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ACSI Pres 03 Pom 246.ppt


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ACSI Pres 03 Pom 246.ppt

  1. 1. American Customer Satisfaction Index ( ACSI ) You won’t have loyal customers until you have “ completely satisfied customers !” ~William R. Loomis (
  2. 2. ACSI Presentation ’03 <ul><li>Starring-- in alphabetical order : </li></ul><ul><ul><li>Sonja Arnet </li></ul></ul><ul><ul><li>Allen Bischofberger </li></ul></ul><ul><ul><li>Nathan Calabrese </li></ul></ul><ul><ul><li>Jon Carpenter </li></ul></ul><ul><ul><li>Tony Filiberti </li></ul></ul>
  3. 3. ACSI Topics <ul><li>What is ACSI? </li></ul><ul><li>ACSI Metrics </li></ul><ul><li>FAQs about ACSI </li></ul><ul><li>ACSI Model </li></ul><ul><li>Company Examples </li></ul>
  4. 4. What is ACSI?
  5. 5. What it is… <ul><li>ACSI: </li></ul><ul><ul><li>Created in the nineties to be an economic indicator </li></ul></ul><ul><ul><li>A uniform, independent measure of consumption </li></ul></ul><ul><ul><li>tracks customer satisfaction trends and provides helpful benchmarking insights </li></ul></ul>
  6. 6. What it is… <ul><li>An economic tool: </li></ul><ul><ul><li>For creating Industry standards </li></ul></ul><ul><ul><li>For companies to use as a benchmark </li></ul></ul><ul><ul><li>For consumers to use to make better informed purchasing decisions </li></ul></ul>
  7. 7. What it is… <ul><li>The ACSI is based upon information compiled from customer evaluations of goods and services. </li></ul><ul><li>Later we will learn from the ACSI Model how customer satisfaction can lead to either customer loyalty or complaints. </li></ul>
  8. 8. ACSI Metrics
  9. 9. ACSI Measures : <ul><li>Customer satisfaction with the quality of goods and services purchased in the United States over time </li></ul><ul><li>8 economic sectors, 35 industries, 190 companies, and Federal or local agencies* </li></ul><ul><ul><li>Includes domestic and foreign companies that have major market shares in several industries (i.e. Toyota, Honda, etc.) </li></ul></ul>
  10. 10. ACSI Process <ul><li>1. Data is collected </li></ul><ul><ul><li>Collection is done at the individual customer level </li></ul></ul><ul><ul><li>Random telephone interviews of adults (age of 18-84) are conducted to obtain data </li></ul></ul><ul><ul><li>Data collected is regarding the customer’s satisfaction with specific products </li></ul></ul><ul><ul><li>700,000+ consumers are interviewed each year </li></ul></ul><ul><ul><li>ACSI results created for each company are based on 250 customer interviews </li></ul></ul><ul><li>2. Data entered into a multi-equation, econometric model </li></ul>
  11. 11. ACSI Process (cont.) <ul><li>3. Scores are produced </li></ul><ul><ul><li>Reported on a 0-100 scale (0=Lowest;100=Highest) </li></ul></ul><ul><ul><li>Four levels of scores: </li></ul></ul><ul><ul><ul><li>Company -aggregated customer scores </li></ul></ul></ul><ul><ul><ul><li>Industry -average of company scores weighted by the revenues of each company </li></ul></ul></ul><ul><ul><ul><li>Sector -industry scores weighted by industry revenues </li></ul></ul></ul><ul><ul><ul><li>National -sector scores weighted by each sector’s contribution to GDP </li></ul></ul></ul><ul><ul><li>Company Example </li></ul></ul>
  12. 12. The Result <ul><li>ACSI produces company-level satisfaction scores </li></ul><ul><li>Produces scores for the causes and consequences of customer satisfaction, and their relationships </li></ul><ul><li>Answers the questions: </li></ul><ul><ul><li>Are customer satisfaction and evaluations of quality improving or declining for the nation’s output of goods and services? </li></ul></ul><ul><ul><li>Are they improving or declining for particular sectors of industry, for specific industries, or for specific companies? </li></ul></ul>
  13. 13. FAQs about ACSI
  14. 14. Query #1 <ul><li>Who is behind the ACSI & how is it funded? </li></ul><ul><ul><li>Developed by the National Quality Research Center at the University of Michigan </li></ul></ul><ul><ul><li>Co-sponsored by ASQ, CFI Group and the University of Michigan Business School </li></ul></ul><ul><ul><li>Corporate subscribers  </li></ul></ul><ul><ul><li>Sales of ACSI reports </li></ul></ul>
  15. 15. Query #2 <ul><li>Who benefits from ACSI? </li></ul><ul><ul><li>American consumers   </li></ul></ul><ul><ul><li>Companies    </li></ul></ul><ul><ul><li>Comparing quality   </li></ul></ul><ul><ul><li>Software available </li></ul></ul>
  16. 16. Query #3 <ul><li>When were ACSI results first released? </li></ul><ul><ul><li>October, 1994    </li></ul></ul><ul><ul><li>3rd Monday of February, May, August, November, & December </li></ul></ul>
  17. 17. Query #4 <ul><li>What kind of information is available to what companies? </li></ul><ul><ul><li>Any ACSI subscriber   </li></ul></ul><ul><ul><li>Corporate subscribers    </li></ul></ul><ul><ul><li>Also in Fortune, BusinessWeek </li></ul></ul>
  18. 18. Query #5 <ul><li>Can a company not included not included in ACSI get its own customer satisfaction index? </li></ul><ul><ul><li>Pay a fee to receive:      </li></ul></ul><ul><ul><ul><li>index      </li></ul></ul></ul><ul><ul><ul><li>custom research </li></ul></ul></ul>
  19. 19. Query #6 <ul><li>How many companies are reviewed through ACSI? </li></ul><ul><ul><li>Approx. 200 companies   </li></ul></ul><ul><ul><li>70 segments of federal agencies    </li></ul></ul><ul><ul><li>two local government services: </li></ul></ul><ul><ul><ul><li>Police </li></ul></ul></ul><ul><ul><ul><li>solid waste </li></ul></ul></ul><ul><ul><li>Specific companies are included and excluded </li></ul></ul>
  20. 20. ACSI Model
  21. 21. ACSI Model <ul><li>Elements of the ACSI Model </li></ul><ul><ul><li>Customer expectations </li></ul></ul><ul><ul><li>Perceived Quality </li></ul></ul><ul><ul><li>Perceived value </li></ul></ul><ul><ul><li>Satisfaction </li></ul></ul><ul><ul><li>Customer complaints </li></ul></ul><ul><ul><li>Customer Loyalty </li></ul></ul>
  22. 22. ACSI Model <ul><li>Customer expectation </li></ul><ul><ul><li>customers experiences with product or service and information about it </li></ul></ul><ul><ul><ul><li>media </li></ul></ul></ul><ul><ul><ul><li>advertising </li></ul></ul></ul><ul><ul><ul><li>salesperson </li></ul></ul></ul><ul><ul><ul><li>word of mouth from other customers </li></ul></ul></ul><ul><ul><li>customers expectation influence the evaluation of quality and forecast how well the product or service will perform </li></ul></ul>
  23. 23. ACSI Model <ul><li>Perceived quality </li></ul><ul><ul><li>Three questions measure the perceived quality </li></ul></ul><ul><ul><ul><li>overall quality </li></ul></ul></ul><ul><ul><ul><li>reliability </li></ul></ul></ul><ul><ul><ul><li>the extent to which a product or service meets the customers needs </li></ul></ul></ul><ul><ul><li>Perceived quality proves to have the greatest impact on customer satisfaction. </li></ul></ul>
  24. 24. ACSI Model <ul><li>Perceived Value </li></ul><ul><ul><li>Two questions measure the perceived value </li></ul></ul><ul><ul><ul><li>overall price given quality </li></ul></ul></ul><ul><ul><ul><li>overall quality given price </li></ul></ul></ul><ul><ul><li>Perceived price is usually only important in the first purchase decision. </li></ul></ul>
  25. 25. ACSI Model <ul><li>Customer complaints </li></ul><ul><ul><li>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. </li></ul></ul>
  26. 26. ACSI Model <ul><li>Customer loyalty </li></ul><ul><ul><li>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 </li></ul></ul>
  27. 27. Company Examples
  28. 28. National, Economy, Sectors and Industries <ul><li>ACSI divides Economy by type of good produced </li></ul><ul><ul><li>8 major divisions </li></ul></ul><ul><ul><ul><li>Each division has quarterly report </li></ul></ul></ul><ul><ul><ul><li>Reports available from US Government, University of Michigan, and ACSI </li></ul></ul></ul><ul><ul><li>Newest Division, E-Commerce highly monitored </li></ul></ul><ul><ul><ul><li>Fast paced, highly dynamic </li></ul></ul></ul><ul><ul><ul><li>many new companies </li></ul></ul></ul><ul><ul><ul><li>can be used somewhat successfully to determine stock profitability </li></ul></ul></ul>
  29. 29. National, Economy, Sectors and Industries <ul><li>Sections covered by ACSI (with %GDP) </li></ul><ul><ul><li>Transportation/Communications/Utilities (8.4%) </li></ul></ul><ul><ul><ul><li>Airlines </li></ul></ul></ul><ul><ul><ul><li>Cable/Satellite TV providers/Newspapers </li></ul></ul></ul><ul><ul><ul><li>Express Mail </li></ul></ul></ul><ul><ul><li>Manufacturing Durables (9.1%) </li></ul></ul><ul><ul><ul><li>Automobiles </li></ul></ul></ul><ul><ul><ul><li>Household Appliances </li></ul></ul></ul><ul><ul><ul><li>Computers/TV/VCR </li></ul></ul></ul><ul><ul><li>Manufacturing Non-Durables (6.7%) </li></ul></ul><ul><ul><ul><li>Beverages/beer </li></ul></ul></ul><ul><ul><ul><li>Food Processing </li></ul></ul></ul><ul><ul><ul><li>Personal Care/Cleaning Products </li></ul></ul></ul>
  30. 30. National, Economy, Sectors and Industries <ul><li>Sections covered by ACSI (cont.) </li></ul><ul><ul><li>E-Commerce (calculated GDP found in other sections) </li></ul></ul><ul><ul><ul><li>Auctions </li></ul></ul></ul><ul><ul><ul><li>Portals </li></ul></ul></ul><ul><ul><ul><li>Retail </li></ul></ul></ul><ul><ul><li>Finance and Insurance (8.4%) </li></ul></ul><ul><ul><ul><li>Banks </li></ul></ul></ul><ul><ul><ul><li>Insurance </li></ul></ul></ul><ul><ul><li>Retail (9.1%) </li></ul></ul><ul><ul><ul><li>Restaurants </li></ul></ul></ul><ul><ul><ul><li>Service Stations </li></ul></ul></ul><ul><ul><ul><li>Specialty and high volume Retail </li></ul></ul></ul>
  31. 31. National, Economy, Sectors and Industries <ul><li>Sections covered by ACSI (with %GDP) </li></ul><ul><ul><li>Public Administration/Government (9.4%) </li></ul></ul><ul><ul><ul><li>Police (metro) </li></ul></ul></ul><ul><ul><ul><li>Federal Agencies </li></ul></ul></ul><ul><ul><ul><li>Solid waste (metro) </li></ul></ul></ul><ul><ul><li>Services (21.9%) </li></ul></ul><ul><ul><ul><li>Hospitals </li></ul></ul></ul><ul><ul><ul><li>Hotels </li></ul></ul></ul><ul><ul><ul><li>Motion Pictures </li></ul></ul></ul>
  32. 32. Corporate Subscribers <ul><li>Corporate Subscribers Belong to ACSI or other organizations such as the CSMA (Consumer Satisfaction Measurement Association) </li></ul><ul><li>CSMA is a group of companies that conducts benchmarking studies in order to improve customer satisfaction. </li></ul><ul><li>CSMA has many more international members than ACSI </li></ul>
  33. 33. Corporate Subscribers <ul><li>Notable ACSI Members </li></ul><ul><ul><li>AAFES </li></ul></ul><ul><ul><li>Bank of America </li></ul></ul><ul><ul><li>Bell South </li></ul></ul><ul><ul><li>Direct TV </li></ul></ul><ul><ul><li>Domino’s </li></ul></ul><ul><ul><li>Home Depot </li></ul></ul><ul><ul><li>US Department of Labor </li></ul></ul><ul><ul><li>K-mart </li></ul></ul><ul><ul><li>US Postal Service </li></ul></ul><ul><ul><li>Verizon </li></ul></ul>
  34. 34. Corporate Subscribers <ul><li>Notable CSMA Members </li></ul><ul><ul><li>MCI Worldcom </li></ul></ul><ul><ul><li>Department of the Army </li></ul></ul><ul><ul><li>Honeywell </li></ul></ul><ul><ul><li>Rockwell Electronic </li></ul></ul><ul><ul><li>Payless Shoe Source </li></ul></ul><ul><ul><li>Pitney Bowes </li></ul></ul><ul><ul><li>Steel Authority of India </li></ul></ul><ul><ul><li>Boeing </li></ul></ul><ul><ul><li>Unisys </li></ul></ul><ul><ul><li>Fiat </li></ul></ul>
  35. 35. ACSI Case Study-Dow Corning <ul><li>Dow Corning </li></ul><ul><ul><li>Founded in 1943 </li></ul></ul><ul><ul><li>$2.7 Billion </li></ul></ul><ul><ul><li>25,000 companies supplied with Dow products </li></ul></ul><ul><ul><ul><li>Over 7,000 products </li></ul></ul></ul><ul><ul><ul><ul><li>Ceramics </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Lubricants </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Aerospace </li></ul></ul></ul></ul>
  36. 36. ACSI Case Study-Dow Corning <ul><li>Mid 1990’s saw the emergence of a strong silicon based industry </li></ul><ul><ul><li>Needed to gain competitive advantage </li></ul></ul><ul><ul><li>Produce performance-enhancing material </li></ul></ul><ul><ul><li>Fix global Supply Chain </li></ul></ul><ul><ul><li>Improve Customer satisfaction index </li></ul></ul>
  37. 37. ACSI Case Study-Dow Corning <ul><li>ACSI style surveys used as an indicator for Customer satisfaction improvement </li></ul><ul><li>Based on Customer complaints </li></ul><ul><li>Globalization stretched Supply chain </li></ul><ul><li>SAP created Supply Chain Management software </li></ul>
  38. 38. ACSI Case Study-Dow Corning <ul><li>SAP Software improvements </li></ul><ul><ul><li>Reduced lead time </li></ul></ul><ul><ul><ul><li>9-20% depending on product </li></ul></ul></ul><ul><ul><li>Quicker shipping to worldwide customers </li></ul></ul><ul><ul><ul><li>Reduced significantly </li></ul></ul></ul><ul><ul><li>Overall improvement in responsiveness </li></ul></ul><ul><ul><ul><li>Orders processed more quickly </li></ul></ul></ul>
  39. 39. ACSI Case Study-Dow Corning <ul><li>Results </li></ul><ul><ul><li>Quicker ship times lead to higher customer satisfaction </li></ul></ul><ul><ul><li>Reduced inventory keeps administrative and warehousing costs low </li></ul></ul><ul><ul><li>Increase in customer satisfaction helps retain investors (stockholders) </li></ul></ul><ul><ul><li>Improved forecasting accuracy, especially for custom orders </li></ul></ul>
  40. 40. Conclusion <ul><li>What ACSI is as an financial tool </li></ul><ul><li>How it measures Customer Satisfaction </li></ul><ul><li>The ACSI model ( a g reat exam question! ) </li></ul><ul><li>The Dow Corning case study </li></ul>
  41. 41. References <ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>Text: The Management & Control of Quality, </li></ul><ul><li>5 th ed., by Evans & Lindsay, 2002. </li></ul>
  42. 42. The End <ul><li>Any questions? </li></ul>