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American Customer Satisfaction Index ACSI

Quality Insider

Customer Satisfaction: Major Improvements for Most Industries Except Hospitals

Big gains for Microsoft, Sprint, AT&T, Charter, DISH, Samsung, Motorola, CMS Energy and NiSource

Published: Wednesday, May 19, 2010 - 12:55

(ACSI: Ann Arbor, MI) -- Customer satisfaction with the goods and services that Americans buy and consume is steady for the first quarter of 2010, according to the American Customer Satisfaction Index (ACSI). Although the index is unchanged at 75.9 on ACSI’s 100-point scale, its level remains high and almost every industry has improved. Were it not for a slump in satisfaction with hospital care, the overall index would be higher than the previous quarter.

“Following the weakening in customer satisfaction in the latter half of 2007 through late 2008, American businesses have responded to the recession by increasing or stabilizing customer satisfaction,” says Claes Fornell, founder of the ACSI and author of The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference (Palgrave Macmillan, 2008). “There have been far more ACSI gainers than losers. Customer service has improved and buyer value for money is rising. The progress in customer satisfaction is also reflected in growing consumer demand and spending—a key for the economic recovery to be sustainable.”

For its May 2010 release, ACSI measures customer satisfaction with the quality of products and services in the utilities, information, and health care and social assistance sectors.

Verizon FiOS and AT&T U-verse debut on top

Customer satisfaction with cable and satellite TV rises to its highest level in 10 years, up 5 percent to 66, with nearly all companies registering improvements. ACSI measures the relatively newer fiber-optic providers for the first time, and Verizon’s FiOS and AT&T’s U-verse lead the way with scores of 73 and 72, respectively. Satellite TV still leads over traditional cable, with DISH Network soaring 11 percent to 71 to overtake rival DIRECTV for the first time since 2005. DIRECTV falls 3 percent to 68 as aggressive pricing promotions by DISH coupled with a price increase by DIRECTV has the two satellite TV providers moving in opposite directions.

All four of the largest cable providers show some improvement. Charter Communications makes the biggest leap, gaining 18 percent to 60. Although this is still not enough to pull Charter out of last place, it is now statistically tied with Comcast and Time Warner Cable, both up 3 percent to 61. Cox Communications gains 2 percent to 67 to lead all traditional cable companies for a seventh straight year.

“Having enjoyed near monopoly status in most areas for many years, cable companies had little incentive to provide quality services at a good price,” says Fornell. “Now that satellite and fiber-optic TV providers have created a competitive challenge to cable, the cable companies have started to step up customer service and realize some gains in customer satisfaction, but they still remain far behind both satellite and fiber-optics.”

Wireless and fixed-line are dialing up higher satisfaction

Traditional local and long-distance service improves 4 percent to 75, the highest level in more than a decade. AT&T is on top after a 6 percent surge to 75, followed closely by Cox Communications, unchanged at 74, and Verizon, up 3 percent to 73. CenturyLink and Comcast round out the bottom of the industry, with CenturyLink gaining 3 percent to 70 and Comcast rising 2 percent to 68.

Customer satisfaction with wireless telephone service sets a new all-time high for the third consecutive year, rising 4 percent to 72. With wireless looking to be the future of telephone service, providers are ramping up efforts to provide new services, simplified usage plans, and better pricing. T-Mobile gains 3 percent to 73, tying for the lead with Verizon Wireless, which dips 1 percent. AT&T Mobility improves 3 percent to 69. Two years after the iPhone was introduced as an exclusive product, AT&T seems to have made strides to relieve some of the strains on its network caused by the rapid influx of iPhone customers.

Sprint Nextel has the largest improvement, gaining 11 percent to 70 a year after a similarly large 13 percent jump, pushing the wireless carrier from well below to very close to the industry average.

Hospitals take a turn for the worse

Hospitals are taking it on the chin as the quality of inpatient health care and emergency room services declines. The hospital industry plunges 5 percent to 73, its lowest level in six years. Outpatient care at hospitals remains steady, but sharp drops for inpatient and emergency room (ER) services has taken a big toll. By contrast, patient satisfaction with office visits to health care professionals such as doctors, dentists, and optometrists is steady and scores much higher at 80.

“The downturn for hospitals suggests that initiatives to improve the quality of care have not had the desired effect,” notes Fornell. “A combination of a greater focus on outpatient treatments and an increase in the number of after-hours facilities as an alternative to ERs may help relieve some of the pressure on hospitals and reverse or at least slow the downturn in patient satisfaction.”

Microsoft soars with Windows 7

Customer satisfaction with all types of software for personal computers rises 1 percent to 76, an all-time high for the category. Microsoft improves 9 percent to tie the industry at 76, also an all-time high for the largest software maker. After consumers struggled with its Windows Vista software, Microsoft’s release of the Windows 7 upgrade in the fall of 2009 came as a breath of fresh air. Microsoft has parlayed high volume sales of a better quality product into a big boost in customer satisfaction.

Stable pricing equals steady satisfaction

Customer satisfaction with energy utilities is steady at 74 for a third straight year. Prices for natural gas and electricity have been pretty stable and moderate weather conditions in much of the United States have kept power and heating usage at average levels. Sempra Energy strengthens its position atop the industry, improving 4 percent to 83, followed by MidAmerican Energy, unchanged at 79. NiSource and CMS Energy make the biggest gains, up 7 percent to 75 and 72, respectively. Moving in the opposite direction is PPL Corp., falling 6 percent to 74 after a new rate hike took effect in January 2010 that raised prices by as much as 30 percent. Xcel Energy declined nearly as much, dropping 5 percent to 72, while PG&E fell 4 percent to 70. Overall, two-thirds of the measured utilities had either some improvement or were unchanged.


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American Customer Satisfaction Index ACSI

The American Customer Satisfaction Index (ACSI), founded at the University of Michigan’s Ross School of Business and produced by ACSI LLC, is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The national index is updated each quarter and scores on a zero-to-100 scale at the national level. The ACSI produces indexes for 10 economic sectors, 47 industries, more than 225 companies, and more than 200 federal or local government services.