As tension between Americans and their government grows to unprecedented levels, a soon-to-be-released book by ACSI Research Director Dr. Forrest Morgeson provides a timely investigation into the topic of satisfaction with government services and its practical application toward improving citizen trust. In Citizen Satisfaction: Improving Government Performance, Efficiency, and Citizen Trust, Morgeson covers growing interest in performance measurement among governments, citizen satisfaction theory and the practice of measurement, and how satisfaction data can be used to drive improvements inside government agencies that will lead to more contentment with the government. Using case studies and empirical results from satisfaction studies at the federal level of government in the United States, Citizen Satisfaction is a comprehensive look at the all-important relationship between citizens and their government.
Earlier this month, ACSI released its 2011 report on the Automobiles and Light Vehicles industry. The August ACSI Commentary focused on the difficult situation faced by U.S. automakers as they experience declining customer satisfaction, while the Japanese automakers gain in satisfaction and the Europeans maintain their lead. Here we offer a few additional research insights gleaned from the ACSI study, focusing on the effects of automobile recalls. The ACSI customer satisfaction survey asks all respondents to the auto study to indicate whether their car has been the subject of a recall since the time of purchase, providing the data that allows us to investigate the impact of recalls on satisfaction.
Over the last few years, a series of high-profile auto recalls (most notably, the massive, worldwide Toyota recall that began in 2009) have garnered significant media attention. What impact, if any, does the experience of a recall have on customer satisfaction? While it may seem obvious that a recall signals a significant quality defect and therefore depresses satisfaction, it is also possible that consumers have come to accept recalls (a fairly common event) as a normal part of car ownership.
Using a pooled sample of 2010 and 2011 data for all of the nameplates measured within the industry, ACSI data suggests that customers who have experienced a recall are significantly less satisfied with their car than those who have not. As shown in the first chart below, car owners who experienced a recall have an ACSI score of 79, compared to a significantly higher score of 84 for those who have not.
But the negative impact of a recall for an automaker does not end with lower satisfaction. Because there is a nearly 1-to-1 relationship between satisfaction and customer loyalty for this industry, these findings also show that recalls create customers who are significantly more likely to defect to a competitor the next time they purchase a car. Again using a pooled sample of 2010 and 2011 data for all nameplates measured by ACSI, the data shows that customers who have experienced a recall indicate they are 4 percentage points less likely to remain customers of the same automaker when they next purchase an automobile, as shown in the second chart above.
There are two vital conclusions that should be drawn from these findings. First, auto recalls, no matter how common, well-publicized, or necessary for public safety, have a negative impact on customer satisfaction for an automaker. As satisfaction drives behaviors like word-of-mouth, cross-selling, up-selling, brand image, corporate reputation, and so forth, the drop in satisfaction caused by a recall has a number of negative indirect consequences for carmakers. Perhaps more significantly, however, is the impact of a recall on customer loyalty. Customers who have experienced a recall indicate that they are significantly less likely to be retained as customers in the future. As current customers are generally “cheaper” customers for any firm (requiring fewer acquisition costs), the impact of a recall on loyalty represents a tangible and negative economic consequence for an automaker.
While ACSI research focuses first and foremost on consumer satisfaction results and the implications of these results for companies and government agencies, there is a great deal of additional knowledge that can be gained from the rich and expansive ACSI database. This past Friday, May 13th, some of this knowledge was shared with an audience at the 66th Annual American Association for Public Opinion Research Conference. In a presentation delivered by Dr. Forrest Morgeson, the consequences of multi-mode, multi-method satisfaction data collection (i.e. conducting interviewing over both the telephone and the Internet) were discussed. The results indicate that in regards to consumer satisfaction research, collecting data over both the telephone and the Internet does not dramatically impact or alter the sample or the conclusions, when compared to data collected only over the telephone. Thus contrary to the findings of some other research (mostly focused on interviewing regarding political opinions), multi-method interviewing appears to be a promising tool for satisfaction researchers, if done carefully and correctly.
You can download a copy of the presentation here: ACSI AAPOR Presentation.
The new study, titled “An Investigation of the Cross-National Determinants of Customer Satisfaction” and forthcoming in Journal of the Academy of Marketing Science, examines a very large sample of customer satisfaction data across 19 nations to determine which factors are most responsible for differences in satisfaction scores across countries. The findings, detailed in the article, should prove useful to market researchers, academic researchers, and those generally interested in how competitiveness impacts economic success in the global economy.
Study abstract: “Many multinational corporations have implemented cross-national satisfaction measurement programs for tracking and benchmarking the satisfaction of their customers across their various markets. These companies measure satisfaction with the goal of maximizing customer loyalty and the financial benefits associated with loyalty. However, existing research comparing consumer satisfaction across nations is limited, with the few existing studies examining only a small number of countries or predictors of satisfaction, or a small group of consumers within a particular economic sector. To expand our knowledge of the determinants of cross-national variation in customer satisfaction, we study three sets of factors: cultural, socioeconomic and political-economic. We utilize a unique sample of cross-industry satisfaction data from 19 nations, including nearly 257,000 interviews of consumers. Consistent with our hypotheses, we find that culture does impact satisfaction. We also find a negative relationship between per capita gross domestic product and satisfaction, but a positive relationship between satisfaction and literacy rate, trade freedom, and business freedom. We discuss the implications of these findings for policymakers, multinational corporations, and researchers.”
See the “Online First” version of the article here (via SpringerLink): An Investigation of the Cross-National Determinants of Customer Satisfaction
Study abstract: “A growing body of research focuses on the relationship between e-government, the relatively new mode of citizen-to-government contact founded in information and communications technologies, and citizen trust in government. For many, including both academics and policy makers, e-government is seen as a potentially transformational medium, a mode of contact that could dramatically improve citizen perceptions of government service delivery and possibly reverse the long-running decline in citizen trust in government. To date, however, the literature has left significant gaps in our understanding of the e-government-citizen trust relationship. This study intends to fill some of these gaps. Using a cross-sectional sample of 787 end users of US federal government services, data from the American Customer Satisfaction Index study, and structural equation modeling statistical techniques, this study explores the structure of the e-government-citizen trust relationship. Included in the model are factors influencing the decision to adopt e-government, as well as prior expectations, overall satisfaction, and outcomes including both confidence in the particular agency experienced and trust in the federal government overall. The findings suggest that although e-government may help improve citizens’ confidence in the future performance of the agency experienced, it does not yet lead to greater satisfaction with an agency interaction nor does it correlate with greater generalized trust in the federal government overall. Explanations for these findings, including an assessment of the potential of e-government to help rebuild trust in government in the future, are offered.”
See the full article here: Misplaced Trust? Exploring the Structure of the E-Government-Citizen Trust Relationship