U.S. Customer Satisfaction Growth Stagnates, ACSI Data Show

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U.S. Customer Satisfaction Growth Stagnates, ACSI Data Show

2024-08-13 20:01 Last Updated At：20:21

ANN ARBOR, Mich.--(BUSINESS WIRE)--Aug 13, 2024--

The sharp recovery in the quality of U.S. economic output over the past two years as measured by the American Customer Satisfaction Index (ACSI ® ) is now stagnating. At the national level, customer satisfaction is down 0.1% in the second quarter of 2024 to a score of 77.9 (on a 0-100 scale). Even though there has been a large increase in customer satisfaction over the past two years, it is not much higher now than it was in 2013.

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While some companies have managed to significantly improve the satisfaction of their customers over the past decade — and benefited from it financially — many have not. Despite large corporate investments in customer experience management, there has only been a marginal increase in the national ACSI score.

There are several reasons for this, but rising customer expectations, an often-suggested culprit, is not one of them. ACSI data show that customer expectations are almost always higher than their subsequent satisfaction, but the gap has remained unchanged over the years. Businesses’ lack of data about consumers is not a problem either. Companies have more data on their customers today than ever before. But data need processing and powerful analytics. Consumer data are noisy, highly collinear, and do not follow standard probability distributions. There are methods for handling this, but they remain mostly absent in company customer data analytics.

“Strong and increasing levels of customer satisfaction improve customer loyalty, which has an exponentially cumulative effect on profit,” said Claes Fornell, founder of the ACSI and the Distinguished Donald C. Cook Professor (emeritus) of Business Administration at the University of Michigan. “Loyal customers also lower business risk, and low risk/high return leads to long-term profitability. In the aggregate, it also has a positive effect on the economy. Although the national ACSI score is only up marginally from a decade ago, it is nevertheless near record levels. The economy has been strong with solid GDP growth, inflation decline, robust consumer spending, and exceptional employment growth.”

Consistent with the present lack of growth in customer satisfaction, however, there are now signs that household spending is slowing and consumers are becoming more budget conscious. This may well lead to a reduction in consumer spending growth, the largest component of GDP. If so, some industries are now more vulnerable than others.

Just as price elasticity varies across industries, so does quality (satisfaction) elasticity. Companies in industries with high elasticity have the most to gain from positive changes in customer satisfaction but also have the most to lose from negative changes. According to ACSI data, high-elasticity industries include credit unions, banks, subscription TV providers, internet service providers (ISPs), and financial advisors. Gas stations and supermarkets are on the opposite side of the spectrum. It is not that companies in these industries are immune to declining customer satisfaction, but the effect of it would be less dramatic.

As the quality of economic output, as judged by those who consume it, stagnates or deteriorates, consumer spending may follow suit with negative consequences for further economic growth, as well as for labor and equity markets. The U.S. economy is not there yet, but there are warning signals.

The national ACSI score (or ACSI composite) is updated each quarter based on annualized customer satisfaction scores for all sectors and industries. For more, follow the American Customer Satisfaction Index on LinkedIn and X at @theACSI or visit www.theacsi.org.

No advertising or other promotional use can be made of the data and information in this release without the express prior written consent of ACSI LLC.

About the ACSI

The American Customer Satisfaction Index (ACSI®) has been a national economic indicator for over 25 years. It measures and analyzes customer satisfaction with approximately 400 companies in about 40 industries and 10 economic sectors, including various services of federal and local government agencies. Reported on a scale of 0 to 100, scores are based on data from interviews with roughly 200,000 responses annually. For more information, visit www.theacsi.org.

ACSI and its logo are Registered Marks of American Customer Satisfaction Index LLC.

AP PHOTOS: Cascading disasters push residents of a Nepalese valley to the brink

2024-09-21 10:29 Last Updated At：10:31

MELAMCHI, Nepal (AP) — In between the Himalayas' towering mountains, the town of Melamchi is no stranger to extreme weather, and its landscape bears the scars of years of floods and landslides.

Located just 50 kilometers (31 miles) outside Kathmandu, lush green mountainsides are dotted with landslips and rubble. Amid the debris, people live and work, and children play.

Saroj Lamichane, a 24-year-old resident of the region, says he still remembers “the terrifying sound of the flood.” Lamichane fled that night, returning only to collect belongings wedged between boulders and broken walls.

Many houses in Melamchi are on stilts to avoid the worst of the flooding. Still, floors are covered in a layer of loose rock. Windows have been ripped out of walls. And some buildings still slant after Nepal's devastating 2015 earthquake.

Farms are also not spared.

Sukuram Tamang, 50, lost his land and field to floods in 2021, and his home was damaged in a landslide this year. When The Associated Press visited, Tamang stood holding one of his goats — a literal handful of what survived Melamchi's incessant weather extremes.

“Even the little that remained has been swept away by floods earlier this year,” said Tamang's wife, Maya. “The river used to be a 20-minute walk from our house but during the floods, we were shocked to see it overflow and wash away everything we had.”

Another farmer, Sita Pandit, 50, took a loan to rebuild her home that was destroyed in the earthquake. But one year after construction finished, her new home was swept away by the 2021 floods. Rocks and debris now cover her farm.

In a 2021 report, the Kathmandu headquartered International Centre for Integrated Mountain Development found that cascading hazards are becoming more common in Nepal and the Hindu Kush Himalaya.

Rising temperatures are leading to heavy glacial melt and glacial lakes overflowing. They also lead to shifting rainfall patterns which bring heavy sediments downstream, said Sudan Bikash Maharjan, one of the authors of the 2021 report.

Maharjan said local and federal governments need to be better prepared and give people time to evacuate.

Until then, many work hard to rebuild their old lives. People reconstruct homes among the debris or build new ones entirely. They walk and live among pieces of homes and furniture. Layers of mud cover up the lives they once lived.

Follow Niranjan Shrestha on Instagram.

The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.