Customer Satisfaction: Going in the Wrong Direction?

The new American Customer Satisfaction Index report points to disappointing trends over the past year.

acsiAnother year has gone by — and with it the unsettling revelation that companies may be more talk than action when it comes to improving their customer satisfaction levels with customers.

The latest evidence of this comes from newly released ASCI (American Customer Satisfaction Index) figures. The data were compiled from results reported by ACSI in 2015 based on surveys conducted from Q4 2014 though Q3 2015.

What the ACSI report shows is that customer satisfaction is trending in the wrong direction. Of the 43 industries tracked by ASCI, only five of them registered an overall improvement in customer satisfaction score, while the other 38 declined or stayed the same.

The ASCI index includes more than 325 measures, with some companies represented in multiple industries where they hold substantial market share. Each company’s rating is based on a total possible high-score of 100.

Here’s the unpleasant bottom-line finding: In nearly 60% of the cases where year-over-year comparisons were possible, customer satisfaction scores have declined over the past year.

Where are the biggest problem areas? Perhaps not surprisingly, four of the five companies that experienced the largest declines in customer satisfaction were in the communications sector:   Comcast, AT&T, Cox Communications and Time Warner Cable.

ccComcast experienced a particularly bad result, with its ASCI score dropping ~10 percentage points to 54, tied for second-lowest among all companies included on the index. Cox Communications’ rating declined ~9 points to 58, and Time Warner Cable showed a similar percentage decline all the way down to a 51 score – the lowest rating recorded among all the companies on the index.

On the other hand, there were some bright spots in the latest ASCI report — and a lot of it has to do with Internet-based sectors.

Indeed, three of the five industries which charted overall improvements in customer satisfaction ratings are Internet-based, including Internet retail (up ~5 percentage points to an index of 81, the highest total achieved by any of the industries categories).

Other industries that exhibited an improvement in customer satisfaction ratings over the past were online travel services (which improved by ~1.5 percentage points to a composites score of 78) and social media (up ~4 percentage points to 78).

Two other industries that notched improved composite scores were household appliances – doing quite well with an ~81 score — and passenger air travel which, while still mired in a low index of 71, actually is during a tad better than in earlier years.

Even though the overall trends in customer satisfaction haven’t been in the right direction, more than 70 companies managed to achieve ACSI scores of 80 or better in the most recent evaluation, which has to be considered a very positive outcome. Most of these firms are manufacturers rather than service companies – which also continues a trend observed in prior-year surveys.

Additional results and detailed findings can be viewed here. Do any of the company findings surprise you?

Next on Wal-Mart’s Low-Price Hit List: Cell Phone Service

Wal-Mart logoIf you’re like many people, your monthly cell phone bill has been creeping higher and higher over time. The addition of second and third lines, family plans, text and data messaging has provided big leaps in functionality at the cost of just modest additional fees … but those fees do add up.

Today, just in time for the recession, the average monthly cell phone bill for Americans, at nearly $80, is as high as it’s ever been. So it’s no wonder that new suppliers have been nosing around this market for awhile now, including those offering VoIP phone services over the web at a fraction of the cost.

And now Wal-Mart has gotten into the fray. On course to become the low-price leader in seemingly every imaginable consumer product and service, Wal-Mart has decided to roll out a new wireless cell phone service called Straight Talk.

Instead of the plethora of “complicated, convoluted and confusing” contracts that seem to be so common in the industry, Wal-Mart’s Straight Talk is offering just two plans – and neither of them requires a signed contract.

One plan offers unlimited minutes, texting and mobile web user for $45 per month. A cheaper, $30 monthly plan allows for 1,000 voice minutes, 1,000 text messages and 30 megabytes of web usage. Consumers may refill their monthly balances by buying refill cards at Wal-Mart stores or by registering online.

And what about those irritating “add on” charges that always seem to add $10 or $15 extra to your monthly bill? Wal-Mart’s aiming to limit those as well. For example, 411 directory assistance calls are free.

A pilot program, conducted this summer partnership with TracFone Wireless at 234 stores, was so successful that Wal-Mart has decided to introduce the program nationally in time for the holiday shopping season. In fact, the rollout begins this week at 3,200 Wal-Mart stores across the country. Wal-Mart is promoting the service as one that will save consumers ~$500 a year.

Considering how cost-conscious people are at the present time, the promise of savings like that are enough to encourage even those families saddled with early termination penalty clauses in their service contracts to ditch their current suppliers.

Here’s a prediction: It won’t be long before Verizon and AT&T begin to offer similarly discounted and/or no-contract services to their customers. Now, if only they had done so before … they might actually have higher customer satisfaction scores than their current mediocre (or worse) ratings.

The Broad and the Beautiful

It took awhile, but access to faster Internet service is finally beginning to even out across all geographic regions of the United States.

A new study on broadband growth conducted by comScore, Inc., a digital marketing intelligence firm, finds big gains for broadband in rural areas. As of the end of 2nd Quarter 2009, an estimated 75% of rural households with Internet access now have broadband service. (Rural markets are defined as those having less than 10,000 population).

Two years ago, comScore counted only 59% of rural households connected to the Internet having broadband service.

Not surprisingly, large metropolitan areas with populations over 50,000 have higher broadband penetration (92% of Internet households), but this percentage is up only a couple points in the past year.

Who’s providing these broadband services? A just released study by Leichtman Research Group found that 19 service providers account for well over 90% of the U.S. market – the largest among them being Comcast and Time Warner for cable … and AT&T and Verizon for telephone.

Indeed, some metro markets are beginning to approach broadband saturation. For instance, in the New York metropolitan area comScore finds 96% of all Internet households are using broadband. It’s 92% in Chicagoland, and nearly 90% in Philadelphia and San Francisco-Oakland-San José.

The Internet broadband penetration for the country as a whole — at nearly 70 million households now — is estimated to be over 85%, meaning that rural areas are still relatively under-served. But the differential is shrinking quickly. Chalk up yet another instance where regional differences are disappearing – thus making rural markets more attractive not just to consumers, but also for rural-based businesses and for companies that rely on far-flung employees who telecommute from home.

It makes saving money on gasoline and avoiding rush-hour traffic snarls more attractive than ever!