3 ways financial advisors can hold onto customers despite market volatility

The stock market’s rocky start to February has investors, observers, and advisors watching the peaks and valleys and wondering what’s next.

At least for financial advisors, there are a few steps forward in the latest ACSI data around customer satisfaction.

The ACSI Financial Advisors Report 2017 collected data in the fourth quarter of 2017 and reflects customer perceptions when the stock market was still soaring. As you might expect, the scores were high. The average of 81 (out of 100) places it in the top 10 industries measured by the ACSI.

But it also contains opportunities for advisors to differentiate themselves and rise above their competitors, something especially crucial if market volatility remains a trend.

Currently, the major financial advisors have ACSI scores within a few points of each other. LPL Financial and Charles Schwab lead the pack with a score of 82, while Fidelity, Merrill Lynch, and UBS all have the lowest score of 79.

The narrow range shows how competitive the industry is right now and how small, incremental changes can help advisors stand out. Here are three ways to improve customer satisfaction, according to the data:

1. Focus on improving customer service.

Despite the relatively high scores for financial advisors overall, they also have the fourth highest complaint rate of any industry measured by the ACSI – a red flag of negative feedback from customers experiencing problems.

This is probably the biggest opportunity for financial advisors to set themselves apart. A concerted effort to improve service – whether through more face-to-face contact or instantaneous chat capabilities on a website — could increase customer satisfaction and loyalty.

2. Develop or upgrade mobile options.

Mobile options for account management had one of the lowest scores among all the benchmarks, coming in at 78.

While the industry has to contend with compliance constraints, a push behind better mobile capabilities could set advisors apart and give them a technological lead over their competitors.

3. Establish routine contact with investors.

Scores for routine contact with investors (81) and personal contact (79) were two others with lower scores among financial advisors.

Investors will likely have questions about the recent volatility in the markets, making this a prime opportunity for improvement. By taking a more proactive approach to client communication, advisors can not only help clients navigate a suddenly shaky market, but develop relationships with customers that could weather further market volatility.

How customers feel about their financial advisors

While these steps are a start, we’ll have to wait and see how the markets fare in the coming weeks and months.

We’ll closely monitor the perceptions of customers and see whether the high ACSI scores for financial advisors hold up even if the big upticks we saw in 2017 don’t materialize in 2018.

Take a deeper dive into all the customer satisfaction data for financial advisors for more insights on this segment of the market.

Love or hate Trump, government satisfaction just hit an 11-year high

Customer satisfaction for U.S. federal government services just hit an 11-year high. Yes, you read that right.

If you watch the news, skim the headlines, or scroll through Facebook, you’ve probably noticed that people have wildly different perceptions of how well the government is working.

But as far as customer service is concerned, many Americans agree: The federal government is much better than it was just a few years ago, and is the best it’s been since 2006.

Just a few hours before President Trump gives his first State of the Union address, the economy appears to be flourishing and GDP is rising. But there are other measures of success to factor in. Let’s look at a few.

“Customers” are satisfied with the government

Citizens using the government’s services are happy with their experience, according to our most recent data. In fact, customer satisfaction with the federal government’s services improved for a second year in a row, increasing 2.5 percent to reach 69.7 (on a 100 point scale).

Four key factors drive satisfaction:

  1. Quality of federal websites (up 1 percent to 77)
  2. Courtesy and professionalism of customer service personnel (down 1 percent to 77)
  3. Clarity and accessibility of information received from agencies (up 1 percent to 73)
  4. Timeliness and efficiency of government processes (up 3 percent to 72)

Last year, the federal government’s website performance saw the highest gain, but customer service was the highest-ranking factor in overall customer satisfaction. This year they tie as the most important indicator for happiness.

Political affiliation doesn’t matter

You may think that customer satisfaction with the government directly correlates to political affiliation. The party in power surely must impact the overall consumer satisfaction rate.

But, surprisingly, you’d be wrong.

In fact, satisfaction among Republicans dropped over the past year (1 percent decrease to 69), and it remained unchanged (73) among Democrats. Independents shifted the most, with a 3 percent gain to 67.

The ACSI survey doesn’t measure satisfaction with government policy and leadership, instead relying on the four factors above to analyze interactions and determine the scores. But it’s still interesting that affiliation and opinions on the administration didn’t appear to muddy consumers’ perceptions of the processes and services they received.

Not all government services are created equal

While customer satisfaction with the federal government overall has been climbing, there’s varying opinion of which government services are most customer-friendly.
The Departments of Justice and Interior performed particularly well this year (81 and 78 respectively), while the Departments of the Treasury and Housing and Urban Development were at the bottom of the spectrum (61 and 60 respectively). The IRS is included in the Treasury Department, which will be interesting to watch now that the tax overhaul is in effect — both from the perspective of lowering costs as well as simplifying the process, which historically results in higher satisfaction.

The 21-point gap between the highest and lowest performing departments is significant, but not unusual or unexpected. The 69.7 average means consumers are getting what they need and are relatively satisfied, but there’s room for improvement.
Private companies still reign supreme

While almost 70 percent doesn’t seem too bad for a customer satisfaction score, the government still falls short of the private sector.

For example, credit unions have a high customer satisfaction level (82), as do the banking and shipping industries (81). Many other private companies are in the low-to-mid-70 range, putting the federal government’s report card on the lower end of all industries the ACSI surveys. In fact, only subscription TV services rank lower than government services, at 64.

Based on historical data, the government is always at or near the bottom of the ACSI. This isn’t a new finding, but it is significant in the context of customer perception.

What to watch moving forward

Tonight’s State of the Union should give insight into the government’s priorities for the next year and what we might expect for major projects and policies.

But a more politically polarized country and low approval ratings for President Trump don’t necessarily translate into a change in the ACSI report. However, if there are positive changes to government websites and the friendliness of service-oriented staff, we could continue to see the upward shift in customer satisfaction.

Bank Customer Satisfaction Offers Challenge to Credit Unions

Customers are finding retail bank services more satisfying in 2017—so much so that banks hit an all-time industry high score on the American Customer Satisfaction Index that is close to approximating member satisfaction with credit unions. Historically, banks were once among the lower-scoring industries in the ACSI, but now they are in the top quartile for customer satisfaction.

In 2008, credit unions debuted in the ACSI with a score that nearly topped all other industries in the Index. At 84 on the ACSI’s 100-point scale, credit unions came in second only to personal care and cleaning products (85) and were ahead of retail banks by a whopping 9 points. Now 10 years later, retail banks score 81, trailing credit unions (82) by just a point.

Digital banking plays a strong role in helping banks meet their customers’ needs more efficiently. As mobile banking grows in popularity, customers choosing to use apps can have a satisfying experience—leaving more time for bank staff and tellers to offer a personal touch for those who continue to do their banking in-branch.

Size still matters when it comes to satisfying bank customers, and smaller community and regional banks continue to offer an experience that beats both super regional and national banks. With an ACSI score of 85, small banks are significantly ahead of credit unions as well.

Credit unions and smaller banks show similar ACSI results across key elements of the customer experience and for the most part exceed the performance level of the larger banking institutions. With more personalized service, small institutions score better than big banks for staff courtesy, transaction speed, account information, ease of making account changes, and competitiveness of interest rates. The exceptions are number and locations of branches and ATMs, where the scale of big banks comes into play.

As credit union membership grows, however, the industry may be struggling with maintaining the very high level of service that once set it apart from big banks. Looking at some of the touch points where small institutions typically shine, it is interesting to note that big banks are closing the gap to credit unions over the past two years. In 2015, for example, national banks trailed credit unions by 7 points for transaction speed, but this has lessened to 3 points this year. For staff courtesy, the gap between national banks and credit unions has gone from 5 to 3 points. A similar pattern prevails for both website and call center satisfaction.

ACSI Finance and Insurance Report 2017 »

Credit Union Times: Digital Banking FI Customer Satisfaction Reaches New High »

KOMO News: Customer Satisfaction With Banks at All-Time High »

PCs Follow Negative Trend for Big-Ticket Durables

American consumers are not finding new technology appealing enough to offset pricing across an array of durable products including personal computers, autos, household appliances, and even televisions. For PCs, weak demand is reflected in lower customer satisfaction (-1.3% to 77) as many customers turn increasingly to smartphone use.

For durable products like PCs, prices are not down—if anything, they are rising. The global shortage of NAND flash storage caused an uptick in PC prices, which also contributes to lower satisfaction. But innovation—or lack thereof—is dampening buyer enthusiasm whereby consumers have little incentive to replace or upgrade their PCs. Over the last few years, basic desktop and laptop functionality has not changed much, and innovation is moving more slowly around the margins.

Among PC makers, the top of the industry for customer satisfaction is driven by Apple and Samsung—mirroring results for the cell phone category. High-scoring Apple has led the PC industry for years, while Samsung, first measured in 2015, has sprinted up to nearly catch the leader. The two companies’ cell phone offerings also run nearly neck-and-neck, and some of their individual smartphone brands earn very high scores in the upper 80s. In ACSI’s smartphone brand study released last spring, Apple’s iPhone SE ranks first among 20+ phones at 87, followed by Galaxy S6 edge+ (86), iPhone 7 Plus (86), and Galaxy S6 edge (85).

On the computer software side, customer satisfaction wanes 3.7% to 78 as both smaller companies and Microsoft tumble—the latter declining even as it transforms into a supplier of cloud-based services. Despite MS increasing the frequency of feature updates, both Windows and the Office Suite have yet to give users improvements that are compelling enough to propel higher satisfaction.

KOMO News: Study: Computer Users No Longer Wowed by Hardware or Software »

The Motley Fool: People Are Less Happy With Their Computers »

Toyota Snags Double Win in Customer Satisfaction Ratings

Toyota headlines the automobile industry when it comes to customer satisfaction, earning the top spot among both luxury and mass-market brands in this year’s American Customer Satisfaction Index. Toyota’s Lexus is the luxury leader at 86 (100-point scale), followed by an improved Mercedes-Benz at 84. For mass-market plates, Toyota’s namesake brand comes in first with an equally high score of 86, with Subaru closing in at 85.

General Motors is the only domestic automaker in the top five overall, with its GMC nameplate grabbing third place at a stable score of 84. Among luxury plates, two domestic offerings tie for third: GM’s Cadillac and Ford’s Lincoln. For the former, 2017 is a comeback year as Cadillac gains 5% to earn its berth on the leader board. Not so for Lincoln, which tumbles after holding first place among all vehicles a year ago—down 5% from 87 to tie with Cadillac (83).

While the overall trend for autos in 2017 is one of receding satisfaction, Toyota brands are on an upswing. Likewise, Korea’s Hyundai earns a slot at number four among mass-market cars with a 2% gain. In fact, five of the six top-scoring mass-market vehicles are imports, and all show ACSI gains.

Historically, Toyota has been a consistent leader in customer satisfaction. For three years running, the Japanese carmaker has placed in the top two among mass-market cars, while its Lexus nameplate hit number one in 2015 and tied for third in 2016 among upscale vehicles.

Toyota, Lexus, Autos: 5-year ACSI Trends

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Domestic Cars Bow to Imports in ACSI 2017

Latest data from the American Customer Satisfaction Index finds drivers less happy with their vehicles, as the automobile industry slips 1.2% to a score of 81 (scale of 0 to 100). The downturn comes after a year when sales peaked and driver satisfaction improved. The bad news, however, is primarily on the domestic side as many imports are excluded from the decline. Foreign-made vehicles continue to have the highest driver satisfaction and 77% of the above-average nameplates in the ACSI are imports.

For the overall industry, demand seems somewhat saturated, and total car sales dropped in the first half of 2017. Customer satisfaction also retreats, but individual nameplates post more year-over-year gains than losses. Among the 25 car brands tracked by the ACSI, 12 improve and 8 decline—4 of which are domestic plates. The gap between international and domestic automakers widens as U.S. companies fall to a combined ACSI score of 80 compared with 82 for European and Asian carmakers.

Domestic and International Automakers: 5-Year ACSI Trends

General Motors is the only U.S. automaker to improve customer satisfaction this year, stepping up to take the lead at 82. Ford falls behind GM with a drop to 81, followed by Fiat Chrysler at 77. While all three manufacturers posted sales declines for the first half of 2017, GM’s was by far the smallest.

Domestic Automakers: 5-Year ACSI Trends

Although U.S. cars have improved much over the years, Detroit automakers have not been as consistent in quality and customer satisfaction compared with their international counterparts. This year, lagging customer satisfaction is not about deteriorating quality, but rather lack of innovation compared with imports. Recalls also negatively impact satisfaction, and a growing number of surveyed drivers report experiencing a recall.

For the overall industry, vehicle dependability remains steady from a year ago, but drivers rate technology (controls, displays, navigation, video systems) and driving performance lower in 2017 for both mass-market and luxury cars. The least-satisfying aspect of the driving experience continues to be gas mileage—from SUVs to economy brands, consumers seek better mileage from their vehicles.

ACSI Report: Customer Satisfaction Challenges for Detroit »

Consumer Affairs: Consumers Less Satisfied With New Car Choices »

NBC News: Imports Beat Domestic Cars in Customer Satisfaction »

Google+ Benefits From Small but Highly Satisfied User Base

Google+ may not be the first brand to jump to mind among social networks, but its users are the happiest, according to the latest findings of the American Customer Satisfaction Index (ACSI). With a high score of 81 on ACSI’s 100-point scale, Google+ improves user satisfaction year-over-year by 7%, jumping ahead of several larger social media contenders. With its smaller, more niche-like customer base, Google+ scores far ahead of social media giant Facebook, steady at 68 following its 9% tumble a year ago. Google+ appears to be serving its dedicated user base well with new features and a site redesign launched earlier this year. Google+ may also benefit from its seamless integration with other Google products across the platform.

The biggest gain in social media, however, belongs to Twitter, up 8% to 70 and overtaking Facebook. Social media is becoming an increasingly popular and vital platform for up-to-the-minute news, and Twitter has made its mark—all the way to the White House. And while Twitter surges for user satisfaction, every single major news website stumbles this year in ACSI. For the internet news and opinion category overall, user satisfaction drops 1.3% to 75.

Compared with social media (73) and internet news (75), search engine and information websites stay just ahead with an overall score of 76, despite a 1.3% downturn. The top name in search and information websites continues its reign unchallenged as Google dominates with a score of 82 (-2%). The nearest competitors are Bing, down 3%, and Yahoo!, down 1%—both much lower at 73. The latter now operates under the subsidiary Oath following its acquisition by Verizon. Another Oath brand, AOL, is the only search and information site to improve, inching up 1% to 70. Nevertheless, AOL remains ahead of just one other site—last-place Answers.com (68).

Regardless of category, the standout displeasure among consumers is the amount of advertising on websites. With scores ranging from 66 to 69, advertising rates as the worst aspect of the customer experience this year and shows deterioration over the last four years.

Washington Post: The Most-Loved Social Network Among Americans Isn’t the One You Think »

SiliconBeat: Social Media Satisfaction: Google+ Most Beloved Social Network, Twitter Gets a Trump Bump »

Search Engine Land: Report: Customer Satisfaction With Search Drops, in Social Google+ Beats Facebook »

Media Post: Consumers Less Satisfied With Search, Ads Worst Part Of Experience, ACSI Says »

Full-Service Restaurants Falter Amid Slumping Sales

Casual dining spots are suffering from similar circumstances plaguing major retailers—slowing sales and shrinking foot traffic—as once-vibrant malls lose favor with Americans. At the same time, U.S. consumers are less satisfied with sit-down venues to the point where fast food now takes the lead in the American Customer Satisfaction Index (ACSI).

Just a year ago, full-service restaurants were rated among the top four industries tracked by the ACSI. Now the industry dives 3.7% to a score of 78 on ACSI’s 100-point scale, allowing fast food to slip past at 79—a first in ACSI history. For companies that depend on quality to justify higher prices, it is sobering news when lower-price competitors can deliver a more pleasing experience.

As menu prices rise, lower grocery costs may be encouraging more Americans to dine at home, and younger consumers seek quicker service, convenience, and healthier choices. Amid these changes, many sit-down chains are looking to redefine themselves, including off-premise options and menu upgrades.

The top restaurant continues to be Cracker Barrel, up 1% to 84—a score that makes the Americana-themed entrant a customer favorite. Second-place Texas Roadhouse beats other steakhouses with a score of 82, although Outback Steakhouse gains 4% to 80. Darden’s LongHorn Steakhouse tumbles 6% to fall below average at 77, tied with an improved Chili’s.

Another Darden chain, Olive Garden, holds stable at 81 and it continues to generate sales, aided by to-go order increases. Also hitting 81, Red Lobster rises 3% to a four-year high after investing in better ingredients to upgrade its menu.

For Applebee’s, introducing wood-fired grills has yet to pay off in improved satisfaction and the chain is unmoved at 79. Ruby Tuesday also stagnates at 78 and earlier this year put itself up for sale amid store closings. TGI Fridays falls 3% to 76, tying Denny’s (+3%).

In last place, Red Robin plummets 9% to 73 as its first-quarter same-store sales drop. Red Robin, like many establishments with a mall presence, is not immune to changes in consumer shopping habits. As such, the company is testing delivery and catering options, as well as rethinking its mall locations. For casual dining overall, it remains to be seen if efforts like these will be enough to turn around customer satisfaction and bolster sales in the long term.

Consumer Affairs: Survey Shows Consumers Prefer Fast Food to Full-Service Restaurants »

FSR Magazine: Report: Full-Service Restaurants are Losing to Fast Food »