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People Are 'Dissatisfied' with Facebook, But Won't Stop Using It

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July 22, 2010

People Are 'Dissatisfied' with Facebook, But Won't Stop Using It

By Gary Kim, Contributing Editor

A new study by American Customer Satisfaction Index, conducted by ForeSee Results suggests that users "dislike" Facebook. In fact, ACSI says Facebook ranks Facebook and MySpace (News - Alert) in the bottom five percent of all companies measured. 

However, according to July 2010 Hitwise data, Facebook is the number one website in the country, with nine percent of all website visits (Google (News - Alert) has 7.4 percent and Yahoo! 3.8 percent) and 55 percent of all social media visits.

One might rhetorically ask, "how can Facebook can be so popular if people dislike it so much?" ForeSee suggests that "Facebook (News - Alert) has its own version of a monopoly."

Although there are literally hundreds of social networking sites available around the world, Facebook has surged from 200 million global users 15 months ago to more than 500 million today, according to the New York Times. There really is no other choice for people wanting to connect with friends, family, and colleagues.

Customers are willing to suffer through a poor experience in return for the benefits Facebook provides, Foresee says. 

"This is a rare scenario in the American economy: usually customer satisfaction is intertwined with market success," says Larry Freed, ForeSee Results CEO. But Freed notes that there are some exceptions to this rule. Cable companies and airlines, though, are such exceptions. Consumers routinely report they are dissatisfied, but that does not necessarily translate into abandonment of the product, though it sometimes leads to alternate provider choices. 

Freed suggests Facebook loyalty might be explained by Facebook's role as a content repository; it acts as a storehouse for many people’s pictures and videos. So while the dollar cost of switching may not be high, the convenience cost would be.

One might also suggest something similar at work with user attitudes toward the experience of using an iPhone, and the low churn behavior, despite well-publicized shortcomings. Apple iPhones routinely are said to drop calls, for example, AT&T (News - Alert) statistics notwithstanding. 

Despite that irritant, few iPhone users actually stop using their iPhones. Those examples all suggest that although customer satisfaction is generally associated with better financial and churn performance, the rule is not absolute. 

There are products will relatively longstanding and stable user experience issues (at least as consumers state the issue), that nevertheless have high attachment rates (most people use the product) and low product churn (few customers actually stop buying the product, though they might buy the product from another provider).

The lack of reasonable substitute products typically is seen as accounting for, or contributing, to such behavior, when in most other industries the converse seems to be true. Generally speaking, one would expect consumers to stop using products and services with high dissatisfaction ratings. 

The ACSI study suggests that with an industry aggregate score of 70, the social media industry debuts as one of the lowest-scoring industries measured by the ACSI, surpassing only the airline and cable and satellite television industries. At least one of the satellite providers, and at least one or two of the cable and telco providers, would likely contest their company findings, within the overall category rankings, as there is some significant variation with the overall category. 

It also should be kept in mind that the scores are relative. Numerical scores are given for companies and products, and then compared across industry boundaries. It probably is worth noting that most categories receive scores in the "80s." Just three categories--social media, airlines and subscription TV--score from 66 to 70. The scores at the bottom are relatively lower, but you might wonder what difference a score in the "80s" actually means when compared to scores in the "66 to 70" range. 

On the measure of high and sustained consumer use of all products, irrespective of scores, one might impertinently suggest the opposite conclusion than the ACSI survey generally touts, namely that consumer satisfaction matters. 

To the extent that social media, airlines and subscription TV remain successful businesses, one might argue that, irrespective of consumer satisfaction, the key issue is the degree of choice within each product category, and the generally-acceptable level of price or product performance within each category. 

In other words, the key metric is how well competitors in each category perform, not whether consumers indicate they are more or less happy with the general category of products. 

The ACSI measures 223 companies (including both online and offline companies across all economic sectors and industries). Of those 223 companies, only 10 score a 65 or below, including Facebook and MySpace, which puts them in the bottom five percent of all measured private sector companies.

Of the 140 federal government agencies and websites measured by the ACSI, 11 score lower than 65 (including the IRS), which means 90 percent of federal government entities measured by the ACSI outscore Facebook and MySpace in terms of customer satisfaction. The other issue there is simply actual customer experience. Is it reasonable to believe most respondents actually have had sustained experience with 140 federal agencies? 

The other issue might be the frequency of use and emotional involvement with various product categories. Most people probably use their personal care, video and social media products daily, and those products are fairly personal. Other products might be used so rarely, and the interactions being so perfunctory, that getting a meaningful rating would be difficult. 

In other results, satisfaction with news and information sites stayed even at 74. The big news in this industry is the debut of at the top of the heap with a score of 82, which is five points above nearest competitor (77). brings up the rear (73).

Customer satisfaction with portals and search engines dropped seven points to 77 this year and is driven largely by a seven-percent decline for Google (down six points to 80). Bing was measured for the first time this year, and it makes a strong first showing with a score of 77, second only to Google.

One would hate to suggest that customer satisfaction does not matter. But the correlation between satisfaction and other financial metrics is not as clear as some might think. 

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Stefania Viscusi

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