The 2012 American Customer Satisfaction Index (ACSI) is out and it demonstrates the kind of consistency that a fast food behemoth like McDonald's can't be too happy about.
The ACSI's new ranking puts the burger-meister dead last in the "Limited-Service Restaurants" category, with a satisfaction rating of 73 percent. That puts McDonald's just below rival Burger King (75 percent), but considerably below Wendy's (78 percent). Pizza delivery company Papa John's was rated #1 in the limited service category with a satisfaction rating of 83 percent, an increase of 5.1 percent from the previous year. Interestingly, the company in this category with the largest drop in customer satisfaction from last year was Starbucks. Often touted for its customer service, the coffee house fell from 80 percent in 2011 to 76 percent in 2012.
Unfortunately, the lowly ranking should come as no big surprise for McDonald's management; the company has ranked last in the ACSI since 1995. In fact, its current rating of 73 percent is a percent higher than last year, and 73 percent is the highest rating ever achieved by McDonald's on the ACSI.
The ACSI is a national economic indicator of customer evaluations of the quality of products and services available to household consumers in the United States. The Index uses data from interviews with roughly 70,000 customers annually as inputs to an econometric model for measuring customer satisfaction with more than 225 companies in 47 industries and 10 economic sectors, as well as over 100 services, programs, and websites of federal government agencies.
So how does McDonald's spin the consistently inferior results? Jim McCabe, McDonald's VP of Operations, commented to London's Daily Mail, "Our internal and third-party research shows that we continue to make progress in satisfying our customers." But McCabe admitted that McDonald's "can do more to satisfy" customer demands.
Of course, any organization that serves some 68 million customers each day at more than 33,000 locations around the world could have some issues with satisfying customers now and then, couldn't it? That's why the company continues to advertise aggressively, pumping up both its brand and new products. The ads seem to be working; in fact, McDonald's was just named the most effective brand, globally, for the second year in a row by the Effie Awards.
Perhaps McDonald's customers feel they're not getting the same fare promised in the chain's advertising — and they're not. Blame food stylists for menu items that look better in ads than they do in person. As part of a brand transparency campaign — answering customer questions by video on the McDonald's Canada YouTube channel — McDonald's Canadian director of marketing Hope Bagozzi responded to a customer question about why food in ads look different by taking consumers behind the scenes of a ad shoot and demonstrating the magic of making a burger look more tantalizing than in real life.
Food styling to highlight product attributes, by the way, is something most every restaurant and food brand does for its photo and video shoots. Another question, answered by McDonald's Canada president and CEO John Betts, also addressed pricing.
An even bigger issue for McDonald's, though, goes beyond customer satisfaction and advertising. It's the fact that competitors may be starting to seriously eat into McD's sales. McDonald's is getting battered by worldwide economic conditions and losing market share, which has caused analysts and investors to get indigestion.
As for other restaurant brands in the ACSI's 2012 ranking, three restaurants made their debut: 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 brings a loss of 2.4%, while fast food keeps climbing—up 1.3% 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,” stated ACSI founder Claes 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.”
As the Papa John's win shows, according to ACSI's press release on the 2012 results,
Pizza makers continue to stake out the high end of the fast food industry, with Papa John’s surging 5% to 83 and Little Caesar up 2% 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 tumbles 5% to 76. Pizza Hut also declines this year, down 4% 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 over 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% to 76. One year ago, the industry was tightly grouped within a narrow 3-point range; this year, the gap from top to bottom more than doubles. Red Lobster emerges as the leader at 83 (+1%), while another Darden brand, Olive Garden, retreats 2% to 80. Outback Steakhouse is unchanged at 81 and ties the aggregate of all other full-service brands (-1%).