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American Customer Satisfaction Index ACSI

Quality Insider

ACSI: Airline Service Improves; Fast Food Overtakes Sit-Down Restaurants

Southwest, Starbucks, and UPS stumble; JetBlue makes strong debut

Published: Monday, June 18, 2012 - 11:34

Major airlines are doing a better job of satisfying their passengers this year, according to a report released by the American Customer Satisfaction Index (ACSI). At 67 (on a scale of zero to 100), customer satisfaction with the airline industry matches its best level in a decade, but there is plenty of room for improvement. Despite gaining 3.1 percent for 2012, airlines remain in the bottom three among 47 ACSI industries, along with subscription TV service (66) and the fast-fading newspaper industry (64).

“High ticket prices, growing fees, and poor service are not a formula for strong customer satisfaction in the airline industry,” says Claes Fornell, ACSI founder and author of the book, The Satisfied Customer: Winners and Losers in the Battle for Buyer Preference (Palgrave Macmillan, 2008). “The industry is doing a better job of serving business travelers, as witnessed by the rise in their overall customer satisfaction—from 61 last year to 66 in 2012—but leisure travelers remain far more satisfied with a score of 71.”

The ACSI’s June report covers customer satisfaction with airlines, hotels, full-service restaurants, fast food chains, consumer shipping, and the mail services of the United States Postal Service (USPS).

Airlines: JetBlue replaces Southwest as industry leader

After 18 years of nearly undisputed customer satisfaction leadership in the airline industry, Southwest has relinquished first place to ACSI newcomer JetBlue. For 2012, JetBlue debuts at 81, the same score that Southwest led with in 2011. Meanwhile, Southwest’s merger with low-cost competitor AirTran seems to have dampened its passenger satisfaction, as the airline declined 5 percent to second place at 77.

“Airline mergers tend to create significant passenger dissatisfaction in the short term as operations are combined and consolidated,” notes Fornell. “Southwest’s share value has declined 20 percent over the past year while the rest of the market stayed largely unscathed, with most major airlines flat or improving.”

Last year, Delta’s ACSI score tanked following its merger with Northwest. This year, Delta rebounded 16 percent to 65—a score that remains quite low, but is no longer last place. US Airways gained 7 percent and tied Delta at 65. American Airlines and United show small 2-percent increases for 2012, but both remain poor ACSI performers at 64 and 62, respectively.

In contrast to these large legacy airlines, the aggregate of all other airlines (such as small carrier Alaska Air Group, or low-cost operators Spirit and Frontier Airlines) are doing a better job of pleasing passengers, despite a 3-percent downturn to 74.

Hotels: Leisure travelers happier than business guests

Customer satisfaction with hotels is stable at 77, which is much higher than airlines, but lower than either restaurant category this year. Business travelers are less satisfied with their chosen hotels than vacationers (ACSI score of 72 compared with 77), which mimics results for the airline industry. There is little movement among the top hotel brands. Among eight major chains, five show ACSI changes of 1 percent or less compared to 2011.

Hilton retains the industry lead with an unchanged ACSI score of 80, followed by Marriott at 78. InterContinental ties the aggregate of smaller chains and individual hotels at 77. A trio of companies is deadlocked at 76: Hyatt, Best Western, and an improved Choice Hotels (+3%). Starwood drops back to 75 after a 5-percent loss, while budget-brand operator Wyndham trails the field at 70 (–4%).

Restaurants: Applebee’s, SUBWAY, and Dunkin’ Donuts premiere in the ACSI

For 2012, the ACSI adds three restaurants to its roster: Applebee’s in the full-service category, and Subway and Dunkin’ Donuts in the fast food category. For the first time in ACSI history, sit-down chains tie rather than lead fast food. For the former, this year has brought a loss of 2.4 percent, while fast food has kept climbing—up 1.3 percent to an all-time high of 80.

“The opposing customer satisfaction trends for full-service outlets versus fast food are all the more troubling for sit-down restaurant operators given the current weak economy,” says Fornell. “The juxtaposition of low prices with newly improved quality makes fast food an attractive option for budget-conscious diners. It’s a safe bet that fast food will make further inroads into the traditional restaurant business.”

Pizza makers continue to stake out the high end of the fast food industry, with Papa John’s surging 5 percent to 83 and Little Caesars up 2 percent to 82. SUBWAY enters the ACSI with a strong score of 82. The other newcomer, Dunkin’ Donuts, scores 79. While this is somewhat lower than the leaders, it puts Dunkin’ Donuts well ahead of coffee rival Starbucks, whose customer satisfaction tumbled 5 percent to 76. Pizza Hut also declined this year, down 4 percent to 78, but its score still matches or beats the burger chains.

Wendy’s is the top burger vendor at 78 (+1%), while Domino’s is the bottom pizza maker at 77 (unchanged for a fourth year). Taco Bell scores 77 (+1%), while BURGER KING and KFC are flat this year at 75. McDonald’s rounds out the category at 73 (+1%). For McDonald’s, customer satisfaction is at an all-time high and far better than it was more than a decade ago, when the company had nearly the worst score in the index (59 in 2000).

Applebee’s premieres in the sit-down category with an ACSI score of 77, trailing the field with the exception of Chili’s, down 4 percent to 76. One year ago, the industry was tightly grouped within a narrow three-point range; this year, the gap from top to bottom more than doubled. Red Lobster emerged as the leader at 83 (+1%), while another from the Darden family of restaurant brands, Olive Garden, retreated 2 percent to 80. Outback Steakhouse is unchanged at 81 and ties the aggregate of all other full-service brands (–1%).

Consumer shipping and mail: Higher costs dampen customer satisfaction

Customer satisfaction with consumer shipping services (which includes sending and receiving packages) declined 2.4 percent to an ACSI score of 82. Historically, consumer shipping has been the top performer among service-oriented industries. With rising fuel costs bringing higher prices to consumers, the industry has taken an ACSI hit this year.

Both FedEx and UPS face deteriorating customer satisfaction, as FedEx slips 1 percent to 82, and UPS drops sharply to 81. With a 5-percent downturn, UPS has quickly lost its short-lived advantage from 2011, when it led the industry for the first time in more than a decade.

The U.S. Postal Service improved for a fourth straight year, up 3 percent to 81 for its Express and Priority Mail services. For USPS monopoly mail services, customer satisfaction rose 1 percent to 75. Both USPS scores represent all-time ACSI highs. As the customer base for USPS services shrinks, it is likely that only the most loyal—and most satisfied—users remain. In addition, the Post Office is partnering with private-sector carriers for the long-haul portions of its express shipping, which may be helping its customer relationships.


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American Customer Satisfaction Index ACSI

The American Customer Satisfaction Index (ACSI), founded at the University of Michigan’s Ross School of Business and produced by ACSI LLC, is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The national index is updated each quarter and scores on a zero-to-100 scale at the national level. The ACSI produces indexes for 10 economic sectors, 47 industries, more than 225 companies, and more than 200 federal or local government services.