Are U.S. Consumers More Satisfied with Social Media or ISPs and Video Services?

You might think consumer satisfaction with social media apps such as Twitter, Facebook and LinkedIn would be dramatically higher than for Internet service providers, cable TV companies or telcos.

After all, those these industries traditionally rank at the bottom of satisfaction ratings produced by the American Consumer Satisfaction Index.

But you would be wrong. At least according to ACSI rankings, consumers are less satisfied with the popular social media apps than they are with fixed telephone service and mobile phone service.

On average, those social media apps get higher satisfaction ratings than video entertainment providers and significantly higher satisfaction ratings than Internet service providers. ISPs scored 63, while video services ranked collectively as a 65 for satisfaction.

Time Warner Cable scored an even-worse 60, while Comcast scored 63. AT&T U-verse and DirecTV both scored a 69.

In 2014, Twitter got a score of 69, Facebook earns a score of 67 and LinkedIn has a ranking of 67 as well.

In other words, according to the ACSI ranking, consumers are only about as satisfied with Twitter, Facebook and LinkedIn as they are with their ISPs and video providers. That puts satisfaction with those social media apps near the bottom of all industry rankings.

Among search engines, Google got a high score of 80. Bing and MSN both scored 73.

Major news portals earned an average score of 74.

Perhaps the most surprising finding is that the leading social media apps do not score much higher than ISPs or video entertainment providers, which have been ranked at the bottom of satisfaction rankings.

The top social apps can be used for no incremental cost, where Internet access service and video entertainment are significant cost items.

And one might draw a couple of  conclusions. Consumers are relatively unhappy, but continue to buy because they need the products. Also, consumers are unhappy and feel they have no workable alternatives that are sustainably better than the others.

The gap in scores between some cable firms and their satellite and telco video competitors, though, does suggest growing consumer perception that there are workable alternatives.

Verizon FiOS, for example, garnered much higher scores than most other ISPs. Google Fiber is not tracked, but one suspects its scores would top even those of Verizon.

It isn’t clear that there is a direct causal relationship between satisfaction and spending. But to the extent there is a relationship between satisfaction and consumer spending, a number of industries might have faced first quarter 2014 difficulties in some part because there apparently was a big drop in satisfaction ratings from the fourth quarter of 2013 to the first quarter of 2014.

It likely goes too far to argue, as does the ACSI, that “a sharp first-quarter decline in customer satisfaction contributed to a slowdown in consumer spending growth.”

Most economists say miserable and unusual weather in January 2014 likely was the direct reason for slowed U.S. consumer spending in January.

Still, says ACSI, “the drop in satisfaction in the first three months of 2014 was one of the largest in the 20-year history of the Index—down 0.8 percent to a score of 76.2 on the ACSI’s 100-point scale, from 76.8 the previous quarter.”

One might argue with the contention that “a downturn in satisfaction weakens consumers’ willingness to spend. One might argue something else is at work, such as reduced disposable income or growing anxiety about one’s own fortunes.

On the other hand, simple reversion to the mean would have been expected after record high satisfaction levels seen in the fourth quarter of 2013.

Among the industries with the largest satisfaction score declines are subscription television service (-4.4 percent from an ACSI score of 68 in the fourth quarter of 2013 to 65 in the first quarter of 2014).

Internet service providers fell 3.1 percent from a fourth quarter 2013 score of 65 to a first quarter 2014 score of 63).






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