American Customer Satisfaction Index (ACSI) Score & Calculation

Verint Team September 16, 2013

Uncovering consumer behaviors—and the decisions and preferences that drive those behaviors—is vital for organizational success. But how do brands, companies, and governments gain insight into consumer preferences and happiness?

The American Consumer Satisfaction Index (ACSI) is a robust and powerful tool for organizations nationwide to better understand customer satisfaction. Major organizations like Apple, Amazon, Microsoft, and even the United States Government look at the ACSI to establish connections between their brand and customer happiness.

 

What Is ACSI?

The ACSI is the most well-known national customer satisfaction index model, a type of economic indicator that assesses the overall satisfaction of consumers in a country. The National Quality Research Center (NQRC) at the University of Michigan compiles the ACSI.

While intended as a macroeconomic measure of U.S. consumers, several corporations use it to measure customer satisfaction.

 

Methodology

The ACSI uses data from interviews with hundreds of thousands of customers annually to help analyze customer satisfaction for more than 400 companies across 44 industries and 10 economic sectors.

What does this look like in practice?

Companies conduct surveys and sample a statistically representative group of customers. These customers have recently interacted with the company or used its products or services. These surveys cover perceived quality, customer expectations, and perceived value.

The heart of the ACSI is a set of three questions:

  1. What is your overall satisfaction with our [product or service]?
  2. To what extent has [our product or service] met your expectations?
  3. How well did [our product or service] compare with the ideal [type of offering?]

Surveyed customers can rank the business on a scale of 1 to 10, where 1 represents the most negative response and 10 is the highest.

 

ACSI Questions

ACSI Scores and Formula

ACSI scoring is a “cause-and-effect model” with three main sections:

  1. The left side of the model looks at three things that impact customer satisfaction:
    1. What the customer expects
    2. How the customer rates the quality
    3. How much value the customer feels they are getting
  1. The center of the model shows the actual satisfaction score (the ACSI score).
  2. The right side of the model shows satisfaction outcomes:
    1. How often customers complain
    2. How loyal customers are (if they keep buying from the company and are willing to pay the company’s prices)

The ACSI model uses a proprietary weighted average formula. Scores range from 0 to 100, with 100 representing the highest level of satisfaction.

Some organizations normalize and average the three ratings with the following equation:

(Satisfaction + Expectancy + Performance – 3)/27 x 100

This equation produces an overall score from 0 to 100 that organizations can use as an approximate benchmark for industry results published by the ACSI.

Interpretation of ACSI scores

Interpreting ACSI scores involves understanding their implications for both businesses and consumers. Companies with high ACSI scores might consider their customer satisfaction levels high. This increased satisfaction can translate into customer loyalty or repeat business. Those with low scores, however, might consider areas for improvement in meeting customer expectations.

For those customers who want to do the research, ACSI scores can guide them when choosing between one or more companies or products. Higher scores might suggest companies consistently meet or exceed customer expectations. Lower ones may indicate product quality, customer service, or value issues.

 

The Impact of ASCI Scores

ASCI is often a good bellwether for understanding how your organization is performing.

ASCI scores provide companies with valuable insights into their operations and the quality of their goods or services. High scores typically indicate that a company is doing well with customer expectations. That can often lead to increased market share or competitive advantages. On the other hand, a low score might signal potential problems that your company should quickly address.

For brands that rely heavily on a customer contact center to handle most customer service issues, a low ACSI score might be a yellow flag for issues in that department.

Tip: Bring your customer contact center into the digital age to help boost your ASCI score. Explore Open CCaaS.

How ACSI Scores Can Impact Business Performance

ACSI scores directly impact customer loyalty, even though customers may not immediately think of it that way. Satisfied customers are more likely to remain loyal to a brand, make repeat purchases, and recommend a brand to others. This results in stable customer bases and predictable revenue streams.

Speaking of revenue, businesses with high ACSI scores tend to be more profitable. Satisfied customers buy more, which leads to increased sales and profits. High customer satisfaction is a way to drive cost efficiencies because it can cost as much as five times more to convert new customers than to retain existing ones.

Influencing Consumer Decisions and Investor Confidence with ACSI Scores

Do customers look directly at the ACSI when making buying decisions? Possibly. For those in tune with the data, a high score on the ACSI might be a compelling selling point indicating high-quality goods or services. On the contrary, low scores might deter potential customers.

 

Industry Applications

ACSI is versatile, and companies can see huge benefits when they apply it correctly. Whether in retail, healthcare, or the tech sector, ACSI provides valuable insights.

Retail

ACSI scores give retailers massive insights into customer service quality, prices, products, and overall shopping experience. Costco, a perennial high scorer on the ACSI, monitors their results to ensure they maintain high standards and address any immediate concerns. Other strong performers in this sector include stores like Nordstrom and BJ’s Wholesale Club.

Online retailers across the board are seeing a rebound in their ACSI scores after a drop due to heavy online shopping led to missed expectations in 2020. Brands like Chewy, Amazon, and Gap are on their way back up.

Healthcare

Healthcare providers pay close attention to their ACSI rankings, too. Patient satisfaction impacts a hospital or clinic’s reputation and overall success. High ACSI scores indicate quality care, effective communication, and efficient services. Nonhospital care facilities have seen a substantial gain in the past year, increasing satisfaction by 11%.

Technology

ACSI scores in the tech sector span a broad number of categories, from personal computers, where brands like Apple lead the way, all the way to wireless phone providers like AT&T. Each of these brands consistently scores higher than others because of their commitment to providing what their consumers want and a compelling in-store experience.

 

ACSI for Consumers

Consumers can use ACSI scores to make purchasing decisions, even if they don’t have access to the complete formula for calculating those numbers. Here’s how to do that:

  • Research companies and products. Before buying, consumers can look up a company or product’s ACSI score. High scores indicate a higher level of customer satisfaction.
  • Compare scores. Consumers can compare scores among different companies within an industry. This comparison shows which companies lead customer satisfaction and may offer better products or services.
  • Monitor changes over time. ACSI scores update yearly, enabling consumers to track a company’s performance over time. Significant changes in scores can indicate improvements or declines in customer satisfaction.

Advantages of Using ACSI Rankings as a Consumer

Why should consumers look at ACSI rankings as they shop? It’s an excellent way to perform an essential quality assurance check.

High ACSI scores can indicate high-quality products or services. Choosing companies with high scores increases the chances of getting a product or service that meets your expectations.

It’s also an excellent way to gauge future performance. Companies with high scores usually commit to maintaining their customers’ satisfaction through continued quality and innovation.

Finally, Low ACSI scores can be warning signs for issues like poor customer service or low-quality products. Considering these scores can help consumers potentially avoid disappointing purchases.

ACSI scores are a valuable tool that consumers shouldn’t neglect when making purchases.

 

ACSI Scores in Research and Academia

ACSI results aren’t just crucial for businesses. They’re an excellent resource for academic research. Its comprehensive, cross-industry measure of customer satisfaction makes it a rich data source for various academic purposes.

Academic Research and Case Studies

Academic researchers use ACSI data to study the relationship between customer satisfaction and other business or economic variables. For instance, researchers might use ACSI scores to investigate links between customer satisfaction and business profitability, market share, or stock performance.

Here’s a real-world example of ACSI data informing academic research: researchers in this study from 2020 collected customer satisfaction data from the ACSI to uncover how a company’s social responsibility, social irresponsibility, and customer satisfaction interact to impact financial performance.

ACSI data is often an integral part of case studies. Case studies provide an in-depth analysis of how a specific company or industry performs regarding customer satisfaction. They also explore how changes in ACSI scores over time can correspond to market conditions or business strategy changes.

Academic Significance in Understanding Customer Satisfaction Trends

By tracking scores across different industries over time, researchers can identify patterns in customer satisfaction. It offers insights into changes in consumer expectations, the effectiveness of business strategies, and the impact of external factors like technological advancements or economic conditions.

Because ACSI involves interviewing thousands of customers, it provides a robust and reliable measure of customer satisfaction. That makes it a valuable resource for academic research into business performance.

 

ACSI for Policymakers and Investors

Government officials often use ACSI to assess public sector organizations’ performance. By comparing these scores with private sector companies, they can identify areas where services need improvement.

For example, the United States Postal Service (USPS) routinely gauges its performance against private competitors like UPS and FedEx and the consumer shipping industry at large.

Additionally, governments can use ACSI data to evaluate the impacts of regulatory policies on customer satisfaction. Changes in ACSI scores in telecommunications might indicate the effectiveness of regulations to promote competition or protect consumer rights.

Investors who leverage ACSI data can make more informed decisions. Stocks of companies with high ACSI scores usually perform better than those with low ones.

 

Conclusion

The ACSI is an essential tool for decision-makers at nearly every level, from governments and CEOs to those making purchasing choices around the kitchen table. It’s a great resource to gain insights into how consumers in the United States spend their money. It’s also a fantastic tool to learn about companies investors might want to pursue.

Brands who want the precise ACSI results for their companies must commission a custom research program with the organization. This purchase includes precise question wording and survey methodology to gather benchmark data. If the high price tag of an ACSI survey is out of reach, it is possible to “DIY” customer satisfaction by using the above question phrasing.

 

ACSI FAQs

 

What is the American Customer Satisfaction Index (ACSI)?

The ACSI is an economic indicator that measures the satisfaction of consumers across the U.S. economy, providing insight into customer expectations, quality, value, and satisfaction, among other factors.

How is the American Customer Satisfaction Index (ACSI) calculated?

The calculation of the ACSI score involves analysis of customer evaluations of the quality of goods and services they have purchased and consumed, including various companies in over 40 industries and 10 economic sectors.

What is a good customer satisfaction index score?

A “good” American Customer Satisfaction Index (ACSI) score varies depending on the industry. Generally, a higher score indicates greater customer satisfaction. The top-performing brands typically outpace their industries and have scores in the 80s.