Good for business, bad for customers? The double-edged sword of M&A

There were 43 mergers and acquisitions (M&A) of over $10 billion in 2019 – an 8% increase from 2018. There were another 21 deals worth more than $20 billion a piece.

This is just the start.

The worldwide value of M&A transactions reached a total value of $3.9 trillion in 2019. While that’s 3% less than 2018, it’s the fourth-strongest year ever recorded.

This is good news for investors. The same cannot be said for customers.

The American Customer Satisfaction Index shows that large M&A deals commonly have a negative effect on customer satisfaction. On average, the acquiring company experiences a 3% drop in customer satisfaction over the initial two-year period post-merger.

Why is that? There are a few major reasons – but sometimes it depends on the industry.

1. It’s not about customers

M&A often has a negative effect on customer satisfaction because it isn’t done on behalf of customers; it’s done on behalf of shareholders.

Typically, in an acquisition, companies aren’t trying to grow their customer base by improving how they provide goods and quality services. They’re literally buying another customer base.

The goal for these companies is delivering value to shareholders. In the process, they can alienate consumers, ultimately working against their own goal.

2. Customers in service-related industries suffer the most

Customers of manufacturing-related industries usually don’t notice a difference following M&A. If a company buys a line of canned food, for example, and keeps putting it out with the same label and the same quality, the customers who purchase that product aren’t really affected. They still receive the same product, made the same way. The only difference is the organization behind the scenes that now owns the brand – and customers might not even know that’s changed.

For customers of service-related industries, however, the change in ownership is felt in a big way.

Banking, retail, airlines, utilities, and anything else involving services, is where you typically see a significant customer satisfaction drop in the wake of a merger up through the first two years of the union.

For example, back in 2005, US Airways fell 8% to an industry low after merging with America West. And just one year after purchasing Northwest, Delta Airlines’ customer satisfaction plummeted 10%.

When two companies merge, both sides begin shedding costs. These costs are usually customer-service focused. For example, a handful of branches might close following one bank’s purchase of another. In this event, customers may no longer receive the same level of service they’re used to.

There’s also the possibility of unexpected snafus. Maybe your frequent flyer miles get lost when two airlines merge and you’re arguing with customer service over how to get them back. Or maybe you get double-billed for cable services or wireless networks.

T-Mobile and Sprint are suggesting their merger will benefit customers. But a lot can go wrong when you combine large customer bases.

Perhaps Sprint customers will experience an uptick in customer service if the provider merges with T-Mobile, as they’ll move from an organization with the lowest American Customer Satisfaction Index score (65) among mobile network operators to the one with the highest mark (76) in the same sector. Then again, customers may have such high expectations for T-Mobile that the service they receive fails to live up to it.

3. The bargain basement

The best companies aren’t typically going out and acquiring other top companies. What usually happens is that subpar companies go out and purchase even worse companies. It’s a weird strategy.

Sure, they can acquire these low-end companies on the cheap, but is it really in their best interest to purchase another bottom-dweller? Probably not.

These companies already have dissatisfied customer bases. If the purchaser is not interested in improving satisfaction levels, then those customers might end up even less satisfied than they were before the merger – especially if they had high expectations for this union.

A lesson for the age of the large acquisition

The numbers don’t lie: Major M&A deals were on the rise in 2019. Global Payments bought TSYS for $21.5 billion. London Stock Exchange Group acquired Refinitiv for $27 billion. United Technologies agreed to purchase Raytheon for $86 billion. These are just a few of the transactions over $20 billion.

While the total number of global mergers was down in 2019, M&A value still exceeded $3 trillion every year since 2014. The merger market is expected to thrive in 2020 thanks to low interest rates and a better economic environment.

But before these organizations – particularly service-related companies – make decisions that are clearly geared toward influencing their balance sheet and adding to their portfolio, they might want to think about what this decision means for their customers.

You might be able to buy a customer base, but that doesn’t mean you’re buying its loyalty or you’re able to improve its satisfaction.

Do these automakers’ Super Bowl ads leave customers satisfied for the right reasons?

People tune into the Super Bowl for all sorts of reasons.

For some, it’s all about the big game itself. For others, it’s the extravagant halftime show.

But one thing that gets everyone hyped on Super Bowl Sunday is the commercials. This is the day brands break the bank and go all out.

According to AdAge, 30 seconds of airtime during this year’s game cost $5.6 million. While this seems like a ridiculous amount of money – and it is – this is a price companies were more than happy to pay.

One industry usually well-represented in Super Bowl commercials is the automobile industry. This year was no exception, as millions of screens across the world were plastered with funny, nostalgic, and inspirational auto commercials.

But you have to wonder, did automakers take full advantage of their airtime?

It’s one thing for the commercials to be entertaining – most usually are – but are they also informative? Are automakers listening to what their customers want and appealing to these needs?

Using our Automobile Report as a guide, we examined the commercials of three major automakers to find out.

Hyundai gets ‘smaht’

With the help of Chris Evans, Rachel Dratch, and John Krasinski, Hyundai used its Super Bowl airtime to plug its new Smart Park self-parking system. While these Bostonites laid the love on a little thick (and we’re not just talking about their accents), the move by Hyundai was wicked “smaht.”

Customers care about in-car technology, and the automobile industry is not meeting their high standards.

According to our report, satisfaction with technology is down 3% year over year and is toward the bottom of all industry benchmarks – tied with warranties for second-to-last place – with a score of 78.

Hyundai, for its part, also has room for improvement in this area. It scores above industry average, but compared to individual automakers, it’s merely middle of the road. By drawing attention to the new Sonata’s “Smaht Pahk” capability, Hyundai shows it understands customer needs and that it’s making a concerted effort to meet them. Like we said: smaht.

Toyota has room for all heroes

Cobie Smulders of “How I Met Your Mother” and “Avengers” fame is a super mom speeding around rescuing selfless superheroes who chose to stay behind after saving others from various catastrophes.

How does she save these heroic individuals? She picks them up in her roomy Toyota Highlander.

Interior design isn’t on the bottom rung of industry benchmarks, but it falls 1.2% over the past year to 82. Toyota scores just above average, so it too has plenty of room (pun intended) for growth.

Toyota uses alien attacks, chemical disasters, and a wild west showdown as backdrops to point out a simple fact that most car owners can agree on: Space matters. Bonus points for the final shot on the dashboard navigation screen. As we mentioned, customers crave enhanced technology.

Jeep shows there’s nothing mundane about ‘Groundhog Day’

Unlike in the cinematic classic, Bill Murray didn’t go down a rabbit hole of despair in Jeep’s commercial reenactment of “Groundhog Day.” This time, he had a Jeep Gladiator at his disposal.

Although driving performance (tied for first at 84) and exterior (82) rank highly among customer experience benchmarks, Fiat Chrysler’s Jeep struggles to keep up with the competition. The automaker falls below industry average in both areas.

With a commercial featuring Murray and Punxsutawney Phil tackling tough terrains in a sleek Gladiator, Jeep shows this vehicle is easy on the eyes and can handle any adventure life throws at you. Not only that, you look forward to it.

This ad played well with the press. Jeep can only hope it has the same effect on its customer base.

Commercials can offer more than just commercial appeal

As entertaining as these ads can be, remember that commercials and customer satisfaction are not the same thing.

Super Bowl commercials aren’t going to be successful if they’re not creative and memorable. But that doesn’t mean automakers should skip out on a golden opportunity to show they’re paying attention to things their customers want.

Customer satisfaction in the automobile industry fell 3.7% to a score of 79 over the last year. If automakers want to see those scores climb, they might want to take a page out of playbook of the companies tailoring their message to what’s really driving their customers.

Holiday travel: The good, the bad, and the frustrating

There’s something nice about going home for the holidays. That warm feeling of knowing you’ll get to celebrate the occasion with friends and family. It’s something we look forward to.

But you know what we’re not looking forward to? The travel. 

It would be so much simpler if you could just snap your fingers and be home for the holidays. But that’s not the case. Not even close.

For many – especially those who need to fly home – traveling is one of the most stressful parts of the season. But some parts are better than others.

Here’s what consumers report are the highs and lows of airline travel, according to our 2018-2019 Travel Report.

1. Internet travel services make booking easy

There are usually two categories of travelers: those who book their arrangements well in advance, and those who wait until the last moment to finalize their plans. While these groups have differing opinions on the “when,” here’s how they feel about the “how.” 

ACSI data show customer satisfaction with travel websites for booking flights, hotels, and car rentals is up 1.3% to a score of 79 (out of 100) per the 2018-2019 report. Customers appreciate how easy it is to book and make payments on these websites, and they notice improvements in both navigation and site performance since last year.

As far as individual companies, TripAdvisor debuts in the lead with an ACSI score of 82. The company is a trusted source of user-generated reviews. On the opposite end of the spectrum, Expedia’s Travelocity takes the biggest hit, down 4% to 77, while Priceline falls 3% to the bottom of the category at 76.

On the whole, internet travel services offer a wider variety of travel options, much-desired comparison and filter tools, and improved customer support. Even more impressive, with an ACSI score of 85, travel website mobile apps have the highest satisfaction in any industry. 

Customers are also quite satisfied with the airlines’ mobile apps. In fact, with an ACSI score of 82, this is the best part of the industry, tied with checking in. 

This makes sense considering these two elements go hand in hand. Customers can conveniently use mobile apps to book travel, check the status of their upcoming flight, and check in prior to boarding.

Among the three aspects of air travel that show improvement, the boarding experience leads the way with an ACSI score of 79. In the same vein, travelers continue to find airline staff – both at the gate and in-flight – courteous and helpful. During the stressful travel season, every touchpoint matters

2. To check a bag or not check a bag

That question has plagued travelers since the beginning of time. (We admit, we’re being a bit dramatic, but you know what we mean.) Customers face myriad problems regardless of what they choose.

Canva - Silhouette of Person in Airport

In this year’s Travel Report, “overhead storage” is among four new metrics tracked. The response is less than ideal.

As evidenced by the ACSI score of 73, customers are largely unhappy with the availability and size of overhead storage.  

Unfortunately, things aren’t much better for travelers who check bags. 

Checking a bag isn’t cheap. It’s even worse – for your wallet and customer satisfaction as a whole – if you’re required to pay for both your checked bags and carry-ons. It also doesn’t help that airlines are constantly hiking prices. But considering airlines have pulled in a little over $2.8 billion in baggage fees through the first half of 2019, don’t expect this to change anytime soon. 

Leisure travelers are much more frustrated with luggage fees than business travelers, who are able to expense the charges. But the fact is unless you’re planning to travel light, you should expect your baggage to be another form of “baggage.

3. Fasten your seatbelts, it’s time to take off

The turbulence doesn’t stop once you get on the plane.

Besides being frustrated with the lack of available overhead space, customers are less than enthusiastic about the in-flight food and beverage options, with complimentary and premium (purchased) options each earning an ACSI score of 73. 

Customers are even less satisfied with in-flight entertainment (71). But the worst part of flying remains seat comfort – with an ACSI mark of 69 – as passengers note legroom has not improved.

Of course, when it comes to the in-flight amenities, it’s worth mentioning that scores vary based on the individual airline. Delta, for example, is number one among legacy airlines, rising 1% to an ACSI score of 75. Most Delta flights offer USB ports and Wi-Fi and have seatback screens. 

Delta isn’t the only airline upgrading the in-flight experience. As of Jan. 30, 2019, all passengers on United Airlines flights have free access to DirecTV. American Airlines, for its part, is making it simpler for passengers to listen to their Apple Music by allowing access to their music on all domestic flights using complimentary Wi-Fi. 

Better to be safe than sorry

If you’re flying home for the holidays, and if you’re lucky, you might get to experience the perfect flight. It will take off on time, there will be plenty of overhead space, you’ll have ample legroom, the food will be delicious, and your choice of in-flight entertainment will be exceptional.

This is the dream. But it’s highly unlikely. The most likely scenario is that you’ll experience some combination of good and bad.

The best thing you can hope for is that airlines heed consumer concerns, make adjustments to improve satisfaction, and maintain the elements of travel that consumers appreciate the most. 

Happy holidays, and happy travels!

Health insurance satisfaction hasn’t been this high in a decade

Health insurance is a contentious topic, and everyone seems to have an opinion. The constant fear of rising premium costs doesn’t help matters.

So the fact that health insurance has an ACSI score of 74 – placing it in the bottom 10% of all industries measured – makes sense. However, what’s surprising this year is the score represents a rise of 1.4% to its highest level in a decade.

How did this happen, and what are some insurance companies doing to separate themselves from the pack? Let’s look.

Health care above all else

The lines between providing insurance and providing health care are beginning to blur. Insurers are prioritizing preventative care over emergent care. Companies like Humana are really taking this idea to heart.

Humana has a mail-order pharmacy, over 230 owned or alliance primary care operations, and a large home health care provider in Kindred at Home. Humana is also investing in digital technologies, including a multiyear partnership with Microsoft that’s all about “making health care experiences simpler to navigate” for its members.

Policyholders are taking notice of Humana’s efforts. Not only does the company lead all health insurers with an ACSI score of 79 (up 1%), but it also rates best in class for half of all industry benchmarks.

Like Humana, CVS Health’s Aetna, which inches up 1% to 76, is also embracing the use of technology to enhance health care. Aetna launched Attain, an Apple Watch app that lets Aetna members track their daily activity levels, offers personalized goals, suggests healthy actions, and rewards members for taking steps to improve their health.

The success of these companies’ digital initiatives is clear in the industry-wide customer experience benchmarks, where two elements stand above the rest: quality of mobile app (up 4% to 81) and reliability of mobile app (up 1% to 80).

ACSI-health-insurance-2019-companies

Companies struggling to keep up

Unfortunately, not all insurance companies are keeping up with patients’ growing technological demands.

Cigna, which drops 1% to 72, ranks near the bottom of the industry for both mobile quality and reliability. Blue Cross and Blue Shield (BCBS) rises 1% to an ACSI score of 71 yet finishes with the lowest score among health insurance companies. That’s due in part to poor scores for mobile reliability, perceived value, and billing.

Significant room for improvement

When it comes to the quality and reliability of mobile apps, Cigna and BCBS are anomalies. At the industry level, these benchmarks are distinguished among customer experiences.

Benchmarks like access to primary care doctors (79), access to specialty care doctors (78), standard medical services coverage (78) and expanded prescription drug coverage (77) are also contributing to the slight satisfaction rise in the industry.

However, while health insurance satisfaction is the highest it’s been in 10 years, in terms of ACSI standards, it remains much closer to the bottom of all industries measured. Suffice to say, it’s not all sunshine and roses for the insurance industry.

Insurance statements are still difficult to understand (75), the variety of available plans (75) could be better, and the timeliness of claims processing (75) still leaves much to be desired. And despite a 3% bump, call centers continue to be the worst aspect of policyholder experience with an ACSI score of 73.

So while customer satisfaction with health insurers is on a slight upswing, it has a long way to go.

The simple fact remains: The health insurance market is transforming, and companies that make patient health their main priority will succeed. Personalized plans, easier access to primary and specialty care doctors, and a focus on enhancing digital methods are good places to start.

Why you can’t always bank on your bank

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.

Canva - Woman Holding Black Smartphone With Black Screen.jpg

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.

A lesson from nondurable products: Bigger isn’t always better

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.

ACSI-nondurable-2019-allindustries.png
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.

Keeping it “personal” is the key to succeeding in the PC market

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.

ACSI-PCs-2019-companychanges

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.

The customer experience benchmarks that have automakers spinning their wheels

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.

ACSI-auto-2019-massmarkettech.jpg

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.

ACSI-auto-2019-luxurytech.jpg

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.

Why satisfaction with online news has never been higher

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.

ACSI-ebiz-newsbenchmarks-infographic.jpg

 

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.

Restaurant rivalries: Which coffee, Mexican food, and burger brands keep customers happy?

Will you get the better breakfast at Starbucks or Dunkin’? Does Chipotle or Taco Bell have higher quality Mexican food? Which burger joint has the fastest service?

While the ACSI can never answer these questions definitively, we can tell you what customers think about everything from food quality to store speed to mobile ordering.

When we look at scores for some of the biggest restaurant rivalries in the business, we get a new perspective on what’s working and where these brands could focus their efforts to improve customer satisfaction.

Starbucks vs. Dunkin: Top coffee brands face off on food

Last year, Starbucks and Dunkin’ were dead even in their overall ACSI customer satisfaction scores. This year, Starbucks inched up 1% to take the lead, 79 to 78.

In terms of beverage quality, Starbucks and Dunkin’ tie, but Starbucks has a slight lead in the variety of beverages. Where things get interesting is in the food. Both restaurants have been putting more resources behind their food offerings.

At its annual shareholders meeting in 2018, Starbucks revealed its intention to double its food business by 2021. Dunkin’ recently beefed up its breakfast options, debuting a new Egg White Bowl and Sausage Scramble Bowl to compete with the likes of McDonald’s, Taco Bell, and Panera, not to mention Starbucks.

Starbucks has a small advantage over Dunkin’ on food quality according to customers, but customers give Dunkin’ better marks for variety of food as it edges out Starbucks. These results aren’t in the same echelon as the two brands’ drinks, but it will be interesting to see how the scores evolve as both brands continue to expand and enhance their food menus.

One area where both are especially strong is mobile. Starbucks stands out for the quality of its mobile app, while Dunkin’ is close behind. Customers also give Starbucks higher marks for the reliability of its mobile app compared to Dunkin’.

Chipotle vs. Taco Bell: Digital and delivery from top Mexican food chains

Chipotle’s overall ACSI score plummeted in 2016 following its food safety crisis, and still hasn’t returned to its pre-crisis score, but it has shown incremental improvement, rising 1% this year to a respectable score of 80. Its same-store sales are also improving, up 10% in the first quarter of 2019. Taco Bell now sits at 75 after a 1% gain of its own.

Despite its struggle to return to its pre-crisis ACSI score, Chipotle still outstrips Taco Bell in food quality. And while Taco Bell has a strong showing in order accuracy, Chipotle again ranks higher.

Both restaurants are moving quickly to cater to a new generation of mobile-first customers seeking convenience. Both brands have launched delivery options — Taco Bell through GrubHub, Chipotle through DoorDash — and are ramping up digital operations.

But when rating mobile apps, Chipotle again is the clear winner, scoring high for both the quality and reliability of its mobile app, with Taco Bell lagging behind in both categories.

Wendy’s, Burger King, Red Robin, or McDonald’s: Who has the fastest fast-food burger?

Red Robin, in the full-service restaurant category, has the highest overall ACSI score among the four burger restaurants at 79. Among fast-food chains, Wendy’s leads with a score of 77, followed by Burger King at 76. McDonald’s sits at the bottom of all fast-food restaurants at 69.

When it comes to courtesy, the scores tell a similar story. One thing you don’t often see in the service industry is high scores for courtesy. But these burger joints are serving up a different trend.

Red Robin scores high for courtesy, followed by Wendy’s and Burger King close behind with respectable scores of their own. McDonald’s, however, lags the field in a distant fourth place.

McDonald’s has been trying to modernize its operations, adding self-order kiosks, digital menu boards, and curbside pick-up for mobile orders. So far those efforts haven’t improved its overall ACSI score, but did it do anything to improve its speed in fulfilling orders?

Not according to customers. McDonald’s scored well below the category average for speed of checkout or delivery. The fastest burger is from Wendy’s, but Burger King and Red Robin are close behind. Unlike the standout courtesy scores, the store speed for all four burger chains is pretty low across the board.

Does competition bring out the best of the brands?

Every one of these restaurants is making moves to improve and expand their menus, better cater to changing consumer tastes, and advance their mobile technology and delivery capabilities to serve customers the way they prefer to order and receive their food.

While brand rivals certainly fuel the strategy to some degree, restaurants should also make sure they’re listening closely to their customers, who are ultimately the only judge that matters in the competitive restaurant industry.