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?

Which are America’s Most Disliked Companies?

More than a few perennial “favorites” … plus a couple newcomers.

yuck factorI’ve blogged before about the companies Americans love to hate.  And now, 24/7 Wall St. has published this year’s list of America’s most disliked companies.  As the equity investment data aggregator and investment firm describes it:

“To be truly hated, a company must alienate a large number of people.  It may irritate consumers with bad customer service, upset employees by paying low wages and disappoint Wall Street with underwhelming returns.   

For a small number of companies, such failures are intertwined.  These companies managed to antagonize more than just one group and have become widely disliked.”

In developing its list each year, 24/7 Wall St. reviews various metrics on customer service, employee satisfaction and share price performance.

Only companies with large customer bases are evaluated, based on the premise that for a company to be widely disliked, it needs to be known to a large number of people to begin with.

Among the sources reviewed by 24/7 Wall St. are the following:

This year’s list of the most disliked companies includes the following:

logo#1  General Motors — More than 30 million recalls pertaining to vehicular problems that have been linked to more than 40 deaths brings this company to the top of the list … along with a lot of dissembling about the issue.

#2  Sony — The hacking of the company’s computers and the resulting chaos surrounding the (non)-release of the movie The Interview was just the latest in a string of bad news, including a string of financial losses and fruitless reorganization attempts that seem more like rearranging the deck chairs on the Titanic than a recipe for righting the ship.

#3  DISH Network — Super-poor customer service ratings along with ongoing fights with the Fox network, leading to the blackout of popular programs that have done nothing but rile the customer base even more.

#4  McDonald’s — Its menu has lost favor with consumers — particularly when compared to competitors’ offerings.  Negative press about low employee wages doesn’t help, either.

#5  Bank of America — BofA can never seem to score above the average for its industry.  In fact, it’s been the least popular big bank in the ACSI surveys for years.  Even worse, Zogby Analytics has BofA with the second lowest share of “poor” reviews of any business in its 2014 customer service survey.  On top of that, the bank continues to have major problems in the mortgage sector, with a slew of fines levied to clean up mortgage practices that ran afoul of the U.S. regulators

#6  Uber — No doubt, this app-based ride sharing service is wildly popular with many users, even as it’s the bane of the traditional taxi business in major American and European urban centers.  But few companies so popular have faced as much controversy at the same time.  Perhaps it’s a natural side effect of being a disrupter in the market, but it’s caused many enemies for Uber in the process.

#7  Sprint Corporation — “The great disappearing phone service” might be one way to describe this firm.  Sprint has lost nearly 2.5 million customers in just the past two years.  In fact, it’s had 11 straight quarters of net decline in subscribers.  The result is lost employee jobs (2,000 and counting), along with reduced customer service and industry competitiveness.  And the share price of Sprint stock has fallen by half in the past year.

#8  Spirit Airlines — Imagine this list of maladies in the airline industry:  flight delays, long customer lines, invasive security, lost baggage, hidden fees.  Now imagine them all wrapped up in one air carrier and you have Spirit Airlines.  Enough said.

#9  Wal-Mart — According to ACSI, few companies have lower customer ratings than Wal-Mart.  It’s low even in comparison with other big-box discount and department stores, as well as supermarkets.  Its own employees also rate the company low — and there are 1.4 million of them, so their opinions really matter.  Meanwhile, some consumers see Wal-Mart as hurting or destroying local businesses wherever it chooses to open a store in a new community.

#10  Comcast — Whether we’re talking about its television or Internet services, this company comes in with really horrific customer satisfaction ratings.  They’re “standout bad” in an industry that’s infamous for poor customer care.  It didn’t help when a phone recording of a Comcast customer service representative went viral — the rep who took up nearly half an hour refusing to help a customer cancel his service.

[Interestingly a few companies that were on 24/7 Wall St.’s list last year no longer appear — notably retailers JCPenney and Abercrombie & Fitch.  For Penney’s in particular, it seemed a slam-dunk prediction that it would remain on the list this time around, but the company is actually in the midst of a modest turnaround — and consumers and investors have noticed.]

There’s another interesting and perhaps ironic factor about America’s “least liked” companies.  It’s that four of them also appear on the list of the ten most-advertised brands in the United States.

That is correct:  Based on 2013 U.S.-measured media ad spending as calculated by AdAge, Chevrolet (General Motors), McDonald’s, Walmart Stores and Sprint rank in the Top Ten list of the most-advertised brands:

  • untitled#1 AT&T
  • #2 Verizon
  • #3 GEICO
  • #4 Chevrolet (General Motors)
  • #5 McDonald’s
  • #6 Toyota
  • #7 Ford
  • #8 Walmart Stores
  • #9 Sprint
  • #10 Macy’s

Evidently, “all that advertising” isn’t doing “all that much” to burnish these brands’ image!

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!