ANN ARBOR, Mich.--(BUSINESS WIRE)--#ACSI<\/a>--In the first quarter of 2026, the American Customer Satisfaction Index (ACSI\u00ae<\/sup>)<\/a> fell 0.3% to a score of 76.7 (100-point scale) on an annual basis.<\/p> \nAfter an upward drift during the first 13 years of this century, customer satisfaction became more volatile, but without directionality, during the next 13 years (through Q1 2026). The current national ACSI score is the same as it was in 2013. Around that time, the economy settled into a lower growth phase \u2014 decoupling changes in quality<\/span> of economic output (ACSI) from quantity<\/span> of economic output (GDP). Markets gradually became more concentrated, with sellers gaining market power. Equity markets became exceptionally concentrated, with negative repercussions for stock returns in consumer sectors relative to business-to-business, especially in technology. Measures of Customer Experience (Forrester) and Consumer Sentiment (University of Michigan) reached their lowest levels ever.<\/p> \nEstimates about how much has been invested to improve customer satisfaction\/customer experience over the years vary, but it appears to be well over $100 billion annually with no detectable returns. If anything, the returns have been negative. Customer complaints have now reached record levels, surging by 16% in the first quarter. Paradoxically and contrary to what occurs in efficient markets, customer retention has increased<\/span>. Accordingly, corporate profits soared. First quarter earnings were up by 15% \u2014 even more than the revenue increase. Most of the profit margin growth was in business-to-business, but many consumer-facing sectors also did well.<\/p> \n\u201cWhen customers come back for more \u2014 even if they are less than satisfied \u2014 pent-up defection, the inverse of pent-up demand, intensifies,\u201d said Claes Fornell, founder of the ACSI and the Distinguished Donald C. Cook Professor (Emeritus) of Business Administration at the University of Michigan. \u201cWhen realized, the cost is the future revenue and profit lost, plus the additional expenditure for replacing departed customers. It is the flipside of the value escalation from customer retention growth \u2014 where loyal customers generate multiplicative, and at high levels of retention, exponential revenue growth. Profit improves even more than revenue because the marginal cost of keeping a customer is usually lower than the corresponding customer acquisition cost.\u201d<\/p> \nAccordingly, the financial penalty for losing customers is extraordinarily high: Spirit Airlines, Sears, and JCPenney can testify to that. Reduced upsell opportunity, which also tends to encourage competitive inroads, is another causality associated with pent-up customer defection.<\/p> \nA customer\u2019s ability to defect can be thwarted by various degrees of seller monopoly power and high customer switching costs. For companies in competitive markets, the probability of defection is minimized by making sure that customers are satisfied. Customer satisfaction- produced retention turns the dogma of \u201chigh risk\/high return\u201d into \u201clow risk\/high return.\u201d<\/p> \nTo get there, however, the currently used methods for strengthening customer relationships will not do: Analytics cannot be incompatible with the properties of customer data (extreme multicollinearity, non-normal frequency distributions, and high measurement error). The performance metrics must be profit relevant (unlike many now) and they should not produce more noise than signal \u2014 which is often the case today. They should be calibrated to maximize customer retention and deliver casual information on how to best allocate resources for it.<\/p> \nIt is in customer retention where the financial return lies, and it is sizeable. Both economic growth and consumer utility would be beneficiaries, as would long-term profitability.<\/p> \nClaes Fornell, the Donald C. Cook Distinguished Professor of Business (Emeritus) at the University of Michigan, is the primary author of this press release. According to Google Scholar, Professor Fornell is the most cited person in the world on customer satisfaction and one of the most cited econometricians\/statisticians with respect to structural equation models with unobservable variables and measurement error. He holds honorary doctorates from several universities.<\/p> \nFor more, follow the American Customer Satisfaction Index on LinkedIn<\/a> and X at @theACSI<\/a> or visit www.theacsi.org<\/a>.<\/p> \nNo advertising or other promotional use can be made of the data and information in this release without the express prior written consent of ACSI LLC.<\/i><\/p> \nAbout the ACSI<\/b><\/p> \nThe American Customer Satisfaction Index<\/a> (ACSI\u00ae<\/sup>) is a national economic indicator and a leading provider of customer analytics products that help organizations build lasting customer relationships and prove ROI on experience investments. ACSI's AI-enhanced platform delivers intuitive dashboards and cause-and-effect analytics that pinpoint the quality drivers most predictive of customer allegiance, retention, price tolerance, and financial performance. ACSI data has been shown to correlate strongly with key micro and macroeconomic indicators, including consumer spending, GDP growth, earnings, and stock returns.<\/p> \nFounded in 1994 at the University of Michigan's Ross School of Business, the ACSI measures customer satisfaction with more than 400 companies in over 40 industries, including federal government services, based on approximately 200,000 annual interviews. Learn more at https:\/\/www.theacsi.org<\/a>.<\/p> \nACSI and its logo are Registered Marks of American Customer Satisfaction Index LLC.<\/p>![](\"https:\/\/mms.businesswire.com\/media\/20260512244114\/en\/2801353\/22\/Q1_2026_Macro_Graph_FINAL.jpg\")
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