How do boycotts impact customer satisfaction? The answer might surprise you

Not too long ago, we were discussing how everything in our lives feels like it’s politicized. At the time, we were talking about satisfaction in federal government services. This time, the topic is different: Boycotts.

The recent call to boycott Goya Foods after the CEO’s public endorsement of President Trump has people on both ends of the political spectrum picking sides. But, while this latest call for action will likely have ramifications, what will those effects be? How do boycotts impact customer satisfaction?

We decided to look at the data and see for ourselves.

Calls for boycott vs. customer satisfaction scores

We looked at several high-profile calls for boycotting in recent years and examined the subsequent customer satisfaction scores for the companies involved.

Take Nike, for example. In 2018, the company named Colin Kaepernick one of the faces of its “Just Do It” campaign to commemorate the slogan’s 30th anniversary. While many responded to this decision by burning their Nike apparel and calling for a boycott, the company’s ACSI score climbed 5% to 81 – a near record high for the brand.

The same thing happened to Home Depot. Last year when shoppers railed against the company after cofounder Bernie Marcus said he planned to donate to President Trump’s reelection campaign, Home Depot’s ACSI score didn’t drop. It climbed 2.6% to an ACSI score of 78 – the only specialty retailer to improve considerably.

Despite repeated controversies from founder John Schnatter, Papa John’s managed to weather the storm from a customer satisfaction perspective, holding steady between 2018 and 2019 with an ACSI score of 80. At the time, Papa John’s remained tied for the lead in the pizza segment.

A public outcry to boycott a company might seem like it would have an adverse effect on customer satisfaction. But that hasn’t been the case. Yet, even if it were, it’s not something that would be reflected in ACSI measurements.

Why boycotts have no bearing on ACSI scores

The reason is boycotts aren’t factored into ACSI scores isn’t complicated: ACSI only measures consumers who purchase a service or product; it’s not interested in those who don’t.

ACSI scores reflect customers’ personal experience with the products, level of quality and service, and overall experience these companies provide, not the emotional reaction associated with customers’ opinions on the political or social perspectives of the company’s leaders or spokespeople.

For instance, during the #BoycottHomeDepot movement, the company improved in nearly every customer experience benchmark, including layout, store speed, variety, courtesy, discount, and inventory. Nike’s biggest issue – from an ACSI standpoint – at the time of the Kaepernick situation was pricing. The company ranked worst in class for value.

In both cases, ACSI scores were directly tied to the quality and value of services and products being experienced, not the feelings of individuals who didn’t use the services and goods for social reasons.

However, while boycotts might not be reflected in ACSI scores, companies can feel the effects just the same.

Brand reputation and the bottom line

Nike’s position turned out to be fruitful for the company’s bottom line. According to data from Edison Trends, online sales jumped 31% in the immediate period following the Kaepernick announcement.

With Home Depot, any potential boycott that may have occurred had seemingly no effect on the company’s revenue.

On the other hand, Papa John’s experienced the opposite. In July 2019, same-store sales fell 10.5% in North America. On the earnings call, executives blamed Schnatter’s controversial comments, and CEO Steve Richie noted that the company needed to move away from a “founder-centric marketing plan.”

Customer satisfaction might not be impacted by social stance, but an organization’s revenue, loyalty, and public perception certainly can be.

What’s important to your customer?

Boycotts don’t negatively impact customer satisfaction; customer-facing elements like product quality, variety, store speed, mobile app reliability, and customer service do. But that doesn’t mean companies can afford to look past calls for boycotts, either.

Organizations must keep customers top of mind — what they want from a product or service, and their expectations for the social positions of companies they buy from.

Both areas influence company reputation, both play a role in public perception, and both can impact whether a customer buys from a brand in the future.

ACSI partners with Microsoft to provide customer satisfaction analysis via Customer Voice and Microsoft Dynamics 365

During yesterday’s Microsoft Inspire partner network event, we unveiled new ACSI do-it-yourself CX tools, called ACSI Analytics, developed for Microsoft Dynamics 365. This offering will enable companies to access Microsoft’s powerful new Customer Voice templates and capture the customer experience at any level of the organization.

With ACSI Analytics, companies will be able to benchmark their performance – and identify competitive advantages and disadvantages – on a full array of customer experience metrics against the most competitive companies in the United States across dozens of industries and economic sectors.

The ACSI simulator will also allow users to obtain real-time outputs from ACSI’s dynamic cause-and-effect analytics, utilizing a continuously updated simulator to identify what customers like and dislike. This information provides intelligence on the kind of improvements that will have the greatest impact on customer satisfaction, customer retention, and a company’s financial results.

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How you can use ACSI Analytics on Microsoft’s Customer Voice and Microsoft Dynamics 365

ACSI Analytics utilizes insightful survey questions to glean information from the most important judge of every company’s products and services – the customer – through Microsoft’s easy-to-use Customer Voice survey platform templates. Once the Microsoft Dynamics 365 user chooses to complete their project through the Customer Voice platform using ACSI Analytics, the journey to gaining an unrivaled understanding of your customer relationships begins.

Engaging with the ACSI via Microsoft’s Customer Voice and ACSI Analytics will allow the user to access a database of rigorously tested and widely adopted survey items, including ACSI’s world-leading framework of customer satisfaction questions. Additional metrics tap into customer expectations and experiences throughout the various stages of the customer journey, letting Microsoft Dynamics 365 users select those most relevant to their unique customer base.

The ACSI data collected in Customer Voice are integrated into ACSI Analytics metrics, constructs that combine multiple survey items to measure customer experiences and performance accurately and reliably, determining if customers’ wants and needs are met throughout their journey. The patented ACSI prediction simulator provides a snapshot of the lifetime value of a company’s customer assets, the profits the company can expect to reap from customers with current levels of performance on the CX metrics, customer satisfaction, and customer retention.

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Beyond benchmarking and obtaining ACSI data

But benchmarking and comparison alone are not enough. With ACSI Analytics, a company can take the critical next steps from identifying how it’s performing relative to industry leaders, to deciding where to focus its improvement efforts. What changes will have the biggest impact on improving customer satisfaction, and through it, customer loyalty?

Most importantly, what impact will these improvements have on the value of customer assets? The ACSI Analytics prediction simulator can answer these questions and more, helping to launch a company’s business into a new phase of customer-centric growth.

While billions have been invested in do-it-yourself CX platforms and Artificial Intelligence over the past decade, the complexity and inaccessibility of these systems have led to inconsistent results for many companies. With ACSI Analytics and Microsoft Dynamics 365, the promise of better customer relationships and improved financial performance can become reality for every company.

To learn more about ACSI Analytics on the Microsoft Customer Voice and Microsoft Dynamics 365 platform and how you can get started, visit www.theacsi.org/acsi-analytics-solution.

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Here’s why customer satisfaction needs to be on the top of every business’ to-do list

How do you meet normal customer expectations when the world’s been reduced to anything but normal? Companies have been searching for the answer to this question (among others) since the arrival of COVID-19.

But the answer is the same as it’s always been. You can have an incredible product, the best employees, stand-out marketing, few competitors, and still fail if you lose sight of the most important part of your business: your customer.

Customer satisfaction must be the target you aim for. You can make a lot of mistakes and face a lot of hardship and still emerge successful as long as you’re devoted to meeting and exceeding customer expectations.

Even in a global pandemic, customer satisfaction should be at the heart of your strategy. Here’s why now is the perfect time to reassess and prioritize customer satisfaction.

The virtuous cycle of customer satisfaction

If your customers are happy, they’re often more loyal. If they’re more loyal, they’re more likely to continue using your products or services. This is the virtuous cycle customer satisfaction sets in motion and why it’s so important to your strategy.

Even when service can’t function as it usually does. We saw this as the pandemic began and many restaurants had to close their doors, limiting their service to takeout. Yet loyal customers kept showing up to support their favorite businesses.

Still, these are trying times for many businesses, and while you might have been focused on the customer before the pandemic, now many organizations are struggling to keep the lights on and their team employed. Some may argue they don’t have the time or resources to put into customer satisfaction initiatives or campaigns. Not to mention that the way they previously served customers has been transformed.

The way you achieve customer satisfaction today might not be the way you achieved it last year. But customer satisfaction should still be the north star of your strategy and guide any pivot or transformation you need to get there.

Listen, learn, and prioritize the right things

Prioritizing customer satisfaction means understanding, meeting, and exceeding customer needs. Start by listening. Survey your customers, talk to them. Encourage direct customer feedback and monitor social media chatter. Find out what they’re really interested in and why. Show your customers that you care about their needs. Let them know that you’re there for them now and after the pandemic.

The insights gleaned from these conversations will leave you in a better position to incorporate changes into your overall business strategy. That could be improving the functionality and reliability of your website and mobile app. It might be reassessing customer service, especially for critical services right now like broadband internet. It could mean enhancing the quality of a product or offering more variety, without raising the price.

In addition to making sure your customers’ needs are met, don’t forget about your own employees. You must take care of them as well. Offer them support, provide them with a safe work environment, give them reasons to want to come to work. If your employees have a better experience, your customers will too.

Which companies are prioritizing customer satisfaction?

The current economic situation, for all its hardships, is also an opportunity. Some organizations – and industries – are seizing it, driven by their pursuit of customer satisfaction.

Since the onset of stay-at-home orders, there’s been a major uptick in the use of streaming services. And while Netflix has been dominating this arena for quite some time, Disney+ appealed to consumers’ desire for original content by debuting “Hamilton.” This resulted in a 74% increase in Disney+ app downloads in the United States compared to the average four weekends in June, according to Apptopia.

After online grocery sales grew as much as fivefold during the height of the pandemic lockdowns, retailers are responding. Walmart is taking aim at Amazon Prime’s delivery empire by announcing it will launch its own membership service, Walmart+, in July. While there’s an annual membership fee, the perks are expected to directly address customer needs, from reserved grocery delivery slots and unlimited same-day grocery delivery to gas discounts and allowing in-store customers to check out without waiting in line.

CVS is also getting into the delivery game by partnering with DoorDash to deliver non-prescription items in select cities. The expansion of no-contact deliveries and as well as not requiring pre-scheduled delivery slots alleviate customer concerns about in-store shopping and frustrations with overbooked grocery delivery services.

And, of course, even as more and more restaurants begin welcoming customers back to the storefront, they refuse to turn their backs on services that have become even more prevalent during the pandemic. Contactless delivery and curbside pickup won’t just disappear.

These are just a few examples. However, they’re an indication that many companies are pivoting to meet the needs of their customers despite a pandemic that changed business models practically overnight.

Putting the customer first

At some point – who knows when – we’re going to come out on the other side of COVID-19. And when that time comes, the companies that figure out how to put the customer first are going to thrive.

Even in trying times, customer satisfaction should be a guiding benchmark. By measuring, monitoring, and listening to what consumers want, then implementing improvements to fit those needs, businesses can find new life and jump start the cycle of satisfaction and loyalty that drives the most successful businesses.

Are Customer Expectations Really Sky-Rocketing?

A near-consensus among business and marketing professionals seems to have emerged: the expectations of consumers are rising rapidly, dramatically, and across the board. The specter of “sky-rocketing customer expectations” is often referenced as a warning to marketing professionals and companies as a whole: fail to meet these lofty and ever-increasing consumer demands, and it could mean financial doom.

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A Brief History of the American Customer Satisfaction Index (ACSI)

“To understand more fully the modern economy, and the firms that compete in it, we must measure the quality of economic output, as well as its quantity.”  Claes Fornell, Chair of the Board and Founder, American Customer Satisfaction Index, 1996

This ACSI Matters Blog is a modified excerpt from the ACSI expert team‘s 2020 book – The Reign of the Customer: Customer-Centric Approaches to Improving Satisfaction – covering 25 years of data, insights, tools, and managerial implications related to customer satisfaction and customer asset management.

So how and why did the ACSI project emerge?

How and why was the ACSI project created? How does ACSI measure consumer satisfaction with individual companies, industries, and economic sectors? How has it evolved over the course of a quarter of a century since its beginnings in 1993-1994?

A clear notion of how and why the ACSI was created and how it measures satisfaction across the U.S. economy and around the world provides the foundation for a deeper understanding of important and enduring purposes of consumer insights and customer satisfaction measurement. In turn, this information will enhance the insights and lessons derived from 25 years of ACSI data that is so widespread in the popular press (e.g., Wall Street Journal, Forbes, Fortune, Newsweek) and myriad academic journals (per Google Scholar, more than 13,000 articles have referenced the ACSI).

In the early 1990s, researchers at the American Society for Quality (ASQ) – a prominent professional association founded shortly after World War II with the goal of advancing quality improvement principles and practices within economies around the world – recognized the need for a comprehensive, national measure of quality for the U.S. economy. Only with such a measure, so it was thought, could a clear understanding of how well the U.S. economy was performing be achieved. ASQ began by investigating whether a national, cross-company, cross-industry measure of quality already existed, and if not, whether its development was feasible.

With the help of a team of experts on the topic, ASQ examined numerous approaches to quality measurement and determined that no standardized measure of quality existed that could be applied to the multitude of diverse products and services offered within a modern economy. More specifically, while many different quality measures existed, none was designed to effectively compare and benchmark these measures across distinct industries and categories (e.g., goods vs. services, cars vs. consumer-packaged goods, or to aggregate them into a national index of quality (i.e., an economy-wide, macroeconomic view of quality). However, one potentially useful model that was being implemented outside the U.S. at the time was brought to the attention of ASQ: the Swedish Customer Satisfaction Barometer (SCSB).

A few years before ASQ began its search, in 1989, Swedish economist and professor at the University of Michigan in the United States named Claes Fornell had designed and launched a national index of customer satisfaction for the Swedish economy, a project called the Swedish Customer Satisfaction Barometer (SCSB).

The ACSI Matters has an interview with Claes Fornell.

Fornell had spent the first decade of his academic career writing extensively on the topics of customer satisfaction, consumer complaint behavior, the economic impacts of customer relationship management, and advanced statistical analysis of consumer survey data.  It was this expertise that had led him to conceive and create the SCSB.

With support from the Swedish government, which had seen its economy struggle with increased competition and slower growth throughout much of the 1970s and 1980s as the effects of the European Common Market became fully apparent, the SCSB was the first project to apply a single, standardized statistical model for measuring both quality and customer satisfaction across the diverse sectors of a large national economy. In its first year, the SCSB successfully measured satisfaction with nearly 100 Swedish companies across 28 distinct consumer industries, interviewing approximately 25,000 customers of these companies in the process. Ultimately, it was this model that would attract the attention of ASQ, be chosen as the best alternative for measuring quality and satisfaction in the U.S., and be transported across the Atlantic to be applied to the larger U.S. economy as the American Customer Satisfaction Index (ACSI).

It was on the basis of the SCSB project that the ACSI was founded in Ann Arbor, Michigan, by a group of professors at the University of Michigan’s Business School (now the Stephen M. Ross School of Business), under the direction of Fornell. With funding from ASQ, the University of Michigan, and several other organizations, an extensive “first wave” pretest of the ACSI was conducted in 1993. Analysis of these results confirmed what had previously been discovered in Sweden: that a cross-industry, cross-sector measure of the quality and satisfaction of a nation’s economic output was indeed possible, providing highly informative results about the conditions of the economy.

One year later, in 1994, the baseline ACSI study was produced. This first wave of the ACSI study measured satisfaction with seven sectors of the U.S. economy, 30 industries, and approximately 180 large business-to-consumer (B2C) companies. The study has been replicated each year since, with fresh results collected and released throughout each calendar year. And as we show in our recently released book in 2020 – The Reign of the Customer: Customer-Centric Approaches to Improving Satisfaction – when reviewing the methods and models of the ACSI, the study has grown significantly in the intervening 25 years.

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The central purpose motivating Fornell to create the ACSI was simple and relates to the mission that originally sent the American Society for Quality (ASQ) on its search for a national index of quality. This objective remains important to better understanding the modern economy. While nations had for many years (since at least the 1940s, and in some cases earlier) measured the quantity of output produced within their economies through a variety of different metrics (and continue to do so today), they had up until the 1990s predominantly ignored a more elusive, but arguably more important feature of sustainable economic growth – the quality of output.

In Sweden, for example, the SCSB was created with the explicit goal of increasing the quantity of economic output in that country, and thus its Gross Domestic Product (GDP) growth, but doing so by measuring, monitoring and improving the quality of that output as perceived by consumers. This would, it was hoped, increase consumer demand. The quality improvements were thus intended to make struggling Swedish firms more competitive both domestically and internationally by better pleasing consumers and inspiring them to spend more with domestic firms.

By the 1980s and 1990s many companies had begun to measure customer satisfaction internally (along with related “consumer insights” and the “voice of the customer” (VOC)).  However, lack of access to this data and the disparate research methods (e.g. different survey items, samples, timeframes, statistical methods) used to conduct measurement across these companies, coupled with divergent quality of the resulting output, made comparison and aggregation of the data to the macro level impossible. In short, new economic realities were increasing competition dramatically and making quality and innovation more important than ever, but standardized data permitting a clear understanding of the quality of goods and services being produced were largely unavailable.

It was from within this context that Fornell recognized that growing domestic and global competition demanded a clearer idea of the factors that satisfied increasingly powerful consumers. What motivated these consumers to open their wallets to spend money on certain brands of goods and services more so than others? Measuring satisfaction (alongside its drivers and outcomes) in a systematic, standardized fashion across the entirety of a national economy would provide vital information for fully understanding the health of companies, industries, and entire economies from the perspective of the ultimate and most important judge, the individual consumer. Clearly this perspective is more relevant than ever today, and will likely become even more so in the future as ongoing changes in the global marketplace appear to be dictating.

As the Information Age has evolved from science fiction to a fully developed reality over the last few decades, consumers now have more choice and greater power than ever before. The internet revolution has profoundly changed how buyers and sellers relate to one another, and in the amount of leverage and power held by consumers. The changes ushered in as part of the Information Age have given consumers many new advantages. These include: greater access to information about specific products and services prior to purchase and consumption; greater access to information about alternative suppliers (sellers) of goods and services; an increased ability to punish sellers through more impactful complaint behavior and word-of-mouth; and an increased ability to more directly influence new product/service offerings (i.e. co-production of goods and services). These changes have forced companies to reconsider how they measure and manage their performance, and to focus more on the voice of the customer.

Whereas companies – and national economies in their entirety – once relied almost exclusively on measures like labor productivity, market share, revenue growth, profitability, stock market valuation, and gross domestic product as performance indicators, these days in a more state-of-the-art analysis companies rely on external, customer-facing measures and the linkages between these measures and financial performance.

Indeed, practices like customer relationship management, customer asset management, and concepts like “customer-centricity” today occupy a central place in the discourse of performance precisely because of this changed landscape. More and more, measuring consumer satisfaction and related consumer perceptions and insights is viewed as a vital, necessary activity for the firm hoping to adequately compete for buyers in increasingly-competitive free markets. The same imperative holds for the national economy looking to compete in an environment with fewer boundaries and obstacles to free trade.

As an excerpt from Chapter 1 (Defining Customer Satisfaction: A Strategic Company Asset?) of our book – The Reign of the Customer: Customer-Centric Approaches to Improving Satisfaction – this ACSI Matters Blog provides a brief history of the ACSI. The findings and lessons in the book delve deeper into the ACSI and the half a century of results and implications. These findings reinforce the continued and growing importance of customer satisfaction and its measurement in the global marketplace.

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