gun” may as well be speaking for today’s consumer.

According to a study, 73% of shoppers surveyed favor retail self-service technologies over conversing with store workers. They also prefer retailers that use mobile technology in their stores, with 76% of respondents favoring the availability of self-service mobile tools or employees equipped with mobile devices.

Insurance and investment services that have enhanced their digital experience are also seeing upticks in customer satisfaction. Nationwide rolled out a new blockchain framework for its mobile app and earned a positive response from consumers.

The app lets customers start and process their claims from their mobile devices and offers real-time policy verification, eliminating the need for hard-copy verification. This app received high ACSI marks in 2018 and helped Nationwide improve overall customer satisfaction by 5%.

With mobile tools and different forms of automation, customers can enjoy a quick, easy, and (generally) painless brand experience. This is what consumers want. The organizations that recognize this will see better results.

You can’t afford to rest on your laurels

Companies used to have an informational advantage over their customers. No more.

Consumers have a plethora of information at their fingertips and no longer have to take an organization’s word for things. They can research companies and make educated decisions.

In fact, 76% of customers feel it’s much easier to “take their business elsewhere – switching from brand to brand to find an experience that matches their expectations.”

Companies can no longer make assumptions about their customers. They have to do the work, make the effort, listen to their consumers, and adapt to their ever-evolving needs to increase their chances of maintaining customer satisfaction. Those that don’t, well, best of luck to you.

The news these days can be polarizing. But one thing folks can agree on is that the way they’re receiving news is top notch.

In our most recent E-Business Report, which covers social media, search engines and information sites, and internet news, only the latter industry increases in overall customer satisfaction, climbing 2.7% to an industry-high ACSI score of 77, the sector’s best showing ever.

So why are more Americans happier with the news they receive online? Simple: the industry is doing a lot of things well.

Online news is mastering mobile

Television remains the most popular source of news for Americans. However, at least 90% of adults in the United States get some of their news from digital outlets like mobile.

That’s where the digital news industry is making a name for itself.

The industry earns its highest marks for mobile reliability and quality, both with an ACSI score of 82. Customers find mobile devices easier to use than last year. That benchmark climbs 8% to 80.

FOXNews.com, which tops all individually measured news sites with an overall score of 78, leads the competition in both mobile quality and mobile reliability. Meanwhile, USATODAY.com ranks near the top of the industry in both mobile benchmarks and also experiences the largest jump in customer satisfaction (up 4% to 74).

The digital news industry is embracing mobile and customers are as satisfied as they’ve ever been with this industry.

Sweeping improvements all around

Mobile is just the beginning. The digital news industry shows enhancements across the entire reader experience.

 

Readers enjoy the array of fresh content (up 4% to 81), with FOXNews.com, NYTimes.com, and ABCNews.com leading this category. Overall site performance improves 5% to an ACSI score of 80, with FOXNews.com and NYTimes.com customers once again feeling the most satisfied.

News sites offer better navigation and information variety than last year (both up 3% to 79). They also offer faster and more reliable videos (up 7% to 78), with NYTimes.com besting the other outlets in this industry.

Best of all, readers are more satisfied with the number of ads they’re seeing. This benchmark rises 7% over the past year to an ACSI score of 72.

The future is digital

Digital new sites appear to know what their consumers want, and they’re doing what it takes to fill those needs. The fact is, when your industry raises its game for even the lowest overall benchmark – the amount of ads on the site – you’re clearly doing something right.

Franchises allow entrepreneurs to try their hand at business ownership while gaining the huge advantage of working off a proven brand and operating model. But it’s not always smooth sailing. Sometimes the lines of business are blurred and miscommunication about who is responsible for what can lead to customer satisfaction issues.

Just like individual store locations are part of a bigger corporate entity, franchises are responsible for maintaining their own guidelines while adhering to a certain overarching standard by the franchisor.

In this post, we break down some of the most frequently asked questions and share high-level observations about how you can maintain — and improve — satisfaction in a franchise environment.

Q: In a franchise system, who is responsible for managing customer satisfaction? Is it the responsibility of the franchisee or the franchisor (or both)?

A: It’s both. Ultimately the franchisee needs to be successful, but guidance comes from above. Franchisees must adhere to corporate guidelines that can’t be changed, such as signage and regulations, but can still be thought of as individual storefronts within a larger system. While the franchise model is technically different than a store brand model, the customer satisfaction aspects are no different for a store that isn’t franchised. There’s still a manager for each location, and they’re still responsible for profits, services, employee training, etc.

The model isn’t influencing customer satisfaction — whether you’re in a corporate environment like Home Depot or a franchisee like McDonald’s, it’s the same kind of things that create a satisfying experience.  

Q: Should the franchisor assist franchisees with satisfaction, particularly in local markets? If so, how?  

A: The franchisor should provide standard best practices and procedures required of all franchisees to ensure an enjoyable experience. It’s also recommended that franchisors share guidelines that ensure uniformity in the quality of experiences. For example, Chick-fil-A is really controlling, right down to its waffle fries, which need to look and taste exactly the same to all customers.

While the franchise may be “local,” it still has to adhere to national standards.

Q: How can the franchisor incentivize franchisees to improve satisfaction?

A: Customer satisfaction should be incentive enough. As the ACSI has found across all industries, higher customer satisfaction leads to higher profits. However, there wouldn’t be anything wrong with incentivizing customer satisfaction even more.

Q: Could low satisfaction with individual franchises impact the brand’s reputation or satisfaction, and vice versa?

A: It’s likely the reputation of one franchise location would be too small to impact the overall brand. Isolated customer incidents, like food poisoning at one location, most likely won’t impact customer satisfaction on a larger scale — at least in terms of ACSI — because not enough customers would’ve directly experienced the issue.

Individual locations might influence satisfaction if the incident is substantial enough or spans across multiple locations. For example, numerous Chipotle locations served tainted pork that made their customers sick, and we did see this impact satisfaction across the board.

Q: How do franchises ensure uniform and consistent satisfaction? Do they need to cater to certain geographic preferences, or are there other ways to stand out while still ensuring brand standards are in place?

A: It makes business sense for a franchisor to look at the customer satisfaction of their franchisees. Corporate could perform detailed surveying based on objective measurement for every location to identify the top performers and then pull best practices out of that location as a model for all others. The same could be done for the bottom performers to identify harmful practices and share those within the system.

There are differences in customer satisfaction based on geography, so surveys could reveal even more about regional discrepancies and tastes.

Q: Should franchisors have uniform satisfaction measurement tools across locations? How else can they ensure consistency?

A: Franchisors should absolutely set the standard for satisfaction. The key is to establish criteria like courtesy of staff, food quality, cleanliness, accuracy of orders, etc. and then implement the metrics across all franchises. This will help franchisors benchmark, identify best-in-class performers to be emulated, and identify under-performers to target for specific improvement strategies. Measurement should ideally occur monthly, but at the very least quarterly.  

Furthermore, it’s advisable for franchisors to not only measure, but also enforce customer satisfaction best practices. There needs to be a way to ensure consistency of brand standards across all franchisees. One way to ensure consistency might be to revoke a franchise if they aren’t consistent with standards, or at least give them a warning and step in to evaluate what could be improved. There’s also the option to take additional disciplinary action, like a fine, if there are multiple infractions.

Q: Does customer satisfaction among franchises differ across industries? For example, retail franchises vs. restaurant franchises?

A: There are always nuances in satisfaction from industry to industry, but overall there are some key observations that ring true for most organizations. The major franchise industries are hotels and fast food restaurants, so that helps narrow down the demographics a bit.

Q: What’s the number one thing franchises need to keep in mind regarding customer satisfaction?

A: Like any company, franchises need to focus on employee satisfaction. Customers will have the same expectations at each franchise location, so franchisees need to be prepared to satisfy them — and employees are on the front lines, so they need to be adequately trained and supported. Happier employees tend to result in happier customers, which means better bottom lines.

Q: Can you give an example of a franchise system and how customer satisfaction is impacted across multiple locations?

A: Take Papa Johns, for example. One thing to consider is that any challenges with corporate or the brand don’t necessarily impact customer satisfaction ratings; that doesn’t change the pizza quality, and that’s what matters more to customers.

Ultimately, customers aren’t aware of whether they’re being served by a franchise or a corporate branch, nor do they really care. It’s important for any business to create a uniform, pleasing experience to meet the customer’s expectations.

 

Every location and person representing the brand — whether at the franchisor or the franchisee level — is responsible for maintaining a certain set of standards to ensure customers are happy with the service.

If you’re a franchise interested in understanding more about these satisfaction nuances or how you can improve customer service among your franchised locations, please reach out to Tina Dettloff at tdettloff(at)theacsi(dot)org.

For the first time, as we noted in our inaugural Wireless Service and Cellular Telephone report, we posed the following question to consumers: “How much do you spend, on average, each month for your wireless service?”

A simple question, really. However, when analyzed alongside customer satisfaction and customer retention data, we gain an entirely new perspective on just how much customer satisfaction can impact wireless carrier revenue. This new Customer Segment Value (CSV) model speaks volumes.

Our study breaks consumer spending on wireless phone services into nine different segments:

• $1-$25
• $26-$50
• $51-$75
• $76-$100
• $101-$150
• $151-$200
• $201-$250
• $251-$500
• $501 and above

The model used to analyze this data enables us to differentiate customer groups based on how much each spends on wireless services, as well as the differences in customer satisfaction and customer loyalty. This information, plus sample proportions for each group, gives carriers insight into which customer segments will likely generate (or save) the most revenue with increased customer satisfaction, and where service improvements will most move the needle for those customers.

Here’s what we discovered.

Which wireless customers are more satisfied and more loyal?

Data from the different CSV groups shouldn’t be expected to perfectly reflect actual spend segment proportions for a company, but it does give us a better understanding of what customers in this sample look like from a spending standpoint.

We discovered that, at the industry level, more than 25% of customers fall in the $26-$50 spend range and 55% spend between $1 and $75 on their wireless bill each month. However, under 10% of respondents spend between $201 and $500 monthly, and just 1% spend more than $500 per month (thereby limiting our ability to analyze this data completely).

The data also identifies the leaders and laggards in ACSI and retention across the CSV groups. The “lower spend” segments – $1 to $75 – are more satisfied, more loyal, and have lower churn rates than almost all other groups, with only the very highest spending customers – the tiny proportion of those spending more than $500 each month – experiencing higher churn. For customers spending more than $76 per month but less than $500, ACSI scores and retention rates drop considerably.

The most valuable wireless customers

We then multiply the monthly annual per-customer spend by the number of customers in each CSV group to find the revenue and relative contribution to total revenue for each segment in the sample. If you’re familiar with the 80-20 rule, you won’t be surprised by the results.

The $1-$25 group accounts for nearly 15% of the total customers, yet only contribute 2% to overall revenue. Meanwhile, the $251-$500 group consists of under 5% of the respondents but contributes more than 17% to total revenue. Based on both its sample size and mean customer spend, the $101-$150 segment, which accounts for a little less than 14% of the total customers, contributes the most to the total annual revenue at a little under 19%.

The customer segment responsible for the biggest revenue losses

We then use our churn rate estimate and the per-customer spend estimate for each segment to estimate how much potential revenue carriers lose each year.

Due to its high spend, low ACSI score, and high churn rate, over 20% of potential revenue is being lost from the $251-$500 segment. The $101-$150 group is also losing almost 19% of potential revenue.

As it were, close to 70% of the total revenue lost each year is among customers spending $101 or more per month.

Targeting the top to save 25% of revenue

According to this study, companies can “save” the most revenue lost due to customer defection each year with a five-point improvement to ACSI for the $251-$500 segment – close to 25%. One idea to increase satisfaction: Carriers could provide these customers with a wider variety of plan options, something that’s clearly lacking based on our data.

The same five-point improvement for the $101-$150 spend segment would provide just under 23% in revenue saved, the second largest in annual savings.

There’s more where that came from…

This study focuses on the wireless industry as a whole. However, the CSV model can be used more specifically, and can provide the data for more complex types of Customer Lifetime Value (CLV) modeling.

With this information on spending, companies can better target not only which groups are more or less satisfied and loyal, but also understand which groups are most important to focus on to improve satisfaction and loyalty in a way that will most likely yield the biggest economic return.