The American Customer Satisfaction Index Experiences Largest Increase in 15 Years
“In competitive markets, firms are rewarded by treating their customers well and punished for treating them badly. The rewards/punishments show up, not only in earnings, but also in stock prices and make equity markets better aligned with consumer utility, which, in turn, causes an upward shift in demand curves. As a result, consumer spending increases and so does economic growth,” – Claes Fornell, Founder and Chairman of ACSI® – University of Michigan, Ross School of Business: A Legacy of Innovations, Spring 2017
There is a straight line from customer satisfaction to corporate profitability and stock performance. Companies with top-level ACSI® scores, and those changing satisfaction for the better, are today’s must-watch players.
Companies must focus on 10 areas of the customer experience to improve satisfaction without sacrificing revenue.
The American Customer Satisfaction Index (ACSI®) is a national indicator of the quality of economic output for goods and services as experienced by consumers of that output.
The Index uses technology developed at the University of Michigan by a team of researchers led by Claes Fornell, the Distinguished Donald C. Cook Professor of Business. Fornell is the most cited expert in the world on customer satisfaction and Customer Experience Management, according to Google Scholar. The Index currently tracks customer satisfaction with more than 400 of the largest corporations in the U.S. marketplace.
Findings from a large body of scientific research published by leading researchers from different academic institutions show that the American Customer Satisfaction Index has major effects on business objectives such as customer retention, corporate profitability, sales growth, size of cash flows, stability of cash flows, positive earnings surprises, stock returns, ROI, gross margins, shareholder value (Tobin’s Q), improved credit ratings, lower cost of capital, lower sales cost, and more. No other measure of customer satisfaction or customer experience has been able to demonstrate this kind of financial relevance.
Even more important, these financial returns are not associated with high risk. Not only is the doctrine of high risk/high return turned on its head, but customer retention economics produce exponentially increasing returns. As a result, another dogma—the law of diminishing returns—is also reversed (except for extraordinary high percentages of customer retention).
Because of the relevance of ACSI technology for business application—especially with respect to low risk/high return and exponentially increasing returns—the University of Michigan’s Office of Technology Transfer has made both the technology and ACSI data available to the private sector.
In the 1990s, business focus on customer satisfaction was in its infancy and the satisfaction decline between 1994 and 1997 came at a time when profits were generated from efficiencies in production rather than from satisfied customers.
Companies with high ACSI scores typically do very well in the stock market. If one created a portfolio of the top 30-35 ACSI companies in their respective industries each quarter, weighted by customer satisfaction elasticity to customer retention, it would demonstrate something quite extraordinary.
There is a strong correlation between the aggregate national ACSI and aggregate corporate profit over time. This is not surprising and reflects the economic relevance of the ACSI® measurement instrument.
The American Customer Satisfaction Index is the only national cross-industry measure of customer satisfaction that represents the U.S. economy. Organizations of all types from a wide range of diverse industries use the respected ACSI methodology to obtain science-based insights across the complete arc of the customer experience.
Offers unique benchmarking capabilites with other industries and select best-in-class companies.
Stable multivariable modeling system for measuring customer satisfaction. Produces accurate, reliable customer experience data.
The only uniform, national, cross-industry measure of customer satisfaction.
Cause-and-effect model measures the drivers and outcomes of customer satisfaction.
ACSI BenchmarksSM gives clients valuable insights for all aspects of their organization’s customer experience, along with the ability to compare results with industry peers and competitors and to perform cross-industry benchmarking with companies they deem “best-in-class” in other industries.
ACSI AnalyticsSM is a powerful tool set that enables clients to leverage the predictive capabilities of the American Customer Satisfaction Index and obtain detailed, actionable insights for improving the customer experience.
Global CSISM enables organizations throughout the world to partner with ACSI and use its powerful, scientific methodology to create customer satisfaction indexes for their own national economies, as well as benchmark with other indexes adopting the ACSI methodology.
ACSI’s web-intercept technology allows you to collect valuable customer feedback across your website. Engage visitors at any point with branded surveys that capture timely and relevant information. Data are analyzed by ACSI’s world-renowned methodology, providing valuable intelligence about your website.
As the only national cross-industry measure of customer satisfaction available in the United States, the American Customer Satisfaction Index is a strategic resource for business, investment, and government communities alike.
