ANN ARBOUR, Mich.–(BUSINESS WIRE)–Customer satisfaction in the United States continues to fall. Not only has it declined for three consecutive quarters; it has plunged 5% since 2018, the biggest drop in ACSI’s 28-year history. It now sits at 73.1 (on a scale of 0 to 100) and has fallen in 12 of the past 15 quarters.
GDP has also declined over the past two quarters. In fact, the general trend is similar to what happened during the financial crisis of 2009 and the emergence of COVID-19 in 2020: GDP and ACSI have declined.
However, what we have now is different and more complicated than previous economic contractions. It is unusual for the quantity and quality of economic output, as reflected by GDP and ACSI respectively, to fall in a buoyant labor market. It is also unusual for consumer spending to increase. Not only is it the largest component of GDP, but it’s also associated with increasing – not decreasing – customer satisfaction. But that’s the economy we have today – full of contradictions. To make matters worse, inflation is likely even higher than reported as it is not fully adjusted for lower quality, especially in services, as evidenced by ACSI data.
“Rising interest rates is the conventional prescription for curbing inflation and cooling an overheated market. Yet the current economic situation presents unconventional challenges,” said Claes Fornell, ACSI Founder and Donald C. Cook Professor Emeritus of Business Administration at the University of Michigan. “If shortages, shipping issues, labor shortages and other supply issues cause demand to exceed supply, prices may continue to soar. be, customer satisfaction will matter then less for business. In a scarcity economy, businesses don’t need to compete much to attract customers. Instead, consumers are competing to be first in line and to get what is available. »
At the same time, some industries are now suffering from the opposite problem: overstocking with more inventory than demand warrants. Thus, prices will fall for certain products. While high demand due to high levels of customer satisfaction tends to increase a firm’s pricing power, so does in a scarcity economy, but regardless of customer satisfaction. In other words, overstocking and declining customer satisfaction put pressure on prices. The paradox here is that falling customer satisfaction can help dampen inflation, but only in sectors without supply problems. However, the industries that have seen the largest declines in customer satisfaction (since 2018) are those with supply constraints, primarily in labor. Examples are hospitals (-9%), hotels (-7%) and express delivery (-9%). Industries with large price increases also have more dissatisfied customers, for example, gas stations (-8%), beer (-7%) and utilities (-5%). At the other end of the spectrum are industries that are less dependent on services. To the extent that they can prevent customers from actually needing a service, they have seen an increase in ACSI. For example, customer satisfaction for cable television increased by almost 7%, Internet services by 3% and personal computers by 3%.
The national ACSI score (or ACSI composite) is updated quarterly based on annualized customer satisfaction scores for all sectors and industries. To learn more, follow the US Customer Satisfaction Index at LinkedIn and Twitter at @theACSI or visit www.theacsi.org.
No advertising or other promotional use may be made of the data and information contained in this release without the prior express written permission of ACSI LLC.
The US Customer Satisfaction Index (ACSI®) has been a national economic indicator for 25 years. It measures and analyzes customer satisfaction with more than 400 companies in 47 industries and 10 economic sectors, including various federal and local government agency services. Reported on a scale of 0 to 100, the scores are based on interview data with approximately 500,000 customers per year. For more information, visit www.theacsi.org.
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