American Customer Satisfaction Index ( ACSI ) You won’t have loyal customers until you have “ completely satisfied customers !” ~William R. Loomis (baldridgeplus.com)
ACSI Presentation ’03
Starring-- in alphabetical order :
What is ACSI?
What it is… Created in the nineties to be an economic indicator A uniform, independent measure of consumption
tracks customer satisfaction trends and provides helpful benchmarking insights
What it is… For creating Industry standards For companies to use as a benchmark
For consumers to use to make better informed purchasing decisions
What it is… The ACSI is based upon information compiled from customer evaluations of goods and services.
Later we will learn from the ACSI Model how customer satisfaction can lead to either customer loyalty or complaints.
ACSI Measures : Customer satisfaction with the quality of goods and services purchased in the United States over time 8 economic sectors, 35 industries, 190 companies, and Federal or local agencies*
Includes domestic and foreign companies that have major market shares in several industries (i.e. Toyota, Honda, etc.)
ACSI Process Collection is done at the individual customer level Random telephone interviews of adults (age of 18-84) are conducted to obtain data Data collected is regarding the customer’s satisfaction with specific products 700,000+ consumers are interviewed each year ACSI results created for each company are based on 250 customer interviews
2. Data entered into a multi-equation, econometric model
ACSI Process (cont.) Reported on a 0-100 scale (0=Lowest;100=Highest) Company -aggregated customer scores Industry -average of company scores weighted by the revenues of each company Sector -industry scores weighted by industry revenues
National -sector scores weighted by each sector’s contribution to GDP
The Result ACSI produces company-level satisfaction scores Produces scores for the causes and consequences of customer satisfaction, and their relationships Are customer satisfaction and evaluations of quality improving or declining for the nation’s output of goods and services?
Are they improving or declining for particular sectors of industry, for specific industries, or for specific companies?
FAQs about ACSI
Query #1 Who is behind the ACSI & how is it funded? Developed by the National Quality Research Center at the University of Michigan
Co-sponsored by ASQ, CFI Group and the University of Michigan Business School
Query #3 When were ACSI results first released?
3rd Monday of February, May, August, November, & December
Query #4 What kind of information is available to what companies?
Also in Fortune, BusinessWeek
Can a company not included not included in ACSI get its own customer satisfaction index?
Query #6 How many companies are reviewed through ACSI? 70 segments of federal agencies two local government services:
Specific companies are included and excluded
Elements of the ACSI Model
ACSI Model customers experiences with product or service and information about it word of mouth from other customers
customers expectation influence the evaluation of quality and forecast how well the product or service will perform
ACSI Model Three questions measure the perceived quality the extent to which a product or service meets the customers needs
Perceived quality proves to have the greatest impact on customer satisfaction.
ACSI Model Two questions measure the perceived value overall price given quality overall quality given price
Perceived price is usually only important in the first purchase decision.
Customer complaint activity is measured as the percentage of respondents who reported a problem with a company’s product or service within a specified time frame. Satisfaction has an inverse relationship to customer complaints.
Customer loyalty is measured through questions on the likelihood to purchase a company’s products or services at various price points. Customer satisfaction has a positive effect on loyalty, but the magnitude of that effect varies greatly across companies and industries
National, Economy, Sectors and Industries ACSI divides Economy by type of good produced Each division has quarterly report Reports available from US Government, University of Michigan, and ACSI Newest Division, E-Commerce highly monitored Fast paced, highly dynamic
can be used somewhat successfully to determine stock profitability
National, Economy, Sectors and Industries Sections covered by ACSI (with %GDP) Transportation/Communications/Utilities (8.4%) Cable/Satellite TV providers/Newspapers Manufacturing Durables (9.1%) Manufacturing Non-Durables (6.7%)
Personal Care/Cleaning Products
National, Economy, Sectors and Industries Sections covered by ACSI (cont.) E-Commerce (calculated GDP found in other sections) Finance and Insurance (8.4%)
Specialty and high volume Retail
National, Economy, Sectors and Industries Sections covered by ACSI (with %GDP)
Public Administration/Government (9.4%)
Corporate Subscribers Corporate Subscribers Belong to ACSI or other organizations such as the CSMA (Consumer Satisfaction Measurement Association) CSMA is a group of companies that conducts benchmarking studies in order to improve customer satisfaction.
CSMA has many more international members than ACSI
ACSI Case Study-Dow Corning
25,000 companies supplied with Dow products
ACSI Case Study-Dow Corning Mid 1990’s saw the emergence of a strong silicon based industry Needed to gain competitive advantage Produce performance-enhancing material
Improve Customer satisfaction index
ACSI Case Study-Dow Corning ACSI style surveys used as an indicator for Customer satisfaction improvement Based on Customer complaints Globalization stretched Supply chain
SAP created Supply Chain Management software
ACSI Case Study-Dow Corning SAP Software improvements 9-20% depending on product Quicker shipping to worldwide customers Overall improvement in responsiveness
Orders processed more quickly
ACSI Case Study-Dow Corning Quicker ship times lead to higher customer satisfaction Reduced inventory keeps administrative and warehousing costs low Increase in customer satisfaction helps retain investors (stockholders)
Improved forecasting accuracy, especially for custom orders
Conclusion What ACSI is as an financial tool How it measures Customer Satisfaction The ACSI model ( a g reat exam question! )
The Dow Corning case study
References http://www.theacsi.com/overview.htm http://www.baldrigeplus.com http://www.flash.net/~benchmar/csma.html Text: The Management & Control of Quality,
5 th ed., by Evans & Lindsay, 2002.