PCs Follow Negative Trend for Big-Ticket Durables

/ David VanAmburg

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.

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Toyota Snags Double Win in Customer Satisfaction Ratings

/ David VanAmburg

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.

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Domestic Cars Bow to Imports in ACSI 2017

/ David VanAmburg

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.

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Google+ Benefits From Small but Highly Satisfied User Base

/ David VanAmburg

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.

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Full-Service Restaurants Falter Amid Slumping Sales

/ David VanAmburg

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.

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Competition Boosts Satisfaction for Wireless Phone Service

/ David VanAmburg

As contracts fade in the wireless phone service marketplace, customer satisfaction surges—proof that choice matters in the battle to win over consumers. The industry’s ACSI score climbs 2.8% to 73 this year, with carriers engaging in more competitive price wars.

Compared with other telecom categories where consumers have little choice, the wireless industry shows that when companies fight for customers, good things happen: prices are competitive, service improves, and customer satisfaction is higher. Decades ago, landline phone companies were fully immersed in price wars to win and keep customers. Today, unlimited data and no contracts are hallmarks of the new battleground, and the wireless industry is truly competitive again.

Smaller wireless carriers set the bar with a 3% gain to an ACSI score of 79, followed by prepaid provider TracFone Wireless at 77 (+3%). Likewise, Verizon Wireless and U.S. Cellular climb 4% and 3% each to 74, while Sprint hits an all-time high of 73 (+4%). T-Mobile ties with Sprint and is the only company to move in the opposite direction (-1%). AT&T Mobility is at the bottom of the category (+1% to 72). As new competition arrives from companies like Comcast via its Xfinity Mobile, consumers will have even more options as they increasingly eschew landline in favor of wireless phone service.

ACSI: Wireless Competition Boosts Customer Satisfaction While Pay TV Fades »

Pay TV and ISPs: Dead Even, Dead Last in ACSI

/ David VanAmburg

It doesn’t take a lot of imagination to glean that U.S. consumers find little to like about their subscription television or internet service—especially when it is provided via cable. According to customers, internet service providers constitute the bottom of the barrel when it comes to customer satisfaction, and this year pay TV is no better. Both come in dead last among 43 industries in the American Customer Satisfaction Index, and many of the same companies dominate both categories.

While other telecom industries improve in 2017—most notably wireless phone service rises nearly 3% to 73—pay TV slides 1.5% to meet ISPs at 64. And some cable providers are scraping down toward the bottom of the entire Index. Comcast’s Xfinity tumbles 6% to 58, just ahead of Mediacom (56). The best pay TV can offer comes via fiber optic or satellite, as DISH Network, AT&T’s DIRECTV and U-verse, and Verizon’s Fios score in the range of 67 to 71. For internet service, Fios and U-verse also take the top (71 and 69, respectively) with Xfinity at 60, just ahead of several providers who languish in the 50s (Frontier, Windstream, Mediacom, and CenturyLink).

For pay TV, the very real threat of competition has not turned the tide for customer satisfaction. Increasingly, customers are forgoing the poor service they are receiving and switching to streaming services. In the first quarter alone, over half a million subscribers defected from cable and satellite service—the biggest loss in history.

Overall, the ACSI report does not bring good news for broadband and as other options proliferate, cord cutting is unlikely to subside or slow down. As such, the ACSI will be adding measurement of VOD (video on demand) in 2018 to capture the on-demand services of traditional providers, along with coverage of competing stand-alone video streaming services.

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Smartphones: Apple iPhone SE Has Happiest Users

/ David VanAmburg

It has been four years since Apple updated a smaller, pocket-sized phone and consumers are over-the-top with the new iPhone SE. Among smartphone brands, the lower-priced, no-frills iPhone SE scores a sky-high 87 on a scale of 0 to 100—the best rating among an array of primarily Apple and Samsung models in a recent study from the American Customer Satisfaction Index (ACSI).

The 4-inch SE beats out phones that are larger and designed with premium in mind. In second place, big-screen models Galaxy S6 edge+ and iPhone 7 Plus tie at 86, followed by three more Galaxy phones (scoring 84 to 85). Further down, the 5.7-inch Galaxy Note 5 comes in at 82.

Overall, Apple and Samsung dominate the category, and other manufacturers occupy the low end. Motorola’s Moto G and the larger LG G4, with its 5.5-inch screen, trail behind with scores of 75 and 73, respectively. The lowest-rated model, however, belongs to Samsung—the Galaxy Core Prime (70).

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Airlines: In a Year of Gains, Ultra-Low-Cost Yields Low Satisfaction

/ David VanAmburg

Surprise: The airline industry overall is improving its customer experience, according to surveys of thousands of passengers flying over the past year conducted by the American Customer Satisfaction Index (ACSI). While recent high-profile incidents peppered April headlines—from United’s passenger debacle to Delta’s spring break computer outage—consumers evaluating their experiences between April 2016 and March 2017 see year-over-year improvement as industry satisfaction bumps up 4.2% to an ACSI score of 75 (scale of 0 to 100).

Industry leaders JetBlue (82), Southwest (80), and Alaska Airlines (78) turn in scores that compare well with top-scoring companies in other industries. Other carriers—including legacy airlines—fall anywhere from middling to below-average for customer satisfaction. But passengers that are the most dissatisfied are those who opt for low price above all else. In a year that brings nearly across-the-board escalation in passenger satisfaction, the ultra-low-cost operators Spirit and Frontier lose ground (dropping 2% and 5%, respectively).

With major airlines like Delta and American starting to compete more aggressively on price, low ticket prices are not enough of a trade-off for low service quality. Across three years of ACSI measurement, Spirit consistently ranks last for passenger satisfaction, although the airline did improve last year (up from 54 in 2015 to 62). In 2017, however, the airline does not build upon that gain. Thus far, Spirit’s efforts over the past year to better customer relations and improve on-time arrivals are not paying off as passenger satisfaction instead recedes to 61.

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