Tuesday, December 30, 2014

ISPs, Social Media, Subscription TV Score Below Average for Consumer Satisfaction

It might be worth noting that consumer satisfaction is rarely directly related to customer spending, customer retention or churn, even if one assumes the relationship would be quite direct.

Sometimes people keep buying services, and show relatively low churn, even for products they claim to be somewhat unhappy with.

Of the five worst-performing industries routinely tracked by the American Customer Satisfaction Index are Internet social media, health insurance, airlines, subscription TV services and Internet access services.  

Few industries have offered less satisfaction to consumers over time than commercial airlines or several of the telecommunications services, but health insurers have fallen substantially since 2005.

While subscription TV and Internet service providers earn the very lowest ratings among 43 industries in the Index, health insurers share a berth close to both airlines and social media among ACSI’s bottom five industries for customer satisfaction.

Ranked on a 100 point scale, where 100 is the highest score, ISPs score 63, at the very bottom. Video entertainment services rank at 65. Airlines score a 69, health insurance at 70 and social media at 71.

It might be worthwhile to consider that if a highly-used and apparently highly popular and free service such as social media earns only a 71 score, it might not be so clear what is being measured, or why participants rank satisfaction for a well-used and free service lower than average.

Mobile service scores a 72, while fixed service gets a 73 satisfaction score. The average industry scores 76 to 77.  

Most people could think of plausible reasons why dissatisfaction would be high for airlines, communication services or health insurance.

Insurance claims processes are complex and arguably more frequently used than other types of insurance interactions. That means the odds something will prove irritating is higher than for some other products.

High premiums, deductibles and co-pays also provide easy sources of irritation. Constant price hikes for video subscriptions are a constant irritant. It might be harder to understand the unhappiness with Internet access services. 

Perhaps consumers do not like the additional recurring payments or quality perceptions. Airline service unhappiness might be easier to understand. Service quality has declined as providers have struggled to provide the low fares people want, and still earn a profit.

Some products not tracked by the ACSI, such as payments for housing, automobiles or groceries, might well show levels of unhappiness as well, as such expenditures provide constant reminders of how much consumers are having to pay.

Bank of America, which has a large mortgage portfolio, earns a 69 ranking, the same score as earned by airlines.

Consolidated Edison scores a 69 as well.

In other words, it is possible that many monthly subscription services are a cause of irritation.

Other products, even groceries, might escape that source of unpleasantness. Supermarkets as a category earn a 78 score, for example.

Also, keep in mind that the median satisfaction score ranges between 76 and 77. The absolute highest score earned by any industry is 82, the absolute lowest score is 63. ACSI does not provide the equivalent of a "margin of error" for the rankings, but a few points, higher or lower, might be the equivalent of "noise."

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