ACSI M ODEL

The American Customer Satisfaction Index (ACSI) model was established in 1994 following several years of development and pre-testing and illustrated in Figure 3-2. It follows the general modeling and survey methodology of the SCSB adapted to produce four levels of indices or scores:

a national customer satisfaction score, ten economic sector scores, 41 specific industry scores, and scores from 200 companies and agencies with revenues totaling nearly 40% of the GDP [1, 22].

CUSTOMER EXPECTATIONS

CUSTOMER SATISFACTION

(ACSI) PERCEIVED

VALUE

PERCEIVED QUALITY

CUSTOMER LOYALTY CUSTOMER COMPLAINTS Overall

Customization

Reliability

Reliability Overall Customization

Price Given Quality Quality Given

Price

Confirm/Disconf irm Expectations

Comparison with Ideal

Complaint Behavior

Satisfaction

Price Tolerance Repurchase

Likelihood

Figure 3-2 ACSI model: Private Sector Source: [34]

In ACSI model, customer expectation, perception of quality, and perceived value were introduced as the antecedents of customer satisfaction, and customer loyalty and customer complaint as consequences. [1, 34]

Customer Expectations: Expectations combine customers’ experiences with a product or service and information about it via media, advertising, salespersons, and word-of-mouth from other customers. Customer expectations influence the evaluation of quality and forecast (from customers’ pre-purchase perspective) how well the product or service will perform.

Perceived Quality: Perceived quality is measured through three questions: overall quality, reliability, and the extent to which a product or service meets the customer’s needs. Across all companies and industries measured in the ACSI, perceived quality proves to have the greatest impact on customer satisfaction.

Perceived Value: Perceived value is measured through two questions:

overall price given quality and overall quality given price. In the ACSI model, perceived value influences ACSI directly, and is affected by expectations and perceived quality. Although perceived value is of great importance for the (first) purchase decision, it usually has somewhat less impact on satisfaction and repeat purchase.

Customer Complaints: Customer complaint activity is measured as the percentage of respondents who reported a problem with the measured companies’ product or service within a specified time frame. Satisfaction has an inverse relationship to customer complaints.

Customer Loyalty: Customer loyalty is measured through questions on the likelihood to purchase a company’s products or services at various price points. Customer satisfaction has a positive effect on loyalty, but the magnitude of that effect varies greatly across companies and industries.

The main difference between SCSB model and ACSI model is the addition of a perceived quality component. Fornell et al. [20] argue that the inclusion of both perceived quality and perceived value into the ACSI model

relative to quality, price is a more important determinant of satisfaction. As quality is a component of value, the model also links quality directly to value [24]. For perceived quality, the ACSI model expects a positive association between perceived value increases and customer satisfaction.

In some industries, particularly in the manufacturing/durable goods and retail trade sectors, the product and service require to maintain after it was provided over different time periods. For those industries, ACSI uses the expanded model shown in Figure 3-3 [34].

CUSTOMER EXPECTATIONS

CUSTOMER SATISFACTION

(ACSI) PERCEIVED

VALUE

PERCEIVED QUALITY

CUSTOMER LOYALTY CUSTOMER COMPLAINTS Overall

Customization

Reliability

Price Given Quality Quality Given

Price

Confirm/Disconf irm Expectations

Comparison with Ideal

Complaint Behavior

Satisfaction

Price Tolerance Repurchase

Likelihood PERCEIVED

SERVICE QUALITY PERCEIVED

PRODUCT QUALITY

Reliability Customization

Overall Reliability Customization

Overall

Figure 3-3 Expanded ACSI model: Private Sector Source: [34]

For government services and nonprofit organizations, perceived value in terms of price/quality relationship is not a driver as there is usually no direct charge (or very nominal charge) for tax-supported organizations, thus the ACSI model is modified as Figure 3-4.

CUSTOMER EXPECTATIONS

CUSTOMER SATISFACTION

(ACSI)

PERCEIVED

QUALITY USER TRUST

CUSTOMER COMPLAINTS

Confirm/Disconf irm Expectations

Comparison to Ideal

Complaint Behavior

Satisfaction

Confidence Advocacy

Overall Customization

Reliability

Reliability

Customization Overall ACTIVITY 1

ACTIVITY 2 Q1

Q3 Q2

Q4

Figure 3-4 ACSI model: Government Services and Non-profit Organizations Source: [34]

The American Customer Satisfaction Index is designed to be representative of the nation’s economy as a whole. At the beginning, the methodology of selecting the companies is each of the major economic sectors (one-digit standard industrial classification [SIC] code level) with reachable end-users. Within each sector, the major industrial groups (two-digit SIC codes) were included on the basis of relative contribution to the gross domestic product. Within each industry group, several representative industries (four-digit SIC codes) were included on the basis of the total sales. Finally, within each industry the largest companies were selected, such that coverage included the majority of each selected industry’s sales.

The Standard Industrial Classification (SIC) was originally developed in the 1930's to classify establishments by the type of activity in which they are primarily engaged and to promote the comparability of establishment data

project of Mexico, Canada, and the United States, NAICS was developed in response to the rapidly changing industrial composition and organization of both US and world economies and to provide common industry definitions for the three North American countries. It replaced the SIC (Standard Industrial Classification) system, in existence since the late 1930s.

Follow the methodology described in the previous page, now ACSI measures ten economic sectors in the North American Industry Classification System (NAICS) that produce products and services sold directly to household customers [1, 34, 41]. Please refer to the table 1 in appendix.

These sectors are: (1) Utilities, (2) Manufacturing/Nondurable Goods, (3) Manufacturing/Durable Goods, (4) Retail Trade, (5) Transportation and Warehousing, (6) Information, (7) Finance and Insurance, (8) Health Care and Social Assistance, (9) Accommodation and Food Services, and (10) Public Administration as figure 3-5. The sectors included in ACSI produce 65.7% of the GDP [34].

Figure 3-5 ACSI: National Economy, Sectors, and Industries Source: [34]

Utilities

Manufacturing/

Nondurable Goods 9.4%

Manufacturing/

Durable Goods 11.1%

Retail Trade 5.8%

Transportation &

Warehousing 3.0%

Information 5.3%

Finance &

Insurance 7.3%

Health Care &

Social Assistance 6.9%

Accommodation &

Food Services 3.7%

Public Administration

11.4%

E-Business/

E-Commerce

-Energy -Food manufacturing -Pet food -Soft drinks -Breweries Cigarettes -Cigarettes -Apparel -Athletic shoes -Personal care &

cleaning products

-Personal Computers -Cellular telephones -Electronics (TV/VCR/DVD) -Major Appliances -Automobiles

-Supermarkets -Gasoline Stations -Department & discount stores

-Specialty -Airlines -U.S. Postal service -Express delivery

-Newspapers -Motion pictures -Broadcasting TV news -Fixed line

telephone service -Wireless telephone service - Cable &

satellite TV

-Banks -Life insurance -Health insurance -Property &

casualty

-Hospitals

-Hotels -Limited-service restaurants

-Solid waste disposal -Police -Federal agencies

-News &

information -Portals -Search engines -Retail -Auctions -Brokerage -Travel