In the holiday season of 2016, retailers made gains in customer satisfaction with better service, but lighter foot traffic heralded the slate of store closings to come in 2017.
Better government websites, including updates to HealthCare.gov, help boost citizen satisfaction with the federal government overall in 2016. The gain is a welcome reprieve for U.S. federal services as it reverses three years of eroding satisfaction. In fact, ACSI data show citizen satisfaction reaching its highest level since 2012—up 6.4% to 68.0 on a 100-point scale.
Health and Human Services (HHS), which oversees implementation of the Affordable Care Act, experiences a significant uptick in user satisfaction (+8% to 67) compared with a year ago. Moreover, citizens interacting with HHS now account for the biggest slice of the ACSI respondent sample, which gives the department the prime responsibility for the 2016 government-wide satisfaction gain.
Departments at the high and low ends of the spectrum also show gains in user satisfaction for 2016. The popular National Park Service puts the Interior Department at the top (78), along with the State Department, which many Americans access for passport issuance and renewal. The low end belongs to Treasury (59), whose tax-collecting mission via the Internal Revenue Service is unlikely to appeal to most citizens.
Among the key aspects of government services tracked by the ACSI, website quality has improved the most, which shows that better e-government also contributes to higher citizen satisfaction.
January proves rough on plans for health insurance megamergers as two deals appear to be hitting barriers. The proposed union of Aetna and Humana has been blocked by a federal judge as being likely to reduce competition substantially. According to the Justice Department, less competition would lead to higher prices and lower quality. The merger of Anthem with smaller rival Cigna is expected to undergo a similar fate in court this month, prompting Anthem to push back its merger end date to April.
Given that the health insurance industry already has below-average customer satisfaction compared with all sectors and industries in the American Customer Satisfaction Index structure, it seems unlikely that more consolidation would give consumers the quality of service they crave. On a 100-point scale, the industry scores 72, which lags well behind the national ACSI average of 75.4 (as of Q3 2016).
Of the two mergers that are running into roadblocks in 2017, neither would bring together high-scoring entities. The health insurance leaders in 2016, Aetna and Anthem, would both be combining with companies that score at or below the industry average. For Anthem, Cigna would likely be a significant drag on policyholder satisfaction as the latter scores rock bottom for a second consecutive year. Cigna, despite its large year-over-year gain, still ranks in the lower 40 among 300+ companies in the Index.
Across the bank industry—from large national banks to small regional and community institutions—the customer satisfaction momentum in 2016 is positive. Banks overall surge 5.3% to a score of 80 on the ACSI’s 100-point scale. This rising trend is one of the more surprising results from the ACSI’s report on the Finance and Insurance sector as it holds true across nearly every big bank.
Smaller size, however, continues to distinguish the top tier as community banks and credit unions remaining pacesetters. In general, more personalized service and the ability to offer lower fees make for happier customers. Nevertheless, both super regional banks and national banks post substantial gains, with the latter moving up 6.9% to 77.
ACSI data show that big banks are making progress toward improving the customer experience. From the variety of financial services available to call center operations, national banks earn better ratings compared with a year ago. The critical website user experience is deemed more satisfying (up 2% to an ACSI benchmark of 85), but community bank websites set the pace at 88. When it comes to face-to-face contact, small banks earn the top mark for courtesy and helpfulness (91)—a level of excellence that staff at big banks have yet to attain (86).
Among the largest U.S. commercial banks, Citibank heads the field in 2016 with a 12% leap to 82, a score that rivals the satisfaction level of credit unions and nearly matches smaller community banks.
Wells Fargo slips out of first place for customer satisfaction not by suffering an ACSI decline, but by showing less improvement than its competitors. Adding just 1% to an ACSI score of 76, Wells Fargo is now below average. Closing in on Wells Fargo, Bank of America (+10%) and Chase (+6%) are tied at 75.
Stock performance for big banks mimics their ACSI changes. Since February, Chase, Citibank, and Bank of America have each shown solid gains, whereas Wells Fargo’s stock lagged its national competitors even before news of improper sales practices broke.
The health insurance industry is getting better at meeting policyholder needs as satisfaction rises 4.3% to 72 on ACSI’s 100-point scale. Among the big insurers, Aetna and Anthem tie for first place at 75 after posting large gains. Kaiser Permanente follows closely at 74, with Humana inching up to meet the industry average at 72. At the low end, Cigna trails the field at 67 despite earning this year’s biggest increase in policyholder satisfaction. This positive momentum is tempered by the fact that health insurers remain in the bottom dozen among 43 ACSI industries.
Nevertheless, ACSI data show that the industry is making strides in key areas of the customer experience. Policyholders are the most pleased with access to primary care doctors (ACSI benchmark of 80, up from 78 in 2015). Claims are easier to submit and coverage of standard medical procedures is viewed more favorably. Call centers also receive a higher rating, but show ample room for improvement (73).
Sears, once a stalwart American brand, is currently a shadow of its former self, having fallen on hard times with both shoppers and investors alike. Back in 2001, Sears was tied for second among department and discount stores in terms of customer satisfaction, according to the American Customer Satisfaction Index. Since then, the chain has managed to beat the industry average only once in 14 subsequent years.
Looking at the last decade of ACSI scores and stock performance for Sears, the period from 2009 to 2013 shows customer satisfaction trending upward by 4% while stock price falls over 57%. The reason for this outcome lies in the connection between stable, or even increasing, customer satisfaction and a dwindling customer base.
Customer satisfaction plays a vital role in competitive industries in large part because consumers can vote with their feet. That is, customers who do not like a company’s service can simply go elsewhere. The ACSI measures a company’s customer satisfaction by talking directly to the customers themselves. In situations where unhappy consumers leave en masse, the only remaining customers are the ultra-loyal.
In the case of Sears, these loyal customers are likely patronizing the store for reasons other than satisfaction, such as price, proximity, or tradition. In such situations, a rise in customer satisfaction can indeed coincide with a decrease in revenues—a red flag in terms of future financial performance. As dissatisfied customers defect to competitors, the diminished pool of customers includes a greater percentage of shoppers who like the experience for a specific reason. During the period 2009 to 2013, the rise in customer satisfaction for Sears coincides with a steady depletion in sales.
In recent years, even the most loyal Sears shoppers have seen their satisfaction decline. The company now ranks second-to-last among department and discount stores. With an ACSI score of 71, Sears beats only Wal-Mart at the low level of 66. In comparison, industry leaders Nordstrom and Dillard’s score 80 or higher. It is no surprise to see Sears report terrible earnings for the third quarter of 2016. For Sears, the challenge ahead lies with improving the customer experience. Unless the company succeeds in becoming more customer-centric, it is unlikely that Sears’ faltering financial position will turn around.
Apple personal computer and tablet owners have a long track record of loving their chosen product, checking in with a customer satisfaction rating of 84 for 2016 on the ACSI’s 100-point scale. While Apple’s ACSI leadership in the personal computer industry is well established, Samsung surges 6% to second place, just a point below Apple this year.
The tight race between Apple and Samsung mirrors the two companies’ battle in the cell phone industry. As reported by the ACSI previously, Apple and Samsung were deadlocked for customer satisfaction in 2015 and remain just a point apart in 2016 (81 and 80, respectively). The caveat for smartphone satisfaction, however, is that Samsung’s current score of 80 reflects customer evaluations from March, well before the release and disastrous battery failures and fires of its Galaxy Note7. The first Note7 recall in September was followed by a second recall that included all replacement phones, prompting Samsung to permanently halt production and sales of the Note7. In 2017, Samsung will likely take a major hit in customer satisfaction for its product meltdown, much like Toyota did when it recalled millions of cars starting in 2009 due to danger of sudden acceleration.
In terms of the personal computer market, smartphones pose a threat to PC sales as tablets have not been the longer-term solution for mobility that the industry may once have envisioned. Interestingly, Apple and Samsung have very different strategies regarding the future of tablets. Apple is targeting business customers on the go with laptop-like features for its iPad, while Samsung tablets occupy their own space as devices for entertainment and browsing, rather than laptop replacements. The number-three PC manufacturer for satisfaction in 2016 is Amazon, another maker of tablets. At 80, Amazon falls short of the PC scores turned in by Apple and Samsung, but it easily matches their most recent scores in the cell phone segment.
For the overall PC industry, customer satisfaction improves 1.3% to 78, driven by better scores for tablets and laptops. Customer satisfaction for desktop computers remains unchanged year-over-year at 81, ahead of both tablets (+4% to 78) and laptops (+3% to 77). While this could be a good sign for traditional PCs, there is also the possibility that a shrinking customer base is leaning toward the more loyal desktop users. Moreover, two of the three leaders this year—Samsung and Amazon—specialize in tablets and other mobile devices, not traditional PCs.
ACSI annual reporting shows the automobile industry bouncing back after three years of declining customer satisfaction. The overall industry is up 3.8% to 82 on ACSI’s 100-point scale, with scores tightening between domestic and international manufacturers.
While foreign-made autos have long held the customer satisfaction advantage, domestics are catching up, rising to 81 overall compared with Europe and Asian carmakers at 82.
Among domestic automakers, Ford keeps its lead, stepping up to 84, followed by GM (81) and Fiat Chrysler (78). Although U.S. auto sales were down in August, with signs that demand may have peaked, the good news for Detroit is that higher levels of customer satisfaction will make American autos more competitive.
Luxury cars have dominated the driver satisfaction rankings for years, but the industry’s top tier is now evenly split between mass market and luxury vehicles. Brand exclusivity may no longer be enough for luxury plates if consumers are finding little difference between premium and lower-priced vehicles. Across the top 10 plates for customer satisfaction, Ford’s Lincoln leads at 87, with Honda at 86. German luxury plate BMW is deadlocked with Toyota-branded vehicles at 85, while GMC and Subaru lock horns with upscale Infiniti and Lexus (all 84).
The fast food experience is on the upswing with consumers in 2016, as higher quality drives improving scores for the industry.
ACSI Presidential Election Survey: October 31 to November 3, 2016
As a tumultuous election season draws to a close, ACSI’s latest polling shows the two presidential candidates in positions that vary little from initial surveys conducted early August. With just days to go before November 8, Democrat Hillary Clinton’s projected voter share stands at 48% to Republican Donald Trump’s 41%. This final popular vote count is closely aligned with ACSI’s inaugural survey projection of Clinton 49% and Trump 39%.
Over the course of the survey cycle, Clinton consistently has shown an advantage over Trump, with the narrowest spread occurring just after Labor Day (5 points). In the election’s final week, the gap is 7 points in Clinton’s favor.
The ACSI survey characterizes supporters as “strong” or “weak” depending on the gap in both satisfaction and expectations for each of the candidates. In the polling conducted between October 31 and November 3, 2016, Clinton loses some strong support, down 4 points to 35%, while Trump shows a slight uptick to 29%. For weak support, both candidates gain 2 points but remain nearly deadlocked at 13% (Clinton) and 12% (Trump). Undecideds increase for a second week to 12%.
The final demographic breakdowns of voter share have Clinton ahead in nearly every age, gender, and ethnic category. Consistent with most prior weeks of polling, Trump carries the advantage among older voters and those with less than a college degree.
The ACSI surveyed 1,543 registered voters nationwide from October 31 to November 3, 2016, for a total of 15,220 since polling began on August 1, 2016. The margin of error is +/- 3 percentage points for voter share.