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Linkage Analysis in Customer Feedback Programs
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Linkage Analysis in Customer Feedback Programs

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I gave this talk at the Score Conference in Boston in April 2011. I cover linkage analysis to show how companies can use this method to understand the causes and consequences of customer satisfaction ...

I gave this talk at the Score Conference in Boston in April 2011. I cover linkage analysis to show how companies can use this method to understand the causes and consequences of customer satisfaction and loyalty.

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  • Linkage analysis is the process of merging or linking different customer databases together and then analyzing the overall database to uncover important relationships.There are there general types of linkage analyses: The first is Financial – in which we can calculate the dollar value of improving customer loyalty. The second is Operational – in which we identify the operational metrics that are closely linked to customer satisfaction. The third is Constituency – in which we identify how employees and partners impact the quality of the customer relationship.
  • Linkage analysis helps answer important questions that help senior management better manage its business. 1. What is the $ value of improving customer satisfaction/loyalty?2. Which operational metrics have the biggest impact on customer satisfaction/loyalty?3. Which employee/partner factors have the biggest impact on customer satisfaction/loyalty?The bottom line is that linkage analysis helps the company understand the causes and consequences of customer satisfaction and loyalty and thereby helping senior manager better manage its business.Understand the causes and consequences of customer satisfaction/loyalty
  • Points to ConsiderRelationship SurveyEnsure respondents have, at least, some influence in purchasing decisionsDifferent Types of Linkages are Possible
  • Using linkage research, companies can gain important insight about the various causes and consequences of customer satisfaction and loyalty.One, companies will be able to understand how to best manage the customer relationship with operational metrics. Two, they’ll be able to manage the relationships of other important constituencies like employees and partners so they can deliver exceptional customer experience to the customers they serve. Three, they will be able to quantify the value of the CEM program by quantifying the impact that the program has on financial metrics.

Linkage Analysis in Customer Feedback Programs Linkage Analysis in Customer Feedback Programs Presentation Transcript

  • LINKAGE ANALYSIS IN CUSTOMERFEEDBACK PROGRAMSBob E. Hayes, PhDBusiness Over Broadway
  • Overview Linkage Analysis Why Conduct Linkage Studies? Data Management Problem Financial Linkage Operational Linkage Constituency Linkage Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Linkage Analysis Process of combining difference sources of data to understand the relationships among their respective variables  Customer feedback metrics  Financial business metrics  Operational metrics (Call centers)  Constituency (e.g., employee, partner) attitudes Understand the causes and consequences of customer satisfaction/loyalty Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Linkage Analysis Linkage analysis answers the questions:  What is the $ value of improving customer satisfaction/loyalty?  Which operational metrics have the biggest impact on customer satisfaction/loyalty?  Which employee/partner factors have the biggest impact on customer satisfaction/loyalty? Operational Transactional Metrics Satisfaction Relationship Financial Satisfaction/ Business Loyalty Metrics Constituency Satisfaction/ Loyalty Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Adoption Rate across Program Components Adoption Rate ∆ inCustomer Feedback Loyalty Loyalty AdoptionProgram Component Leaders1 Laggards RateStrategy/Governance 89% 71% 18%Business ProcessIntegration 86% 59% 27%Method 72% 60% 12%Reporting 70% 60% 10%Applied Research 80% 51% 31% Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Linkage Studies Improve Customer Loyalty Industry percentile ranking Adopted of customer loyalty 40 50 60 70 80 Not Adopted Statistical relationships are established1. between customer feedback data and… Operational linkage establishedApplied research using customer feedback2. Applied research regularly data is regularly conducted. conducted Statistical relationships are established3. between customer feedback data and… Constituency attitude linkage established Existing information from customer databases is used to help segment… Statistical relationships are established between customer feedback data and… Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Data Silos Data management problem Operational Customer Metrics Feedback Financial1. Call handling time 1. Customer Loyalty2. Number of calls until 2. Relationship resolution satisfaction 1. Revenue3. Response time 3. Transaction satisfaction 2. Number of products purchased 3. Customer tenure Employee 4. Service contractPartner Feedback renewal Feedback 5. Number of sales1. Partner Loyalty 1. Employee Loyalty transactions2. Satisfaction with 2. Satisfaction with 6. Frequency of partnering relationship business areas purchases Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Two Types of Surveys Relationship Surveys  Measure quality of overall relationship with the customer  Administration determined by company  Satisfaction with business areas (e.g., product, support)  Loyalty (retention, advocacy, purchasing) Transactional Surveys  Measure specific customer transaction  Administration determined by customer (transaction occurrence)  Satisfaction with service request / technical support / professionalism/knowledge of staff Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Types of Linkages Customer Feedback Data Sources Relationship Transaction (satisfaction with specific (satisfaction/loyalty to company) transaction/interaction) •Link data at customer levelBusiness Data Sources Financial •Quality of the relationship (sat, (revenue, number of N/A loyalty) impacts financial metrics sales) •Link data at transaction level Operational •Operational metrics impact (call handling, response N/A quality of the transaction time) •Link data at constituency level •Link data at constituency level Constituency •Constituency satisfaction impacts •Constituency satisfaction (employee / partner feedback) customer satisfaction with overall impacts customer satisfaction relationship with interaction Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Financial Metrics Linkage analysis helps us determine if our customer feedback metrics predict real and measurable business outcomes Relationship Financial Retention Satisfaction/ Business Loyalty Metrics  Customer tenure  Customer defection rate  Service contract renewal  Purchasing  Number of products Advocacy purchased  Number of new customers  Number of sales transactions  Revenue  Frequency of purchases Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Customer Feedback / Financial Data Data model associates customer feedback data with business data for each customer (account) Customer Business metric Feedback for a for a given given customer customer (account) (account) Customer x1 (Account) 1 y1 Customer x2 (Account) 2 y2 Customer x3 (Account) 3 y3 Customer x4 (Account) 4 y4 Customer xn (Account) n yn xn represents the customer feedback for customer (account) n. yn represents the business metric for customer (account) n. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Results Customers (Account) with higher levels of satisfaction with the company have higher sales amounts compared to customers (Account) with lower levels of satisfaction We can quantify the value of improving customer satisfaction/loyalty Customer (Account) Satisfaction Sales Amount Dissatisfied Satisfied Extremely Satisfied Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Operational Metrics Linkage analysis helps us determine/identify the operational factors that influence customer satisfaction/loyalty Support Metrics Operational Metrics Transactional Satisfaction  First Call Resolution (FCR)  Number of calls until resolution  Call handling time  Response time  Abandon rate  Average talk time  Adherence & Shrinkage  Average speed of answer (ASA) Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Operational Data / Customer Feedback Data model associates customer feedback data with operational data for each customer interaction Operational Customer metric for a given Feedback for a customer given customer interaction interaction Customer x1 Interaction 1 y1 Customer x2 Interaction 2 y2 Customer x3 Interaction 3 y3 Customer x4 Interaction 4 y4 Customer xn Interaction n yn xn represents the operational metric for customer interaction n. yn represents the customer feedback for customer interaction n. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Results Service requests (SRs) that required fewer calls to resolve the customer issue have higher customer satisfaction ratings compared to SRs requiring more calls to resolution We can identify which operational metrics have the largest impact on customer satisfaction Customer Sat with SR Number of Calls to Resolve SR 1 call 2-3 calls 4-5 calls 6-7 calls 8 or more calls Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Results  Identify customer-centric metrics Total Time to Resolve SR Initial Response TimeCustomer Sat with SR < 1 day 2-7 days 8-14 days 15-30 > 30 days 1 day or 2 days 3 days 4-7 8-14 > 14 days less days days days Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Constituency Metrics Linkage analysis helps us understand how constituency variables impact customer satisfaction/loyalty Customer Employee Satisfaction/ Metrics Satisfaction Metrics Loyalty  Employee satisfaction with Partner business areas Metrics  Partner satisfaction with partner relationship  Other Metrics Loyalty Metrics  Employee training metrics  Employee/Partner loyalty  Partner certification status Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Employee / Customer: Data Model Data model associates employee data with customer data for each employee1 Employee Customer Satisfaction Satisfaction with Company _ x1 Employee 1 y1 _ x2 Employee 2 y2 _ x3 Employee 3 y3 _ x4 Employee 4 y4 _ xn Employee n yn 1Analysis typically conducted for B2B customers where a given employee (sales representative, technical account manager, sales manager) is associated with a given customer (account) _n represents employee satisfaction score for Employee n. x yn represents average customer satisfaction scores across survey respondents for Employee n. Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Results Employee groups with higher levels of satisfaction with the company have customers who report higher levels of loyalty compared to employee groups with lower levels of satisfaction We can identify which employee factors have the largest impact on customer satisfaction Employee Satisfaction Customer Loyalty Dissatisfied Satisfied Extremely Satisfied Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Results Technical Account Managers (TAM) who completed more training had customers who report higher levels of satisfaction with TAM performance Validate usefulness of employee training Number of Completed Courses with TAM Performance Customer Satisfaction 1 Course 2-3 Courses 4-5 Courses More than 5 Courses Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • Linkage Summary Gain additional insight about causes and consequences of customer satisfaction and loyalty Quantifying the value of customer feedback program Manage customer relationships with operational metrics (goal setting, incentive programs) Understand entire business ecosystem and manage all key relationships (employee, partner) so they can deliver an exceptional customer experience Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
  • For More Information Bob E. Hayes, Ph.D. Email: bob@businessoverbroadway.com Web: www.businessoverbroadway.com Blog: www.businessoverbroadway.com/blog Twitter: www.twitter.com/bobehayes Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com