An Intro to the American Customer Satisfaction Index

What do airlines, large banks and telecom corporations have in common? They are among the least-liked companies in America.  How do we know? The American Customer Satisfaction Index (ACSI) tells us so. It’s the only uniform national measure of satisfaction with goods and services across a representative spectrum of industries and the public sector. The ACSI utilizes patented methodology to identify factors driving customer response and applies a formula to determine the cause-and-effect relationship between those factors and satisfaction, brand loyalty and overall financial health of a company.

ACSI data allows companies to reach informed decisions about current products and services and also make projections about changes under consideration. It’s a tool for managers to improve satisfaction and build customer loyalty and a means to evaluate competitors. ACSI scores also help investors evaluate the present and future potential of a company. Historically, stocks of companies with high ACSI scores outperform lower-scoring firms.

Developed by researchers at the University of Michigan and first published in 1994, the ACSI releases full results on a quarterly basis with monthly updates. The survey rates satisfaction with 225 companies in 47 consumer industries and more than 200 programs and services provided by federal agencies.  Data about customer satisfaction is gathered from random telephone and email interviews with 250 customers. To generate ACSI results, over 70,000 interviews are conducted each year. Consumers respond to questions about a company by rating three factors on a 1 to 10 scale: Overall satisfaction, fulfillment of expectation and relative comparison to an ideal product or service. Companies are chosen for scoring based on total sales and position within their industry. As company fortunes wax and wane, some are deleted from the survey and others added.

In addition to rating individual companies, the Index generates overall scores for 43 industries, 10 economic sectors plus a comprehensive national customer satisfaction score—now considered a significant metric for the health of the economy at large.

The scores from the American Customer Satisfaction Index are awaited by companies, economists, investors and government agencies alike. Some of the general conclusions gleaned from the results include:

  • Variations in customer satisfaction indicate the mood of consumers and accurately predict their readiness to buy products or services.
  • Since consumer spending makes up the majority of the national gross domestic product (GDP), spikes or dips in ACSI scores serve as an early warning to fluctuations in GDP.
  • Quality, not price, is the primary factor generating customer satisfaction in most industries scored by the ACSI.
  • High-profile mergers, acquisitions, large layoffs and other internal uncertainties degrade a company’s customer satisfaction score.
  • Service industries are generally positioned for lower ACSI scores than the manufacturing sector.

Around the world, many countries are implementing surveys based on the ACSI model. In the future, ACSI methodology may evolve from a one-nation metric to a global quantification. As national economies expand into worldwide markets, international data on consumer satisfaction and a company’s—or a country’s— relative success in fulfilling it will prove vital.

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