Wednesday, May 4, 2016

U.S. Consumer Satisfaction Falls for 8 Straight Quarters

Somehow, no matter what investments U.S. businesses are making to better serve their customers, consumer satisfaction continues to fall.

A steep downward trajectory in national customer satisfaction continues, as the free fall of the American Customer Satisfaction Index (ACSI) reaches the two-year mark.

The aggregate ACSI score for the fourth quarter of 2015 is down 0.5 percent to 73.4 on a 100-point scale, its lowest score in a decade after eight consecutive quarters of decline.

Customer satisfaction might not be identical to the equally nebulous concept of “quality of experience,” but one has to presume that less satisfied consumers are experiencing declining
Experiences with a broad array of services and products.

Perhaps significantly, the ACSI suggests that, although he cause of the sustained decline in customer satisfaction is unclear,”  it does coincide with a weakening of corporate earnings and with a reduction in unemployment.

“When unemployment is high, the job market is more competitive and employees in the service sector often make an extra effort to ensure that customers are satisfied,” ACSI says. “As job security has strengthened over the past two years, perhaps that extra effort is no longer there.”

Paradoxically, ACSI suggests, higher employment possibly has lead to less effort by suppliers to keep customers happy.

Even more telling, ACSI suggests that price increases and lack of wage growth are factors.

With consumer product price hikes outpacing wage gains, people probably are experiencing declining “value,” as price rises.

That might be instructive: “quality of experience” is never under the full control of any supplier.

You often will hear that “quality of experience” matters for a consumer service, and that arguably is true, at a high level. But QoE also is horrendously complicated, as it includes every element that contributes to a customer’s use of a service.

“Quality” is what a consumer says it is. And sometimes, “quality” means low price, wide selection or some other element, not necessarily “best performance” in a technical sense.

Netflix speed index results for the United States show relatively modest differences between ISPs, in terms of “speed,” for example, where it relates directly to the ability to support Netflix streaming.

YouTube analysis also often shows relatively similar rankings for cable TV and telco performance, as well.   

In some cases, content availability outweighs “quality” measures. In the old analog video business, the quip often was made that consumers would choose, and value, wide variety of content access over image quality.

The evidence was mass markets for video cassette rentals, even if image quality was inferior to other image sources, such as linear TV delivered over cable TV networks.

In most markets, quality matters. But so does “price”  and any number of other elements, typically including customer service, accurate, clear billing and so forth. So “value” is the issue.

“Quality of experience” is a bit tough for end users to measure, or for service providers to provide. But it is not hard to argue that QoE still is dominated by “speeds and feeds” as well as price, despite the many other elements that play a part.

A survey conducted by Incognito Software illustrates the point. Asked what contributes to their perceived quality of experience, 45 percent of respondents said “speed.”

When asked what would most-immediately improve experience, 39 percent suggested “price” was too high. But 25 percent, the second-greatest number of responses, concerned “speed” that was too slow.

And that might be the perennial problem: on what fundamental basis should any high speed access service be evaluated, if not on “speed” and “cost.” Some of us might add “latency,” but that is very hard for an end user to evaluate, across providers.

Network reliability might not be the issue it once was, in the sense that all the major providers arguably operate networks that are roughly comparable, in terms of outage performance, for example.

Performance-affecting impairments were more important when most connections were of relatively low bandwidth (sub-2 Mbps, for example), but impairments are much less troublesome now that speeds routinely have climbed up into the scores to hundreds of megabits per second range.

Network quality is tough for consumers to evaluate, if they can evaluate that element at all, some might argue.

The larger point is that quality of experience is tough to measure, tough to enhance or control, when macroeconomic forces such as wage growth and unemployment apparently have such large impact.

No comments:

"5G or 4G" Will Not Matter for Most Users, in Practice

It already is tough to determine what “5G speed” actually means, as early 5G often is based as much on 4G as 5G. And the problem of a...