Tuesday, February 23, 2010

ACSI Scores Ecommerce Websites - eBay Rates Low


For a long time now, sellers have been saying that they would love to rate eBay on customer satisfaction. Well, ACSI (American Customer Satisfaction Index) does just that. Of course, their scores do not come just from sellers but the ratings are listed for eBay.

An ASCI rating of 80 or above is considered good. eBay has not had a good rating since 2007.

Here is what the ACSI website states about what their customer surveys measure:

Customer Expectations

Customer expectations is a measure of the customer's anticipation of the quality of a company's products or services. Expectations represent both prior consumption experience, which includes some nonexperiential information like advertising and word-of-mouth, and a forecast of the company's ability to deliver quality in the future.

Perceived Quality

Perceived quality is a measure of the customer's evaluation via recent consumption experience of the quality of a company's products or services. Quality is measured in terms of both customization, which is the degree to which a product or service meets the customer's individual needs, and reliability, which is the frequency with which things go wrong with the product or service.

Perceived Value

Perceived value is a measure of quality relative to price paid. Although price (value for money) is often very important to the customer's first purchase, it usually has a somewhat smaller impact on satisfaction for repeat purchases.

Customer Complaints

Customer complaints are measured as a percentage of respondents who indicate they have complained to a company directly about a product or service within a specified time frame. Satisfaction has a negative relationship with customer complaints, as the more satisfied the customers, the less likely they are to complain.

Customer Loyalty

Customer loyalty is a combination of the customer's professed likelihood to repurchase from the same supplier in the future, and the likelihood to purchase a company’s products or services at various price points (price tolerance). Customer loyalty is the critical component of the model as it stands as a proxy for profitability.

2009 Q4 Results - Note: eBay is at the bottom with a score less than 80. Remember, 80 is considered good and anything below that is not satisfactory.

Click the graphic to enlarge it.


Here is what the ACSI website states about the information that they gather:

What can ACSI tell us?

Some ACSI findings from more than 12 years of data include:
Customer satisfaction is a leading indicator of company financial performance. Stocks of companies with high ACSI scores tend to do better than those of companies with low scores.

Changes in customer satisfaction affect the general willingness of households to buy. As such, price-adjusted ACSI is a leading indicator of consumer spending growth and has accounted for more of the variation in future spending growth than any other single factor.

Because consumer spending accounts for 70% of GDP, changes in customer satisfaction as measured by ACSI also correlate with changes in GDP growth. As GDP is a measure of the quantity of economic output and ACSI a measure of its quality, economic growth is dependent on producing not only more but also better products and services.

Manufactured goods tend to score higher on ACSI than services. For example, canned food and household appliances score much better than banks, airlines, and cable TV. Typically, the more service required, the lower the satisfaction.

Quality plays a more important role in satisfying customers than price in almost all ACSI-measured industries. Price promotions can be an effective short-term approach to improving satisfaction, but price cutting is almost never sustainable in the long-term. Companies that focus on quality improvements tend to fare better over time in ACSI than companies that focus on price.

Mergers and acquisitions have a generally negative effect on customer satisfaction, particularly among service industries. ACSI-measured service companies that have engaged in frequent, large acquisitions typically experience significantly lower ACSI scores in the period following a merger when the customer as asset often takes a backseat to reorganization and consolidation via cost-cutting.

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