Facebook Stock Reflects Increase in Social Media Customer Satisfaction

- September 21st, 2015

User satisfaction with social media has historically been low, but user experience has improved the last two years.

Social media is so prevalent today that it’s difficult to avoid its influence.
According to Statista, the highest penetration of social networks is in North America, where 60 percent of residents have at least one social media account. In the US, this percentage is even higher, with more than 70 percent of the population maintaining at least one social media profile.
Even more impressive is the fact that these numbers continue to grow. It is estimated that the number of social media users worldwide will reach around 2.5 billion by 2018. To put that into perspective, that’s around one-third of the Earth’s entire population.
But despite the ever-increasing number of social media users, this sector has historically scored low in customer satisfaction. Luckily, it seems that’s starting to change — the American Customer Satisfaction (ACSI) Index E-Business Report 2015 states that customer satisfaction with social media has now risen for two years in a row. In particular, Facebook (NASDAQ:FB) has witnessed a recent surge in user satisfaction.

Increase in customer satisfaction

ACSI includes social media in the e-business category, which also includes search engines and information websites, plus news and opinion websites. Overall, this category increased by 1.4 percent to reach 74.4 points on ASCI’s 100-point scale.
That said, social media was the real driver behind this increase, compensating for a drop in user satisfaction in both search engines and information sites and news and opinion sites. Specifically, social media satisfaction increased by 4.2 percent to reach a score of 74 points.
The report concludes that these gains for social media can be attributed to improvements in all aspects of the customer experience, ranging from privacy to mobile platform optimization.

Facebook sees improved customer experience

Facebook is one company that saw a large increase in customer satisfaction. Facebook is dominant in the social media sector, with 1.49 billion active users worldwide constituting 38.6 percent of the world’s population.
User satisfaction with Facebook increased by 12 percent to reach a score of 75 on the ASCI scale, ahead of the industry average. This increased satisfaction may be partially attributable to the the company’s increased efforts to give customers greater control over their privacy settings. Enhanced mobile experience could be another factor. As Statista states, 68 percent of time spent on Facebook occurs on mobile devices, making this platform highly important for user satisfaction.
Finally, the ways in which the social network is used could be impacting user experience. The website is becoming an important news source for users, acting as a distribution channel for media outlets.

Facebook stock rises

This increased user satisfaction appears to be reflected in the rising price of Facebook stock. The ASCI report notes that the company’s share price has returned more than 35 percent to investors over the past 12 months. Today, Facebook stock is trading at $95.55 per share, near the top of its 52-week range of $70.32 to $99.24.
 
Securities Disclosure: I, Morag McGreevey, hold no direct investment interest in any company mentioned in this article.

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