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The American Customer Satisfaction Index (ACSI) dropped again for the second consecutive quarter to 74.9. Why does this matter? "When customer satisfaction declines, consumers have less enthusiasm for repeating experiences that no longer provide the same gratification," says Professor Claes Fornell. AKA, they'll be spending less money.
Did you know that if you keep 5% more of your customers, you will make 35-95% more profit? Those were the findings of a Harvard researcher* when he investigated the financial impact of keeping customers around. The chart above demonstrates how a 5% increase in retention rates increased profit across a variety of industries. The equation is simple: make us stick around (usually by making us happier) and we'll make you more money. Cut out support, services, make it difficult to talk to you, etc, and while you might save in the short, you'll lose in the long-term.
[via The Value Creation Process in Customer Relationship Management (PDF)]
* Reichheld, F. F. and Sasser, W. E. Jr. "Zero Defections: Quality Comes to Services", Harvard Business Review, September-October, 1990, pp. 105-111.
Mainly driven by higher food prices, the American Customer Satisfaction Index went down for the first time in two years of continual growth. The blip was minus .1%, still up 1% from a year ago. [ACSI]
Customer satisfaction with buying cellphones at stores fell this year, reports J.D. Power and Associates in the recently released 2007 Wireless Retail Sales Satisfaction StudySM-Volume 2.
Industry scores dropped 12 points on 1,000 point scale. Verizon has the highest ratings at 726. Sprint scored the lowest with 679. The average is 709. According to the survey, the four most important factors driving customer satisfaction are sales staff (51%); store display (17%); store facility (16%); and price/promotion (16%).
The study's authors claim in the press release that the biggest thumb on customer satisfaction scores are employees in big box retail stores who using high-pressure sales tactics and not accurately conveying product and
service information. Gee, I wonder who that could be...
2007 Wireless Retail Sales Satisfaction StudySM-Volume 2 [J.D. Power and Associates]
American Express ranks highest in customer satisfaction in the J.D. Power and Associates 2007 Credit Card Satisfaction Study. They said there's two types of customers. One is transactors, who pay their bill off in full each month and for whom membership benefits are the most important drivers of customer satisfaction. The other is revolvers, who don't pay their bill off in full each month, and for whom APR and fees are the most important drivers of customer satisfaction. So if we flip this survey over....
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stocks
Does higher customer satisfaction lead to better stock performance?
After reading a scientific article in the Journal of Science claiming exactly that, we put together two mock stock portfolios. One contained companies that both scored in the top 20% of the American Customer Satisfaction Index (ACSI) relative to their competition and beat the national ACSI average. The other was the reverse, companies scoring in the bottom 20% and having scores lower than the national mean.
Since May, when the portfolios began, the ACSI fund is down 5.63%. The ANTI-ACSI fund is down 8.16%. Also, we messed up. Overview inside...
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indian call centers
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pharma
The results are based on an online survey of 6,543 U.S. consumers conducted last fall. The top retail pharmacy was Medicine Shoppe, an international franchise business owned by the drug distributor Cardinal Health.Here are the rankings in order:
marriott
(Corporate hotels have little to worry about because if they foul up, Marriott will just send in a glut of extra labor to fix the problem.) So how to keep labor costs way down and keep the scores way up? Easy.More »
acsi
University of Michigan's American Customer Satisfaction Index (ACSI) increased to an overall 74.9 score out of 100 in the fourth quarter of 2006, its highest level since the survey first started in 1994. That's a gain of almost 2 percent from the previous year and a 0.7 increase from the previous quarter.So who is winning and who is losing? More »
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