American Customer Satisfaction Index
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The American Customer Satisfaction Index (ACSI) is a leading indicator of consumer behavior, measuring the satisfaction of consumers across the U.S. economy. The ACSI interviews approximately 80,000 Americans annually and asks about their satisfaction with the goods and services they have consumed. Respondents are screened to cover a wide range of business-to-consumer products and services, including durable goods, services, non-durable goods, local government services, Federal government agencies, and so forth. Results from data collection and analysis are released to the public each quarter at regular intervals. The resulting information is used in academic research, for corporate and organizational decision-making, by market analysts and investors, and by industry trade associations. ACSI data also aids consumers in making better-informed consumption choices.
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[edit] History
The ACSI was started in 1994 by the National Quality Research Center (NQRC) at the University of Michigan in Ann Arbor, Michigan, in partnership with the American Society for Quality in Milwaukee, Wisconsin and CFI Group, Inc, also in Ann Arbor. The ACSI was based on a model originally implemented in 1989 in Sweden called the Swedish Customer Satisfaction Barometer (SCSB). Both the Swedish version and the ACSI were developed by Professor Claes Fornell, now the Donald C. Cook Professor of Business Administration at the University of Michigan, and Chairman of CFI Group. Fornell remains the director of the NQRC, and the principal researcher behind the ACSI.
[edit] ACSI Methodology
The ACSI uses two interrelated and complimentary methods to measure and analyze customer satisfaction: customer interviewing and econometric modeling. Beginning with the interviewing, professional telephone interviewers working for a market research firm contracted by the ACSI and employing Computer-Assisted Telephone Interviewing (CATI) technology collect data (in the form of survey responses) from randomly selected and screened customers of companies and organizations. The random-digit dial method of sampling is used to identify potential respondents, guaranteeing an accurate representation of the U.S. consumer population.
Once collected, ACSI researchers input the data into a causal/structural equation model for analysis. This analysis provides both scores for measured latent variable components (such as customer expectations, overall quality, perceived value, etc.), and the relationships (or "impacts") between these measured components. Most importantly, each measured company or organization is given a customer satisfaction index score (an "ACSI score") which reflects a weighted average of three satisfaction proxy questions. Each index score is on a 0-100 scale, and therefore a company can (hypothetically) receive any score ranging from 0 to 100. In practice, scores have tended to range from the low 50's to the high 80's. While slight differences between questionnaires administered to respondents across industries and sectors do exist, the three satisfaction questions used to create the ACSI score for each company are identical. Coupled with the standardized 0-100 index scale, these methods permit benchmarking between companies and organizations.
[edit] ACSI Measurements
Using these methodological and analytical techniques, ACSI measures customer satisfaction annually for more than 200 companies in 43 industries and 10 economic sectors. Measurement is done on a rolling basis. During each quarter data is collected for particular sectors and industries and used to replace data collected 12 months earlier. This data is then weighted by industry and sector to create a national ACSI score. The national ACSI score represents, albeit at some level of abstraction, the satisfaction of the "average American consumer." This broad perspective allows ACSI researchers to examine the impact of improving or declining satisfaction on future macroeconomic performance. Therefore, during each quarter new ACSI results are published for: approximately one-fourth of the measured companies, industries and sectors, as well as the rolling-average National ACSI score. These results are released to the public through the ACSI website and a variety of media outlets about 45 days after the end of each fiscal quarter (i.e. in late May for Q1, August for Q2, November for Q3, and February for Q4).
[edit] Sector, Industry and Company-Level Findings
Thirteen years of ACSI data have shown that certain sectors, industries and companies perform well consistently, while others are almost always below average (with the national ACSI score reflecting the average). At the sector level, manufacturing industries - including both durable and non-durable goods manufacturers - have tended to perform well. The comparatively higher satisfaction performance by these sectors is understandable; industries within these sectors tend to be well established, "old economy" industries that have exhibited a longer-running focus on quality control procedures (such as TQM and Six Sigma), and (perhaps more importantly) industries that rely less on human intervention in the production and consumption processes. On the other hand, the "new economy" service sector industries, which rely more on customer service and human intervention in the consumption process, have tended to perform below average.
Some industries that have performed well over the years in ACSI include: e-commerce, personal care products, soft drinks, beer, consumer electronics, automobiles and household appliances. Some industries that have tended to perform poorly include: cable television providers, airlines and telecommunications industries. Among government agencies, the Internal Revenue Service has tended to perform below average, while other agencies - such as the Social Security Administration - have done better than expected.
[edit] Macroeconomic Findings
One interesting set of findings discovered by ACSI researchers involve predictions of macroeconomic growth as functions of changes in aggregate customer satisfaction. Using aggregate ACSI data (i.e. the national ACSI score discussed above), ACSI researchers have found a robust relationship between this index and some important macroeconomic indicators. For instance, the National ACSI score has proven to be a strong predictor of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal Consumption Expenditure (PCE) growth. This latter result is especially surprising, given that many economists continue to identify PCE growth as a "random walk" with no significant or consistent predictors. Finally, ACSI data has been found to predict stock market performance, both for market indices and for individually traded companies. In a recent paper published in the Journal of Marketing, a hypothetical, back-tested portfolio of stocks chosen based on their performance in ACSI was shown to significantly outperform the New York Stock Exchange (the Dow), the NASDAQ and the S&P 500.
[edit] International Adoption of the ACSI Model
Over the last few years, research groups, quality associations and universities in several countries have adopted the ACSI model to create customer satisfaction indices for their own national economies. Recent additions to the list of countries that have adopted the ACSI model include Turkey, Singapore, Mexico and Colombia. Groups in several additional countries are in various stages of project implementation as well. The development of an international system of customer satisfaction measurement founded on a common methodology could soon permit comprehensive cross-national satisfaction benchmarking, something that will grow more significant as economic globalization advances.
[edit] External links
- The American Customer Satisfaction Index
- National Quality Research Center
- University of Michigan
- CFI Group, Inc.
- Foresee Results
- American Society for Quality
[edit] ACSI Literature
The following is a partial list of academic research that has utilized ACSI data and drawn from ACSI findings. (For a more complete list, visit the ACSI website's Research Bibliography Page).
- Fornell, Claes, Sunil Mithas, Forrest V. Morgeson III & M.S. Krishnan, (2006), "Customer Satisfaction and Stock Prices: High Returns, Low Risk", Journal of Marketing, Vol. 70, January, 3-14.
- Fornell, Claes, David Van Amburg, Forrest Morgeson & Barbara Bryant, (2005). The American Customer Satisfaction Index at 10 Years. Ann Arbor: The Stephen M. Ross School of Business.
- Anderson, Eugene W., Claes Fornell & Sanal K. Mazvancheryl, (2004), "Customer Satisfaction and Shareholder Value," Journal of Marketing, Vol. 68, October, 172-185.
- Fornell, Claes, (2001), "The Science of Satisfaction," Harvard Business Review, Vol. 79, 3 March, 120-121.
- Fornell, Claes, Michael D. Johnson, Eugene W. Anderson, Jaesung Cha & Barbara Everitt Bryant, (1996), "The American Customer Satisfaction Index: Nature, Purpose and Findings," Journal of Marketing, Vol. 60, October, 7-18.
- Anderson, Eugene W., Claes Fornell & Donald R. Lehmann, (1994), "Customer Satisfaction, Market Share and Profitability: Findings from Sweden," Journal of Marketing, Vol. 58, July, 53-66.
