American Customer Satisfaction Index

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The American Customer Satisfaction Index (ACSI) is a leading indicator of customer satisfaction, measuring the satisfaction of consumers across the entire 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. The resulting information is used in academic research, for corporate and organizational decision-making, by industry trade associations, and by market analysts and investors. The ACSI data is also made publicly available in an effort to aid consumers in making better-informed consumption choices.

Contents 1 History 2 ACSI Methodology 3 ACSI National, Sector, Industry and Company Measures 4 Sector, Industry and Company-Level Findings 5 Macroeconomic Findings 6 External links 7 ACSI Literature

[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 variant 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 methods to measure and analyze customer satisfaction: customer interviewing and econometric modeling. Beginning with the latter, professional telephone interviewers working for a market research firm contracted by the ACSI collect data (in the form of survey responses) from randomly selected and screened customers of particular companies and organizations. The random-digit dial method of sampling is used to identify potential respondents, guaranteeing a more accurate representation of the U.S. consumer population.

Once collected, the ACSI inputs this data into a causal model for analysis. The analysis provides both scores for particular 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 proxies. 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, however, 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, these facts permit benchmarking between companies and organizations.

[edit] ACSI National, Sector, Industry and Company Measures

Using these methodological and analytical techniques, the 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.

[edit] Sector, Industry and Company-Level Findings

Twelve years of ACSI data has 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 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, 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.

[edit] Macroeconomic Findings

One interesting set of findings discovered by ACSI researchers involve predictions of macroeconomic changes 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 determinants. Finally, ACSI data has been found to predict stock market performance, both for market indices and for individually traded companies (see the 2006 Journal of Marketing article cited below).

[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.