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.

Why limited-service chains were better positioned for the pandemic than full-service restaurants

The restaurant industry is facing unsettling times.

Customer satisfaction with full-service and limited-service restaurants dropped 2.5% and 1.3% respectively this year, and the Accommodation and Food Services sector overall diminished 1.3% to a score of 77.9 (out of 100), per our most recent Restaurant Report.

This was all before COVID-19. Now, the situation is even more dire.

From March to May 2020, the industry lost $120 billion, according to the National Restaurant Association. This figure could double by the end of the year.

Yet, while sit-down chains remain slightly ahead of fast food restaurants (79 to 78) from a customer satisfaction standpoint, this might not be the case next year.

The delivery paradox

Since COVID-19, takeout and delivery options have become a full-blown necessity. But customers were turning to delivery even before the pandemic arrived, and full-service restaurants have been trying to adapt. By mid-2019, nearly four in five brands used an online ordering platform.

Unfortunately, online ordering from full-service restaurants hadn’t caught on before the pandemic hit.

According to our survey, completed between April 2019 and March 2020, 92% of respondents reported dining in at sit-down establishments, compared to 6% ordering carryout and 2% choosing delivery. Furthermore, customers are more satisfied when dining in (78) at full-service restaurants than getting takeout (75) or delivery (77).

When customers were forced to choose between takeout and delivery, full-service restaurants’ apps might not have lived up to expectations. While diners agree that overall quality of mobile apps from full-service restaurants is better than those of fast-food chains (85 to 81), the reliability of those apps tells a different story.

Although the segments share the same score for mobile app reliability (81), full-service chains plummeted 6% while fast-food chains improved. As our data consistently show, the more satisfied customers are, the more willing they are to increase their restaurant spending in the future.

Many fast food restaurants had the technology and the habits in place before the pandemic. Subway, whose overall score remained unchanged overall, had the top-rated mobile app for quality. This is good news in its efforts to adapt to consumer preferences, especially after the company closed more than 1,000 U.S. locations in 2019.

Domino’s is reaping the rewards of having its own digital platform for ordering and delivery. The new pizza segment leader, at an ACSI score of 79, earned 70% of its total U.S. sales in 2019 via digital. It also boasts a database of over 85 million customers.

If full-service restaurants can’t follow suit to fulfill customer’s delivery needs during the pandemic, they may struggle to regain trust down the road.

Takeout troubles

Takeout is the bread and butter for fast-food chains. Nearly 70% of their business comes from drive-thru lanes, which are built for quick, contactless meal distribution.

Without drive-thru in their arsenal, full-service restaurants have been trying alternative takeout methods. Unfortunately, save for Applebee’s, many full-service restaurants didn’t have designated curbside pickup programs in place prior to the pandemic.

Some were unprepared for the influx of orders. TGI Friday’s had to convert its headquarters into a call center because it lacked a sufficient number of phone lines to handle demand.

On top of that, many customers have been less satisfied with full-service restaurants in many of the customer experience benchmarks that apply to both dining in and takeout. The courtesy and helpfulness of staff was down 3.4% to 84, and the speed in which food is received was down 2.4% to 80.

Full-service has no time to waste

The full-service restaurant industry was having trouble before COVID-19. But the pandemic may have exacerbated the segment’s shortcomings, from its falling mobile app reliability to its relative lack of experience with takeout and delivery.

Customer satisfaction with limited-service chains was also deteriorating, but these chains are built for contactless delivery and pickup.

Even as restaurants open for in-person dining, the need to adhere to social distancing guidelines and other safety precautions will make it so the dining-in experience will never be the same. This will make efficient delivery and takeout even more critical.

The writing’s been on the wall for the restaurant industry for a while now. Those that truly embrace the power of digital for delivery and takeout are more likely to weather the storm.

Securing better in-home Wi-Fi: Why ISPs have an opportunity in the hardware department

Internet service providers (ISPs) are at the bottom no more.

A year after tying for the lowest score in the American Customer Satisfaction (ACSI) rankings, customer satisfaction with ISPs soared 4.8% to a score of 65 (on a scale of 0 to 100), according to our most recent Telecommunications Report.

Eight of 11 providers improved. Verizon’s Fios led the industry with a 4% jump to 73, while Comcast’s Xfinity made the biggest leap, moving into third place with an 8% surge to 66 – and almost every facet of the customer experience improved compared to last year.

That’s the good news. The bad news?

ISPs, which have historically ranked low on the ACSI scale, only climbed into second-to-last place, and except for mobile app quality (79) and reliability (77), most benchmark scores remain low, ranging from the upper 60s to the lower 70s.

The data are a blueprint for how ISPs can address a pressing customer need right now. The question is, will they use it?

ISP-provided equipment is no match for hardware from third parties

For the first time, we measured the in-home Wi-Fi experience, comparing customers’ experience with ISP-provided equipment with those who use third-party equipment.

For the most part, it was no contest.

While ACSI scores for Wi-Fi security were comparable (75 for third parties versus 74 for ISPs), customers using third-party equipment were far more satisfied across the board.

They were happier with the range (75 versus 72 for ISPs), reliability of service (75 versus 71 for ISPs), how quickly equipment restarted (74 versus 69 for ISPs), and most notably, cost (72 versus 66 for ISPs).

This is hardly unexpected. After all, equipment is the bread and butter for these third-party companies.

However, if there was ever a time for ISPs to put resources into improving in-home equipment, it’s now.

Quality in-home Wi-Fi has never been more important

In-home high-speed internet service, once deemed a luxury, is now in nearly three-quarters of American households. But it’s often taken for granted.

That changed when COVID-19 relegated workers and students to their homes, switching quality high-speed in-home internet from a luxury to a necessity. ISPs have room to grow in this area as well.

This year, we also measured overall Wi-Fi quality for the first time. We based the scores on seven benchmarks: security, multiple device connections, range, avoiding service loss, service restart, upload/download speed, and price paid.

Verizon Fios had the highest score overall (77) but was the only ISP to outperform the top third-party leaders, Netgear and TP-Link, both at 75. LinkSys (73) outpaced the remaining ISPs as well, while Xfinity (72) was the only other ISP to beat a third-party company, narrowly besting ASUS (71).

Although the numbers don’t bode well for ISPs, there are bright spots. For example, ISP customers were happier with the variety of available internet plans this year, and they found internet service more reliable.

If ISPs can make progress in those areas, then there’s no reason why they can’t make similar gains in the hardware department by offering more reasonable equipment rental prices and improving the reliability of in-home Wi-Fi.

It starts at home

ISPs are no longer resigned to the cellar of the ACSI rankings. They’re not exactly a fan favorite, either.

But, with more people working from home, more students studying from home, and more people simply forced to be home, they’re going to require – and expect – a reliable in-home connection like never before.

ISPs shouldn’t expect to wipe away years of customer satisfaction woes overnight by solely improving the equipment they provide. But it’s an opening that could slowly bridge the gap. Will they take it?

Cell phone manufacturers hit all-time high for customer satisfaction

Customer satisfaction with cell phones has grown steadily over the past 15 years. During that time, the industry’s made a 16% net gain.

That upward trend continued throughout 2019 and in the early parts of 2020. Although global cell phone sales dropped 1% in 2019 and the pandemic hasn’t helped in 2020, customers have never been more pleased with their cellphones.

Per our most recent Wireless Service and Cellular Telephone Report, customer satisfaction with the industry improved 1.3% to an all-time high of 80, and most of the manufacturers showed gains.

Apple surged to the top spot in the category with a 1% jump to 82. LG also improved, climbing 1% to 79. Even the group of smaller manufacturers rose 4% to a score of 75.

The key to this success? Making incremental improvements across the board.

Focusing on multiple areas pays off

The industry scored well across almost every element of the customer experience last year, but this year it did even better.

Cell phone users agreed that their devices were better in most ways. While the ease of texting (85) and calling (84), and phone design (84) remained steady and enjoyable for customers, websites climbed 2% to 84.

And it didn’t stop there. Customers were increasingly pleased with the operating systems and software (up 2% to 83) and found navigating menus and settings much easier (up 2% to 83). Phone features (up 1% to 83), video quality (up 1% to 83), and audio quality (up 2% to 82) were all better. And, while battery life still sits at the bottom of the customer experience benchmarks, it’s no longer a glaring weakness after climbing 3% to a score of 80.

Cell phone manufacturers showed the power of improving multiple areas. Apple, which consistently gets chastised for poor battery life, took that criticism to heart and made serious improvements with the iPhone 11 Pro and Pro Max. But Apple didn’t stop with the battery – it also enhanced the camera system, displays, and processors. And folks took notice.

Apple customers were happier with their device’s battery life, audio quality, and video quality, as well as ease of using the operating system and navigating menus and settings.

LG customers were also more satisfied this year. They found texting and navigation easier compared to last year, along with more phone feature varieties, and better audio and video quality, which has become a staple of LG phones.

The smaller group of cell phone manufacturers made customers happier in nearly every aspect, including improving battery life and making texting and calling easier.

As effective as this strategy proved to be, it wasn’t adopted by everyone in the industry.

Motorola misses the mark

While cell phone users have never been happier with their devices, Lenovo’s Motorola customers were the exception.

The manufacturer fell to fourth place as satisfaction plummeted 4% to score of 77.

Not a single customer experience benchmark improved year over year. In fact, they all decreased – with significant falls in terms of battery life satisfaction and ease of calling and texting. Putting so much emphasis on the design element (flip phones, anyone?) was clearly not an ideal strategy.

Motorola has work to do in the eyes of its customers. The good news is its competitors have shown the way.

There’s no silver bullet to customer satisfaction success

Cell phone manufacturers reached an all-time customer satisfaction high score because they didn’t just focus on one element – they looked at the entire user experience. Users care about battery life and phone design, but they also care about what these products were made for in the first place (i.e., calling and texting). All of these elements need attention.

For the most part, manufacturers saw what their customers wanted — all of it — and made concerted efforts to improve. And, according to the data, they succeeded.

2 opportunities for Quibi, HBO Max, and Peacock to compete with Netflix and Hulu

There’s an insatiable appetite for streaming – especially now.

According to a recent Nielsen report, Americans streamed 85% more minutes of video in March 2020 than they did in March 2019. During the last week in March, Netflix owned the largest share of streaming minutes at 29%, followed by YouTube (20%), Hulu (10%), and Amazon (9%).

New streamers are also entering the space, even in the midst of the COVID-19 outbreak.

Quibi, the short form, mobile-only video platform, launched April 6 and had 1.7 million downloads in its first week. HBO Max remains on schedule for its May release. Peacock, NBC Universal’s new streaming service, soft launched on April 15 and is still committed to its July 15 national rollout.

These new entrants are jumping into a competitive streaming service industry, where customers are already relatively satisfied with existing options and features, according to our data.

So where are the opportunities for streaming companies – especially the new entrants – to stand out from an increasingly crowded pack? And more importantly, what do viewers want more of from their streaming services?

Here are two ways streaming services can get in with the binge watchers of the world.

More current offerings, please

Customers like what they’re getting from streaming providers. According to our data, they’re satisfied with the number of TV shows (scoring 76 on a 0-100 scale), the variety of TV shows and movies (both 75), the availability of the past season’s TV shows (74), and the number of movies (74).

So, what’s missing from the queue? Current programming.

When it comes to the availability of the current season’s TV programs and new movie titles, today’s streamers have room for improvement. The former has an Index score of 72, while the latter sits at the bottom of the industry at 70.

By offering customers the latest and greatest of film and television, new players can distinguish themselves.

Keep the original content flowing

Customers appreciate originality.

Over the last year, customer satisfaction with the quality of original content has climbed 3% to a score of 76. And no streamer offers original content like Netflix.

Not only did Netflix top all streaming services in satisfaction with its original content, but it has no intention of slowing down. Analysts predict the streaming giant will spend $17.3 billion on original content in 2020 alone.

Although other streamers like Amazon, Hulu, and YouTube are producing original work, there’s a legitimate gap between Netflix and the rest.

While Peacock’s original content may be a bit delayed due to the coronavirus, other incoming streaming services can fill the void – even Quibi, whose shorter content might be a nice change of pace if you’re looking to sneak in a quick episode before bedtime, while cooking dinner, or during a lunch break.

Are you still watching?

The current situation has accelerated a trend that’s been happening for the past two years, with more consumers cutting the cord than ever before.

This is not going to change anytime soon. In fact, analysts predict that the adverse economic and social implications brought about by the COVID-19 outbreak is only going to speed up the process.

The streaming industry is a crowded space. Established players already have a leg up on the competition, but the race isn’t over yet. There’s plenty of opportunity to make up some ground. New competitors would be wise not to let it pass them by.

Stay tuned for our newest Telecommunications Report, coming in June, for more details on how streaming industry players are faring.

3 tips to manage customer expectations during coronavirus

Business as usual has changed.

Some industries – and brands for that matter – are feeling the effects more than others. Travel, restaurant, and retail companies that rely heavily on in-person traffic are bracing for revenue shortfalls. Meanwhile, the federal government weighs stimulus packages to offer distressed businesses some relief.

In this environment, it’s tough to offer any substantive advice to businesses in survival mode. But history and experience offer three fundamental reminders on how businesses can serve customers and meet expectations in this difficult and unprecedented time.

1. Pivot to digital

Seemingly every day the number of people allowed to congregate in public shrinks in order to shield the public from COVID-19 exposure. States are requiring non-essential businesses to close their doors and advising citizens to shelter in place. “Social distancing” is our new reality, and it’s forcing many retailers to shift (or bolster) their digital strategies.

Our data has shown online is more satisfying than in person interactions in retail, and for at least the next several weeks it’ll be more important than ever for companies to maintain these channels. In the early days of the pandemic, restaurants and even some retailers began enabling customers to order items ahead from their digital apps for parking lot pick up. Others are using push notifications and other online channels to keep customers informed on the availability of products and services.

You’ll have to be nimble, of course, but make sure your customers know that, while they can’t necessarily go about business as usual, you still have the capabilities to offer them the services they’re used to.

2. Communicate frequently

Now more than ever, your employees and customers need to hear from you. They need to know they can reach you with questions and concerns.

Have customer service representatives available (remotely!). While customer support services like live chat, help pages, and cell centers haven’t always lived up to expectations, it’s certainly better to make these resources available rather than leave customers in the dark. If anything, use this as an opportunity to strengthen communications.

Send reassurance emails with key information to put your customers’ minds at ease. For example, make individuals who prefer going to a branch for their banking needs aware of your mobile app’s capabilities. Remind them that they can still access their banking information online and tell them what services are available.

These are unusual times in that many companies, by law, aren’t able to operate as usual. In the end, customers will likely understand this, but that doesn’t mean they won’t have questions. Be proactive and responsive to their concerns to maintain your customer relationships in the long run.

3. Don’t increase prices without increasing value

The coronavirus is negatively impacting the global economy. Businesses are losing money and the situation may get worse before it gets better. Yet, even if you’re among the industries suffering the most, don’t take advantage of the crisis.

This is not the time to raise prices – without offering better quality – just to offset predicted losses. If you must suspend service, ensure you have a plan to make up for this inconvenience, whether you prorate refunds, extend return policies, offer future credit, or waive change fees.

During this difficult time, we need to come together and do what’s best for the collective good. It’s one of the reasons why Amazon has been removing third-party sellers who are charging insane prices for cleaning products during the outbreak.

Adapt, overcome, and survive

The coronavirus outbreak is disrupting our lives in ways we never imagined, and we’ll feel its effects for some time. But we will get through this.

Keep your customers in mind, communicate frequently, and be flexible. If you have the means to do so, don’t be afraid to innovate to meet and help customers where you can.

While business has fundamentally changed in a couple short weeks, these three elements hold true and will help you weather whatever comes next.

Going beyond green initiatives: Why the energy utilities sector needs to better support local communities

The energy utilities sector knew what it had to do to improve satisfaction. The people made that very clear.

Last year, when customer satisfaction fell 2.7%, we observed a strong desire for green initiatives. While fixing this area wouldn’t automatically repair the strained relationship between customers and utilities, it would go a long way toward showing that providers not only hear their customers’ concerns but are actively making concerted efforts to improve.

Unfortunately, it appears little has changed.

The grass still isn’t greener

Once again, energy utilities sustained a sector-wide drop in customer satisfaction, falling 1.5% to an American Customer Satisfaction Index score of 72.1 (on a scale of 0 to 100), according to our most recent Energy Utilities Report. And that “green” problem? It’s still there.

In the three categories of energy utilities – investor-owned (down 1.4% overall to 72), municipal (down 1.4% overall to 72), and cooperative (down 2.7% overall to 73) – efforts to support green programs is either the worst or tied for the worst customer experience benchmark.

Overall, investor-owned utilities earned a 70, municipal utilities took home a 69, and cooperative utilities, while finishing with the highest mark at 71, still saw customer satisfaction plummet 4%.

Providers like National Grid, American Electric Power, and PG&E score well below the investor-owned utilities average for green initiatives. The same goes for the group of smaller cooperatives and smaller municipal utilities, which score in the mid-to-high 60s.

Unfortunately, a lack of support for green programs isn’t the only thing hindering customer satisfaction.

Missing out on a sense of community (support)

Customers believe utilities providers could be doing more to support local communities – much more.

Within the investor-owned utilities category, efforts to support the local community is the lowest customer satisfaction benchmark – tied with efforts to support green programs – at 70. National Grid, American Electric Power, and PG&E struggle in this area too. But they’re not alone.

Eversource Energy and FirstEnergy also have plenty of room for improvement among investor-owned utilities.

Municipal utilities providers perform better than investor-owned utilities in this area – but not by much. The industry scores a 72, down 3% from the previous year.

While cooperatives remain the sector leaders for supporting their local communities, they’re doing worse than they did a year ago, dropping 3% to an Index score of 74. Smaller cooperatives have the most room for improvement here as well.

Change in business values

Although the energy utilities sector isn’t offering customers the sort of support they crave for green initiatives or local communities, many of America’s top business leaders are starting to see the light.

Fortune 500 CEOs – 181 of them to be exact – signed a letter showing these very things are important to business. Instead of prioritizing shareholders and maximizing profits, the “purpose of a corporation” needs to center on investing in employees, delivering value to customers, and supporting outside communities through sustainable endeavors.

“Major employers are investing in their workers and communities because they know it is the only way to be successful over the long term. These modernized principles reflect the business community’s unwavering commitment to continue to push for an economy that serves all Americans,” said Jamie Dixon, chairman and CEO of J.P. Morgan Chase and chairman of Business Roundtable, the group of CEOs from major U.S. corporations who released this statement.

While profits will always be part of the equation, top American business leaders recognize how important it is to do right by their customers.

It’s time to listen and act

For the second consecutive year, there’s widespread customer satisfaction decline across the entire energy utilities sector.

All three categories of energy utilities saw their overall scores drop and every aspect of customer experience either declines or remains unchanged. And at or near the bottom of it all is support for green programs and local community.

Once again, energy utility providers know what they must do. Not only are their customers telling them their needs, but other U.S. corporations are preaching a change in values and business practices.

Retail wars: How does brick and mortar stack up in a battle against its online retailer?

If the Retail Trade sector were a kingdom, then online would sit firmly on the throne.

According to our most recent Retail and Consumer Shipping Report, while the sector evens out following two years of decline, only one industry sees its customer satisfaction soar: internet retail, up 1.3% to a score of 81.

Customers continue to chase the best, most convenient shopping experience available, and right now online is king. Customers can find what they need more easily and aren’t pestered by salespeople. When you look at online versus brick and mortar head-to-head, online wins every time.

Given this idea that “online wins every time,” we decided to compare three online retailers with their brick-and-mortar counterparts to see how well this held up. Here’s what we found.

Target.com vs. Target: Same score, different story

Despite dropping 3% year over year, Target.com maintains the same score as its counterpart in the department and discount category, both at 78.

Among internet retailers, ease of checkout and payment process (86) is the highest individual benchmark. On the contrary, this metric finishes dead last among department and discount stores with a score of 71. This trend holds true when comparing Target.com and Target.

Target.com is near the high end of internet retailers in store speed. The physical store, however, while among the better performers in the department and discount store space, still trails its online counterpart by a wide margin.

Although customers agree that online retailers possess a stronger variety of merchandise (84 to 77) and availability of inventory (82 to 75) than department and discount stores, Target.com and Target buck the trend, sharing the same score in both respects.

In the end, despite trailing internet retail leader Amazon (83), Target is making a concerted effort to boost its online presence. Target.com is expanding its same-day delivery service and creating its own “Deal Days” online event in the vein of Amazon Prime Day.

Nordstrom.com vs. Nordstrom: Traditional retail gets online bump

Only three companies boast scores above the internet retail industry average. The one traditional retailer? Nordstrom.

Nordstrom.com improves 1% to a score of 82, besting its brick-and-mortar counterpart, which remains unchanged at 79. Nordstrom.com outpaces Nordstrom in most individual benchmarks, including variety and inventory.

One of the biggest disparities between the physical store and its online counterpart is the ease and speed of the checkout process. Both thrive within their respective categories, but Nordstrom.com is significantly better than Nordstrom. In fact, Nordstrom.com is tied for the top score among all internet retailers.

Sears.com vs. Sears: Started at the bottom …

… and they’re both still there. Sears.com and Sears each have the lowest customer satisfaction scores in their respective categories.

Although Sears rose 1% among department and discount stores to a score of 71, it still sits below internet retail bottom dweller, Sears.com, which stayed put at 73. Sears.com also remains higher than Walmart’s department and discount store, which dropped 1% to 71 as well.

Sears.com offers slightly better variety than the brick-and-mortar store and stocks a greater inventory. Customers also give Sears.com the edge in speed and ease of checkout.

One area where Sears outshines its online brethren is with its support. Customers find Sears’ in-store staff more helpful and courteous than that of online customer support. This is interesting considering the opposite holds true for the two categories – internet retail and department and discount stores – as a whole.

The big picture is clear

The Retail sector experienced widespread declines last year. Just one year later, the message is crystal clear: Online shopping is the focus.

While traditional retailers aren’t falling by the wayside, more and more companies recognize their customers continue to shift toward the internet. The online shopping experience is easy, convenient, fast, and there’s no salesperson physically chasing you around the store trying to get you to buy something.

The retail battle may wage on as brick and mortar isn’t going away. But as it stands, this is a pretty one-sided affair.

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.