Website Woes Make Citizens Less Happy With Government

The bumpy rollout of made headlines in 2013, but ACSI research indicates that widespread downturns across many federal government websites contribute to lower citizen satisfaction with government overall. According to January’s ACSI Federal Government Report 2013, citizen satisfaction with federal government services is down 3.4% to 66.1 (on a scale of 0 to 100) as compared with 2012. This decline erases two years of consecutive gains for the federal government and leads to further erosion in general trust—down 19% from 43 to 35 in 2013.

While general trust in government has been weak over several years, citizens who directly experience federal services show much higher trust in government. In 2013, the ACSI benchmark for agency trust is 67, although this measure also declines—down 6% compared with a year ago.

Since the E-Government Act of 2002, more and more citizens come into contact with government services online. Among all users of federal services in 2013, 35% favored websites as their communication channel, a proportion that exceeds the next two channels combined (office visits at 11% and telephone at 19%).

While e-government represents a less costly and more efficient means for delivering public services, it is getting harder for the federal government to keep up with growing demand while maintaining satisfactory service. For example, the negative impact of the troublesome launch of reverberates at the department level, as Health and Human Services overall drops 4% to an ACSI benchmark of 66.

Declining satisfaction is not limited to a single government website. In aggregate, citizen satisfaction with federal websites is down 3% from an ACSI benchmark of 74 in 2012 to 72. Overall, users find government sites to be more difficult to navigate, less reliable, and the information less useful than a year ago. As the reach of e-government grows, any further slips in this channel will continue to have a strong impact on both citizen satisfaction and citizen trust with the federal government.

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What Will It Take to Keep Policyholder Satisfaction on Track?

As 2013 drew to a close, the ACSI issued its annual report on the Finance and Insurance sector, which showed across-the-board gains for three categories of insurance. Top improvement went to property and casualty insurance, up 3.8% to an ACSI benchmark of 81. This dovetails with the P/C insurance industry reporting its “best year since the financial crisis;” nevertheless, industry experts anticipate “more headwinds” going into 2014.

Health insurers face even greater challenges ahead, as the marketplace undergoes an expansion of historic proportions with the advent of the Affordable Care Act. Like P/C insurers, health insurers did a better job of satisfying customers, but with a modest gain of 1.4% to a much lower ACSI score of 73. Policyholder satisfaction for life insurers hit the high mark of 83, but the industry’s 2.5% gain came mainly from an upswing with smaller companies, who continue to outperform the larger carriers.

Looking at what each group does best, P/C policyholders respond positively to their local agents—giving them strong ratings of 87 for courtesy and helpfulness with policy purchases and 85 for claims handling. On the other hand, discounts and rewards are somewhat lacking (77), as customers seek better value from industry pricing. Life insurers are efficient when it comes to policy approval (87), but fall even further behind on discounting or bundling policies (74). For health insurance, policyholders are happy with their access to primary care doctors (82), but crave more plan choice (71)—a factor that may be as much about the limits of employer plans as it is about the providers themselves.


Billing, timeliness, and website quality are key elements that impact the policyholder experience for all insurance types. According to customers, P/C insurers excel when it comes to understandable billing statements (85) whereas health insurers do not (75). Given the complexity of billing medical procedures and calculating deductibles and copays, this is hardly surprising. Nevertheless, this clearly is an area where companies could gain an advantage by developing more user-friendly processes.


P/C insurers also are adept at offering high quality, multichannel solutions for communicating about policies and claims. The industry’s website satisfaction (83) and call center satisfaction (81) are much higher than the national ACSI averages of 78 and 74, respectively. For life insurers, website satisfaction also is above average (81). Across multiple channels, health insurers lag behind, just as they do for billing statement clarity, with website satisfaction at 73 and call center satisfaction at 72.

ACSI Finance and Insurance Report 2013 »

Customer Satisfaction and the 2013 Stock Market Anomaly

The idea that customer satisfaction doesn’t matter, or that poor customer service is a road map to stock market success, is the stuff that satire is made of. Just ask Stephen Colbert.

A recent article in Bloomberg Businessweek suggests that customer satisfaction has no relevance to stock price. Thirteen years of ACSI data suggest otherwise, as shown by the historically positive relationship customer satisfaction has had with stock price. There are good reasons why satisfaction matters. Common sense dictates it is better to have satisfied loyal customers than to have dissatisfied defecting customers.


Source: S&P 500 from Standard & Poor’s at

That said, for 2013 (and for 2013 only), it is correct that the worst companies in the ACSI have beaten the best ACSI companies in terms of stock returns. This anomaly is due to the fact that investors have favored low-priced stocks (which have performed poorly in the past) over high-quality stocks (which are, appropriately, priced higher). In that sense, what we have is a junk rally.


Source: S&P 500 from Standard & Poor’s at

The junk rally phenomenon is explained in another Bloomberg Research piece, “Junk Glistens Under ‘Bernankecare’ as Worst Stocks Win.” According to the article, the Federal Reserve’s near‐zero interest rates, combined with asset purchases exceeding $3 trillion, are “causing parts of the market to behave strangely. Stocks of companies with weak balance sheets are rising twice as fast as stronger ones; junk borrowers get rates lower than their investment‐grade counterparts did before the credit crisis; and initial public offerings are doubling on their first day of trading.”


Some investment experts foresee trouble when the market comes to its senses. This may not be the “irrational exuberance” the market experienced during the dot‐com bubble of the late 1990s, but cheap money and a year‐long stock market rally where investors are looking for cheaper buys are trumping the fundamentals…for now.

Credit Union Members Happier, But Crave More ATMs

Do you plan ahead when you need to hit the ATM? If so, you may not be alone. The latest report on customer satisfaction with credit unions and banks shows that overall, customers are happier in 2013 with the quality of service for their checking and savings accounts or loans. The bank industry returns to a pre-recession high of 78 (scale of 0-100), while credit unions climb 3.7% to 85—sharing this year’s top slot for customer satisfaction with televisions and video players.

Although bank fees have been rising for 15 straight years, customer satisfaction has not suffered this year. Consumers, however, may be savvier when it comes to avoiding these costs by relying on their own banks’ ATMs or keeping ahead of minimum balance requirements. Credit unions are starting to add more fees, but their superior service shines in comparison to banks across a multitude of customer experience benchmarks, except—you guessed it—ATMs. The number and location of branches are also big drawbacks for members, but like smaller banks, credit unions are unlikely to compete with megabanks when it comes to offering bricks-and-mortar.


Banks and credit unions both receive high marks for customer service at branches and for online banking—but the edge stays with credit unions. Credit unions far outperform banks when it comes to competitiveness of interest rates, and their more personal touch is apparent in their higher score for call center satisfaction. Aside from branches, the chink in the armor for credit unions remains their more limited ATM offerings. If this drawback is addressed, it would likely push the industry’s already top-notch member satisfaction even higher.

Are Luxury Hotels Always Better?

For the hotel industry, the ACSI measures 10 customer experience elements—from ease of making a reservation and check-in to food services, in-room entertainment and staff courtesy. Across five lodging types (economy, midscale, upscale, upper upscale, and luxury), reservation and check-in processes function well, with scores ranging from 84 for economy to 90 for luxury properties.


Ratings for loyalty programs, Internet service, and staff courtesy show little variation for midscale through luxury. In fact, staff courtesy for luxury brands ties that of midscale chains at 86. Guest satisfaction among hotel types varies the most when it comes to room cleanliness and comfort, food services, and hotel amenities.


As expected, luxury hotels come out on top and economy properties at the bottom across nearly all aspects of the customer experience, according to their respective guests. There is opportunity, however, for midscale and upscale properties to create services that offer guests an experience that compares well with upper-upscale and luxury hotels by focusing on the most salient aspects: room quality, food quality and on-site amenities such as pools, fitness rooms and business centers.

Read more about the hotel industry in the ACSI October 2013 e-newsletter article, Marriott Hospitality Shines in New Hotel Brand Study.

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Social Media Advertising Not Making Friends With Consumers

In spite of a staggering 20% increase in user volume over the past year, user satisfaction with social media websites at 68 is still one of the lowest-scoring industries among all those measured by ACSI. It surpasses only Internet service (65), which indicates that users are displeased with multiple components of their online experience.

So what reasons do users most often cite as the cause for their low satisfaction? According to ACSI’s July 2013 report, the main contributor is an increase in advertising on social media sites. Other concerns include wariness about privacy violations and unhappiness with the ease of interface use.

Wikipedia, the leading company for a fourth straight year at 78, is notable for its lack of advertising and easy-to-use interface. Pinterest, at 72, was the only site to make a significant gain (+4%) and also benefits from a streamlined interface that allows users to create and access their accounts via Facebook and Twitter.

Social networking sites Facebook, Twitter, and LinkedIn are at the bottom of the category in spite of their popularity. Sites like these will likely need to step up their efforts in the crucial areas of advertising and interface development to improve customer satisfaction. In the meantime, they remain the lowest-rated companies in the e-business category.

Can Hotels Make Guests Happy Across Diverse Brand Portfolios?

For several years, the hotel industry has been a fairly steady performer when it comes to customer satisfaction, according to ACSI research. From 2008 to 2010, guest satisfaction with hotels was stable at 75 (on a 0 to 100 scale). Next came three straight years at 77—a record high for the industry, but middling compared with the national ACSI average of 76.5.

The hotel industry’s flat trend, however, masks differences in the customer experience offered by some of the biggest names by market share in lodging. More upscale hoteliers tend to dominate the category, with Marriott in the top spot this year at 82, followed closely by Hilton 80. Budget-conscious chains such as Choice Hotels (75) and Wyndham Worldwide (72) comprise the lower end of the industry.

But many of these corporations are home to diverse lodging brands—from upscale resorts to midrange business-oriented properties to family-friendly budget brands. For instance, Marriott owns JW Marriott, a luxury hotel chain, alongside Fairfield Inn & Suites by Marriott, a midscale brand. Hilton, also know for its resorts, offers Hilton Garden Inn, an upscale property with appeal to both business and leisure travelers.

Next month, the ACSI will uncover the customer satisfaction differences—or lack thereof—among two dozen of the most popular hotel brands that come under the aegis of Choice Hotels, Hilton Worldwide, Marriott International, and more. The new study has the potential to reveal strengths and weaknesses within the brand portfolios of major hotel chains, as well as facilitate comparisons between competitors at the brand level.

 Read About ACSI Hotel Brand Study  »

Galaxy and iPhone Customers Weigh In on Their Brand of Choice

In July, the American Customer Satisfaction Index released its first-ever customer satisfaction results for top-selling smartphones. The 2013 scores prompted great interest and lively discussions in the media as two Samsung phones dashed past three Apple devices to lead the survey at 84 (on a scale of 0 to 100).


The new brand study is based on the same independent, scientific methodology that the ACSI has employed since 1994 to measure 40+ industries which market products and services to U.S. consumers. Proprietary technology ensures all ACSI results are consistent, reliable, and comparable across time periods, companies, and industries.

In May, the ACSI issued updated customer satisfaction scores across the cell phone industry—a category measured since 2004. The yearly study measures customer satisfaction at the company level and includes each manufacturer’s complete product line—smartphones and feature phones. While Apple and BlackBerry offer smart devices only, other manufacturers such as LG, Nokia, and Samsung sell a mix of phones—some smart and some feature.

For the cell phone industry overall, Apple retains its lead for a second year, perhaps benefiting from its smart-only product line. Meanwhile, Samsung at 76 trails Apple by 5 points. There is, however, a key difference. While Samsung’s customer satisfaction trajectory is on the upswing and the company gains 7% compared to the prior year, Apple’s score slips—down from 83 in 2012 to 81 in 2013.

Enter the ACSI’s smartphone-only brand study. When considering only smartphones—which display a sharp customer satisfaction advantage over feature phones in ACSI research—Samsung’s Galaxy S III and Note II lead the field according to consumers who own these particular smartphone models. The owners of Apple’s iPhone 5, 4S and 4 give their smartphone choices somewhat lower scores in the range of 81 to 82.

Read more later this week in the ACSI’s August 2013 newsletter »

ACSI Smartphone Brand Study in the News:
The Huffington Post

Will Changes to Frequent Flyer Programs Help Airline Satisfaction?

Passenger satisfaction with airlines is one of the lowest-scoring industries measured in the American Customer Satisfaction Index (69 on a 0-100 scale), beating only subscription TV and Internet service. Out of 11 categories of airline customer experience benchmarks ranging from ease of the check-in process to handling of baggage, the quality of loyalty programs is third from the bottom (73), scoring above quality of in-flight services at 68 and seat comfort at a dismally low 63.

Airlines may now be seeking to improve their loyalty program satisfaction, as many have announced changes to or entire overhauls of their existing programs within the past few weeks, according to the New York Times.

Some changes may have the potential to change satisfaction scores for the better—for example, an ability to convert hotel reward points to airline miles, to earn miles from flights on partner airlines, and expanded access to airport lounges. Other changes including higher award ticket fees, establishment of minimum annual spending stipulations, and removal of elite mileage bonuses could be detrimental to passenger satisfaction.

ACSI data show that added fees lead to lower overall customer satisfaction. Looking at the past two years, overall satisfaction for passengers who did not pay a baggage fee was 73, while those who paid fees were much less satisfied with scores in the mid-to-low 60s. It is interesting to note, however, that those paying a baggage fee are somewhat more satisfied this year (65) compared to 2012 (62). If passengers are adjusting to these fees—or more likely, finding ways to avoid paying them—this could account for the small uptick.

Nevertheless, changes to loyalty programs that move in the direction of higher costs for travelers, either adding fees or removing benefits from existing programs, will undoubtedly take a toll on customer satisfaction in this already poor-performing industry.

Is Fast Food No Longer Just Fast?

On average, U.S. households dined at either full-service or fast food restaurants about twice per week in 2012, a rate expected to continue in 2013. Fast food shows an edge in being chosen somewhat more frequently, and its customer experience is looking surprisingly good in side-by-side comparison with full-service dining.fullservicefastfood

Customers are mostly pleased with their sit-down dining experiences. Restaurants have good layout and cleanliness (87). Staff are courteous, helpful (87), and accurate with orders (89). Benchmarks for menu variety, food quality, and beverage quality range from 86 to 87. Even the websites of full-service restaurants score significantly higher than the average for all restaurants (78.3). The weakest link in customer’s appraisal of their actual dining experience is the speed of service (83).

For fast food, order accuracy (85) and beverage quality (84) receive the highest marks. Layout and cleanliness, along with speed of check-out or delivery, score fairly high at 83. Courtesy and helpfulness of the staff is relatively satisfactory (82), as is satisfaction with websites (82). The lowest scores are for food and beverage variety and food quality, all 81.

While customers are somewhat happier with their experiences at full-service restaurants compared to fast food outlets, overall customer satisfaction between the two has been very close for the last two years. For 2013, the full-service category scores 81 (on a 0-100 scale), while fast food is stable at 80 for a second year. Because low cost continues to be a pull for many consumers, the relatively strong overall performance of fast food may be too close to comfort for full-service chains.