American Customer Satisfaction Index

The American Customer Satisfaction Index (ACSI) is an economic indicator that measures the satisfaction of consumers across the U.S. economy. It is produced by the American Customer Satisfaction Index (ACSI LLC) based in Ann Arbor, Michigan.

The ACSI interviews about 350,000 customers annually and asks about their satisfaction with the goods and services they have purchased and consumed. Respondents are screened to ensure inclusion of actual customers of a wide range of business-to-consumer products and services, including durable goods, services, non-durable goods, local government services, federal government services, and so forth. Customer satisfaction (ACSI) scores are released monthly throughout each calendar year. ACSI data is used by researchers,[1] corporations,[2][3] government agencies,[4] market analysts and investors,[5] industry trade associations, and consumers.

History

ACSI began in 1994, developed by researchers with the National Quality Research Center at the University of Michigan, in cooperation with the American Society for Quality and CFI Group, Inc. The model was originally designed in 1989 for the Swedish economy (the Swedish Customer Satisfaction Barometer (SCSB)). Both the Swedish version and the ACSI were developed by Claes Fornell, Donald C. Cook Distinguished Professor Emeritus of Business Administration at the University of Michigan, and chairman of CFI Group.[6]

ACSI score calculation

A company's ACSI score is derived from three manifest variables (i.e. survey questions) within the ACSI questionnaire, each rated on a 1-10 scale by the respondents interviewed for that company, government agency, or other organization:[7]

Manifest Variable 1 10
Overall satisfaction (X1) Very dissatisfied Very satisfied
Expectancy disconfirmation (X2) Falls short of your expectations Exceeds your expectations
Comparison to an ideal (X3) Not very close to the ideal Very close to the ideal

The 0-100 ACSI score is estimated using the mean for each variable from the n responses for that company (X1, X2, X3), along with the weights for each question as calculated within the ACSI structural equation model (W1, W2, W3):

 (((X1*W1)+(X2*W2)+(X3*W3))-1)/9*100

Sector, industry and company-level findings

ACSI data show that certain sectors, industries and companies have consistently high customer satisfaction, while others are almost always below average (with the National ACSI score reflecting the average). At the sector level, manufacturing — including both durable and non-durable goods — typically have high ACSI scores. The service sector industries, which involve more human intervention in the consumption process, tend 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. Cable television, airlines and telecommunications usually have lower ACSI scores.

Macroeconomic findings

One set of findings discovered by academic researchers involve predictions of macroeconomic growth as functions of changes in aggregate customer satisfaction. For example, ACSI is predictive of Gross Domestic Product (GDP) growth and Personal Consumption Expenditure (PCE) growth.[8]

Stock market findings

In a 2006 paper published in the Journal of Marketing, it was shown that a portfolio of stocks chosen based on their customer satisfaction outperformed the market.[9][10] A 2016 article in the same journal,[11] examining returns from a fund trading exclusively on ACSI data, found that strong satisfaction companies significantly outperformed the S&P 500 (518% to 31%) during the study period (2000-2014).

International adoption of the ACSI model

Research groups, quality associations and universities in several countries are using the ACSI model to create customer satisfaction indices for their own national economies. The list of governments that have adopted the ACSI model include India, Saudi Arabia, Singapore,[6] Dubai, Kuwait, South Africa, Honduras,[12] Puerto Rico,[13] and Colombia.[14] The development of an international system of customer satisfaction measurement founded on a common methodology allows for comprehensive cross-national satisfaction benchmarking.[15]

ACSI licensees

In addition to ACSI LLC, CFI Group LLC is licensed to apply the methodology for individual companies. ACSI Funds, which manages an exchange-traded fund (ETF), uses ACSI data for trading under the ticker symbol "ACSI".[16]

References
  1. Luo, Xueming and C.B. Bhattacharya. (2006) "Corporate Social Responsibility, Customer Satisfaction, and Market Value." Journal of Marketing, Vol. 70, 1-18
  2. "No Fooling – Papa John’s Ushers in April with Tasty New Menu Items."
  3. "ACSI Corporate Subscribers."
  4. "GSA.gov Nets All Time High for Customer Satisfaction."
  5. Brush, Michael. "Happy customers, good stocks," Archived 2011-07-14 at the Wayback Machine MSN Money.
  6. Sipher-Mann, Leah. "Ross Professor Recognized as Top Influential Scholar." Archived 2009-05-09 at the Wayback Machine
  7. American Customer Satisfaction Index, Methodology Report, by Barbara Everitt Bryant, Ph.D., and Professor Claes Fornell; April 2005.
  8. Fornell, Claes, Roland T. Rust and Marnik Dekimpe. (2010) "The Effect of Customer Satisfaction on Consumer Spending Growth." Journal of Marketing Research, Vol. 47, 28-35
  9. Fornell, Claes, et al. (2006), "Customer Satisfaction and Stock Prices: High Returns, Low Risk," Journal of Marketing, Vol. 70, 3-14
  10. Aksoy, Lerzan et al. "The Long Term Stock Market Valuation of Customer Satisfaction," Journal of Marketing, Vol. 72, 105-122
  11. Fornell, Claes, Forrest V. Morgeson III and G. Tomas M. Hult (2016), "Stock Returns on Customer Satisfaction Do Beat the Market: Gauging the Effect of a Marketing Intangible," Journal of Marketing, Vol. 80, 92-107
  12. "Central American Customer Satisfaction Index (CACSI)."
  13. "The Customer Satisfaction Index of Puerto Rico (CSIPR)."
  14. Wong, Alice. "Warming up to better service." Archived 2008-04-10 at the Wayback Machine
  15. Morgeson III, F.V. et al. (2011) "An Investigation of the Cross-National Determinants of Customer Satisfaction." Journal of the Academy of Marketing Science, Vol. 39, 198-215
  16. Cowan, Gerrard. "An ETF That Tracks Happy Customers," Wall Street Journal, March 5, 2017.
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