Customer Satisfaction Research Conceptualization and Analysis of Strategic Customer Satisfaction Research The information ...
Discussion Outline <ul><li>Conceptualize the issues from the “client” or end-user perspective: </li></ul><ul><ul><li>What ...
Discussion Outline (cont.) <ul><li>“ Strategic” Customer Satisfaction research typically includes: </li></ul><ul><ul><li>A...
Conceptualization of Customer Satisfaction Research Problems
Is Customer Satisfaction Important? <ul><li>What good is customer satisfaction anyway? </li></ul><ul><ul><li>Companies wit...
Typical Customer Satisfaction Research Objectives <ul><li>Develop a method or model for assessing customer satisfaction, r...
What Clients Want to Know <ul><li>What is the connection between internal “hard” measures of business processes (often cal...
Conceptual Model Platform
Guiding Conceptual Issues <ul><li>The ultimate outcome or “dependent variable” that is the target for the model should be ...
Defining Outcomes <ul><li>Outcomes represent major business goals or desired attitudes or behaviors in the marketplace. </...
<ul><li>Customer Care   </li></ul><ul><li>Being easy to do business with  </li></ul><ul><li>Being easy to reach  </li></ul...
Three Typical Outcomes in Satisfaction and Value Models A. CVA  (Customer Value Analysis) B. Quality GAP Analysis and ACSI...
Important Outcomes Related to Customer Satisfaction <ul><li>Customer loyalty defined many ways: </li></ul><ul><ul><li>Futu...
<ul><li>Customer Care   </li></ul><ul><li>Being easy to do business with  </li></ul><ul><li>Being easy to reach  </li></ul...
Selecting Key Drivers <ul><li>Key drivers represent major business processes, relationships, actions or paths of performan...
Specifying Sub-Drivers <ul><li>Sub-drivers are specific business activities, actions, or programs that provide diagnostic ...
Key Concepts – Summary <ul><li>Customer satisfaction models are complex models with hierarchical structures, and direct an...
Structural Equation Modeling as the Analytical Tool
Why Use MSImpact Modeling  : a proprietary SEM approach? <ul><li>MSImpact Modeling identifies the action priorities throu...
The Scientific Case for MSImpact Modeling <ul><li>Partial Least Squares (or PLS) “is a methodology for estimating latent v...
The Scientific Case for MSImpact Modeling (cont.) <ul><li>Key issues continued: </li></ul><ul><ul><li>The model is built o...
Measurement and Scaling Issues <ul><li>Each component in the model should be well-measured.  This typically means the idea...
Some MSImpact Modeling Terminology <ul><li>Attributes/Measures/Variables/Items </li></ul><ul><ul><li>Specific questions as...
Indexes and Scores <ul><li>The following example shows the Index and the scores for a component of the model.  </li></ul><...
Component Indexes and Question Scores <ul><li>Doing things right the first time </li></ul><ul><li>Making an effort to foll...
Direct and Total Impacts <ul><li>Direct impacts  </li></ul><ul><ul><li>Represented by arrows in the path diagram. </li></u...
Interpreting Impacts <ul><li>If performance on Customer Solutions is improved by 5 points, from 68 to 73, the model predic...
Calculation of Total Impacts Reliability and Restoration Example Total Impact =  Direct Impact + Sum (Any Indirect Impacts...
EXAMPLE ESTIMATED MODEL Value  Corporate Reputation Overall Satisfaction  Impacts on: Value Satisfaction Corp. Rep. Reliab...
Key Driver Impacts on Customer Satisfaction Total Impact Performance Index Customer Solutions Management Reputation Reliab...
Respondent Level Scores and Indexes <ul><li>One of the major features of MSImpact Modeling is that it assigns scores and i...
Relationship Between Customer Solutions and  Overall Satisfaction Customer Solutions Overall Satisfaction Sat. Index = 75
Making “Predictions” <ul><li>MSImpact Modeling is designed to make “predictions” or “estimates” of “what if” scenarios if ...
MSImpact Modeling Predictive Validity Example from the Utilities Industry 81 62 70 72 68 2.5 1.2 0.8 1.5 1.4  84 61 72 75 ...
MSImpact Modeling Analytic Advantages <ul><li>The MSImpact Modeling system produces results which are significantly more p...
MSImpact Modeling Analytic Advantages <ul><li>Simultaneous analysis of multiple outcomes and multiple drivers. </li></ul><...
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Market Research articles

  1. 1. Customer Satisfaction Research Conceptualization and Analysis of Strategic Customer Satisfaction Research The information and examples contained in this document are confidential and proprietary to Market Strategies International.
  2. 2. Discussion Outline <ul><li>Conceptualize the issues from the “client” or end-user perspective: </li></ul><ul><ul><li>What information will direct their decisions? </li></ul></ul><ul><ul><li>What are the “solutions” (e.g., conclusions and recommendations) that will be most useful to them? </li></ul></ul><ul><ul><li>How should the model be conceptualized and operationalized with specific questions. </li></ul></ul><ul><li>The mathematical or estimated model solution using structural equation modeling. </li></ul><ul><li>Additional analysis examples. </li></ul>
  3. 3. Discussion Outline (cont.) <ul><li>“ Strategic” Customer Satisfaction research typically includes: </li></ul><ul><ul><li>All customers regardless of their recent purchase or service usage behavior, and often includes the total market and competitors; and </li></ul></ul><ul><ul><li>Provides a broad view of the total relationship with customers, and tries to be inclusive of the major factors that influence that relationship. </li></ul></ul><ul><li>“ Tactical” Customer Satisfaction research typically includes: </li></ul><ul><ul><li>A focus on a recent transaction or interaction with the company involving a specific product or part of the service relationship; and </li></ul></ul><ul><ul><li>An immediate evaluation of that experience in order to obtain more specificity and detail regarding how that interaction is perceived by the customer. </li></ul></ul>
  4. 4. Conceptualization of Customer Satisfaction Research Problems
  5. 5. Is Customer Satisfaction Important? <ul><li>What good is customer satisfaction anyway? </li></ul><ul><ul><li>Companies with satisfied customers have better relations with regulators and legislators, local officials, and opinion leaders. </li></ul></ul><ul><ul><li>Customer satisfaction and employee satisfaction interact with each other. </li></ul></ul><ul><ul><li>Dissatisfied customers cost lots of money to serve. Fixing business processes that create dissatisfaction is harder and more costly than doing it right the first time. </li></ul></ul><ul><ul><li>Customer satisfaction is often part of an organization's vision and mission, and the right thing to do. </li></ul></ul><ul><ul><li>Companies with higher satisfaction levels have better financial results (ACSI theory). </li></ul></ul><ul><ul><li>Satisfied customers will buy products and services; dissatisfied won’t (although it takes a very satisfied customer to be loyal customer). </li></ul></ul>
  6. 6. Typical Customer Satisfaction Research Objectives <ul><li>Develop a method or model for assessing customer satisfaction, relative to investments made in operations, training, communications, and products and services. </li></ul><ul><ul><li>What other outcomes are related to customer satisfaction, and how do those interrelationships work? Examples are perceptions of value, perceptions of “brand,” product/service preferences, likelihood to purchase or repurchase, and measures of customer loyalty. </li></ul></ul><ul><ul><li>What drivers of customer satisfaction (and other outcomes) have the biggest impact? </li></ul></ul><ul><ul><li>What levels of performance currently exist across the system? </li></ul></ul><ul><ul><li>What levels of performance would improve, sustain, or decrease customer satisfaction? </li></ul></ul><ul><li>Assess improvement and/or efficiency opportunities based on internal metrics: </li></ul><ul><ul><li>Tie the modeling to internal metrics and provide specific “gap” analyses to show the key “cut points” for improvement or efficiency targets; and </li></ul></ul><ul><ul><li>Conduct the cost analysis for improvement or efficiency activities. </li></ul></ul><ul><li>Assess market opportunities tied to customer and external data. </li></ul>
  7. 7. What Clients Want to Know <ul><li>What is the connection between internal “hard” measures of business processes (often called “metrics” or standards of measurement) and customer satisfaction in terms of reactions and evaluations of those same business processes? </li></ul><ul><li>What are the connections between customer satisfaction and “external” indicators such as market share and financial performance. </li></ul><ul><li>How do I improve Customer Satisfaction? </li></ul><ul><ul><li>I have many different business processes and decisions and many different factors that affect my relationship with customers and customer satisfaction. </li></ul></ul><ul><ul><ul><li>Which factors should I measure? </li></ul></ul></ul><ul><ul><ul><li>Which factors are most important to customers? </li></ul></ul></ul><ul><ul><ul><li>Which factors have the largest effect on customer satisfaction? </li></ul></ul></ul><ul><li>Management wants measurable customer satisfaction goals and objectives. </li></ul><ul><ul><li>How do I know where I stand today? </li></ul></ul><ul><ul><li>How do I know what a “reasonable” objective is on a quarterly, annual, or multi-year basis? </li></ul></ul>
  8. 8. Conceptual Model Platform
  9. 9. Guiding Conceptual Issues <ul><li>The ultimate outcome or “dependent variable” that is the target for the model should be the ultimate attitude or behavior that the client is trying to impact. However, models often have two or more dependent outcomes. </li></ul><ul><li>Models should attempt to be inclusive of “major business processes” or major relationships or paths between performance and outcomes. Performance measurement of drivers is typical. </li></ul><ul><li>The more detail and hierarchy, the better because the models become more diagnostic, inclusive, and actionable. </li></ul><ul><li>Components are defined by tightly related sets of measures. We are modeling at the component level. If one measure improves or declines, all measures should improve or decline. The ideal component is 3-4 measures . More than that may be overkill or should be divided into two or more components. One or two item components sometimes do not compete well with components having more measures. </li></ul>
  10. 10. Defining Outcomes <ul><li>Outcomes represent major business goals or desired attitudes or behaviors in the marketplace. </li></ul><ul><li>Outcomes are often tied to specific annual business goals and objectives, and corporate incentive pay programs. </li></ul><ul><li>Outcomes typically have long theoretical trails from both the academic and commercial literature. </li></ul><ul><li>Outcomes provide the customer an opportunity to summarize their overall experience with the company in a few measures. </li></ul><ul><li>Outcomes connect to future behavioral intentions. </li></ul>Customer Satisfaction and Other Outcomes
  11. 11. <ul><li>Customer Care </li></ul><ul><li>Being easy to do business with </li></ul><ul><li>Being easy to reach </li></ul><ul><li>Being flexible to meet customer needs </li></ul><ul><li>Price </li></ul><ul><li>Reasonableness of electric prices </li></ul><ul><li>Keeping electricity prices as low as possible </li></ul><ul><li>Working hard to control their costs </li></ul>EXAMPLE CONCEPTUAL MODEL <ul><li>Value </li></ul><ul><li>Value of the product -- electricity </li></ul><ul><li>Value of customer service </li></ul><ul><li>Value of community activities </li></ul><ul><li>Corporate Reputation </li></ul><ul><li>Overall favorability </li></ul><ul><li>Management Reputation </li></ul><ul><li>Being a well-managed company </li></ul><ul><li>Being a company you can trust </li></ul><ul><li>Being honest and forthright in dealing with customers </li></ul><ul><li>Being believable </li></ul><ul><li>Being a leader in the industry </li></ul><ul><li>Overall Satisfaction </li></ul><ul><li>Overall satisfaction </li></ul><ul><li>Meeting expectations </li></ul><ul><li>Comparison to the ideal utility </li></ul><ul><li>System Maintenance </li></ul><ul><li>Adequately trimming trees to protect lines & prevent outages </li></ul><ul><li>Having an electric delivery system that meets growing cust. needs </li></ul><ul><li>Keeping the electrical system in good working order </li></ul><ul><li>Community Involvement </li></ul><ul><li>Working to protect the environment </li></ul><ul><li>Being involved in community organizations & activities </li></ul><ul><li>Helping the local economy by working to retain or attract businesses/jobs </li></ul><ul><li>Billing </li></ul><ul><li>Providing accurate bills </li></ul><ul><li>Providing bills that are easy to understand </li></ul><ul><li>Correcting billing errors promptly if they occur </li></ul><ul><li>Energy Efficiency Information </li></ul><ul><li>Having programs to help customers save energy </li></ul><ul><li>Providing information on how to control electricity costs </li></ul><ul><li>Promoting energy conservation </li></ul>Impacts on: Value Satisfaction Corp. Rep. <ul><li>Outage Management </li></ul><ul><li>Providing reliable estimates of when power will be restored </li></ul><ul><li>Being accessible by phone during an outage </li></ul><ul><li>Letting you know what caused a power outage </li></ul><ul><li>Reliability and Restoration </li></ul><ul><li>Keeping the number of outages to a minimum </li></ul><ul><li>Keeping the length of outages to a minimum </li></ul><ul><li>Restoring power quickly </li></ul><ul><li>Minimizing interruptions </li></ul><ul><li>Providing good power quality </li></ul><ul><li>Customer Solutions </li></ul><ul><li>Resolving problems or inquiries </li></ul><ul><li>Making an effort to follow through on promises made to customers </li></ul><ul><li>Doing things right the first time </li></ul>SUB-DRIVERS KEY DRIVERS OUTCOMES <ul><li>Telephone Contact Satisfaction </li></ul><ul><li>Satisfaction with phone contact service </li></ul><ul><li>Satisfaction w/service representative </li></ul><ul><li>Safety </li></ul><ul><li>Helping customers use electricity safely </li></ul><ul><li>Having power lines, equipment and facilities that are safe </li></ul><ul><li>General Employee Service </li></ul><ul><li>Having courteous employees </li></ul><ul><li>Having employees who listen to customers </li></ul><ul><li>Showing concern for customers </li></ul><ul><li>Having knowledgeable employees </li></ul><ul><li>Having employees that are willing to help </li></ul><ul><li>Field Employees </li></ul><ul><li>Having knowledgeable field employees </li></ul><ul><li>Having field employees who are willing to help </li></ul><ul><li>Having hardworking field employees </li></ul>A B C D E Impacts on: A C D E A C D E C B D E A A A D E B E D E Willingness to Recommend Future Purchase Intention
  12. 12. Three Typical Outcomes in Satisfaction and Value Models A. CVA (Customer Value Analysis) B. Quality GAP Analysis and ACSI C. Competitive Position Value Satisfaction Reputation Reputation and Brand ( Favorability or Approval ) Satisfaction Expectations Ideal Quality Price = = = = = =
  13. 13. Important Outcomes Related to Customer Satisfaction <ul><li>Customer loyalty defined many ways: </li></ul><ul><ul><li>Future purchase intentions; </li></ul></ul><ul><ul><li>Recommendation to others; and </li></ul></ul><ul><ul><li>Attitude that a company has “earned my loyalty”. </li></ul></ul><ul><li>Actual purchase behavior in terms of share of product or service category (e.g., dollars, usage). </li></ul><ul><li>“ Brand” loyalty. </li></ul><ul><li>Interest or likelihood of purchase of new products and services. </li></ul>
  14. 14. <ul><li>Customer Care </li></ul><ul><li>Being easy to do business with </li></ul><ul><li>Being easy to reach </li></ul><ul><li>Being flexible to meet customer needs </li></ul><ul><li>Price </li></ul><ul><li>Reasonableness of electric prices </li></ul><ul><li>Keeping electricity prices as low as possible </li></ul><ul><li>Working hard to control their costs </li></ul><ul><li>Value </li></ul><ul><li>Value of the product -- electricity </li></ul><ul><li>Value of customer service </li></ul><ul><li>Value of community activities </li></ul><ul><li>Corporate Reputation </li></ul><ul><li>Overall favorability </li></ul><ul><li>Management Reputation </li></ul><ul><li>Being a well-managed company </li></ul><ul><li>Being a company you can trust </li></ul><ul><li>Being honest and forthright in dealing with customers </li></ul><ul><li>Being believable </li></ul><ul><li>Being a leader in the industry </li></ul><ul><li>Overall Satisfaction </li></ul><ul><li>Overall satisfaction </li></ul><ul><li>Meeting expectations </li></ul><ul><li>Comparison to the ideal utility </li></ul><ul><li>System Maintenance </li></ul><ul><li>Adequately trimming trees to protect lines & prevent outages </li></ul><ul><li>Having an electric delivery system that meets growing cust. needs </li></ul><ul><li>Keeping the electrical system in good working order </li></ul><ul><li>Community Involvement </li></ul><ul><li>Working to protect the environment </li></ul><ul><li>Being involved in community organizations & activities </li></ul><ul><li>Helping the local economy by working to retain or attract businesses/jobs </li></ul><ul><li>Billing </li></ul><ul><li>Providing accurate bills </li></ul><ul><li>Providing bills that are easy to understand </li></ul><ul><li>Correcting billing errors promptly if they occur </li></ul><ul><li>Energy Efficiency Information </li></ul><ul><li>Having programs to help customers save energy </li></ul><ul><li>Providing information on how to control electricity costs </li></ul><ul><li>Promoting energy conservation </li></ul>Impacts on: Value Satisfaction Corp. Rep. <ul><li>Outage Management </li></ul><ul><li>Providing reliable estimates of when power will be restored </li></ul><ul><li>Being accessible by phone during an outage </li></ul><ul><li>Letting you know what caused a power outage </li></ul><ul><li>Reliability and Restoration </li></ul><ul><li>Keeping the number of outages to a minimum </li></ul><ul><li>Keeping the length of outages to a minimum </li></ul><ul><li>Restoring power quickly </li></ul><ul><li>Minimizing interruptions </li></ul><ul><li>Providing good power quality </li></ul><ul><li>Customer Solutions </li></ul><ul><li>Resolving problems or inquiries </li></ul><ul><li>Making an effort to follow through on promises made to customers </li></ul><ul><li>Doing things right the first time </li></ul>SUB-DRIVERS KEY DRIVERS OUTCOMES <ul><li>Telephone Contact Satisfaction </li></ul><ul><li>Satisfaction with phone contact service </li></ul><ul><li>Satisfaction w/service representative </li></ul><ul><li>Safety </li></ul><ul><li>Helping customers use electricity safely </li></ul><ul><li>Having power lines, equipment and facilities that are safe </li></ul><ul><li>General Employee Service </li></ul><ul><li>Having courteous employees </li></ul><ul><li>Having employees who listen to customers </li></ul><ul><li>Showing concern for customers </li></ul><ul><li>Having knowledgeable employees </li></ul><ul><li>Having employees that are willing to help </li></ul><ul><li>Field Employees </li></ul><ul><li>Having knowledgeable field employees </li></ul><ul><li>Having field employees who are willing to help </li></ul><ul><li>Having hardworking field employees </li></ul>A B C D E Impacts on: A C D E A C D E C B D E A A A D E B E D E Willingness to Recommend Future Purchase Intention EXAMPLE CONCEPTUAL MODEL
  15. 15. Selecting Key Drivers <ul><li>Key drivers represent major business processes, relationships, actions or paths of performance that are hypothesized to affect the outcome. </li></ul><ul><li>In a business or organization, key drivers are typically equivalent to the major departments or business processes that are “owned” at the officer level, and often tied to their goals. </li></ul><ul><li>Key drivers are the questions that you would address on tracking surveys, even if you were not modeling. </li></ul><ul><li>Key driver questions have a more summary, inclusive character that obtains high response, and low missing data. </li></ul><ul><li>Key drivers are able to compete with each other at the same level of generality. </li></ul>
  16. 16. Specifying Sub-Drivers <ul><li>Sub-drivers are specific business activities, actions, or programs that provide diagnostic detail to models. </li></ul><ul><li>Sub-drivers should be conceptually linked to key drivers. </li></ul><ul><li>Individual mid-level managers can find themselves among the sub-drivers in the model. </li></ul><ul><li>A common level of specificity at the sub-driver level results in a “fair competition” among sub-drivers in explaining key drivers. </li></ul><ul><li>Sub-drivers can be directly tied to internal metrics. </li></ul><ul><li>Multiple-levels of sub-drivers are possible in a hierarchical model. </li></ul>
  17. 17. Key Concepts – Summary <ul><li>Customer satisfaction models are complex models with hierarchical structures, and direct and indirect relationships. </li></ul><ul><li>Theory and business knowledge inform the structures of models and should generally prevail over empirical results in specifying the structure and defining the components. </li></ul><ul><li>Models have outcomes, key drivers, and sub-drivers. Each concept has a place in the model based on its generality, or diagnostic specificity, and its competitive relationship with other components at that same level. </li></ul><ul><li>Components are often combinations of questions summarized as latent constructs, defined by the highly related set of measures. Naming components requires business knowledge and creativity, and the names should accurately reflect the underlying measures in the component. </li></ul><ul><li>Well-constructed models have proven to be stable and consistent over time, and predictive across time. </li></ul><ul><li>Models, however, are designed to be flexible and forward-looking, to accommodate changes in the population being surveyed, the client organization or mission, and the marketplace. </li></ul>
  18. 18. Structural Equation Modeling as the Analytical Tool
  19. 19. Why Use MSImpact Modeling  : a proprietary SEM approach? <ul><li>MSImpact Modeling identifies the action priorities through the simultaneous investigation of multiple factors impacting on multiple outcomes in a hierarchical str ucture of outcomes, drivers, and sub-drivers. </li></ul><ul><li>Senior management to line managers can &quot;own&quot; performance categories and outcomes and identify specific actions with specific drivers. </li></ul><ul><li>Goals and objectives can be set. </li></ul><ul><li>Stable, consistent, and predictive results are obtained. </li></ul><ul><li>Models are flexible to adapt to changing organizations, business or customer priorities, or market factors. </li></ul>
  20. 20. The Scientific Case for MSImpact Modeling <ul><li>Partial Least Squares (or PLS) “is a methodology for estimating latent variable structural equations models (LVSEMs) based on an iterated sequence of simple and multiple least squares regression steps.” </li></ul><ul><li>PLS has antecedents in and connections to economics, sociology, psychology, and statistics (see PLS chapter). </li></ul><ul><li>Key issues: </li></ul><ul><ul><li>The theory of how a structure of relationships is organized is paramount in the modeling. No “naïve empiricism” allowed (e.g. let’s run everything by everything and see what falls out). </li></ul></ul><ul><ul><li>Fewer constraints on measurement scales, distributional characteristics of variables, or sample sizes are required (although there are some approaches that are clearly more desirable than others). </li></ul></ul><ul><ul><li>MSImpact Modeling produces a sequence of estimates , typically in a hierarchical structure , that are described as predictions not causes (e.g. things co-vary and are related even if the cause and effect sequence is not clear). </li></ul></ul>
  21. 21. The Scientific Case for MSImpact Modeling (cont.) <ul><li>Key issues continued: </li></ul><ul><ul><li>The model is built on components that are latent or unobserved constructs , represented by manifest or observable measures , in weighted combinations. In some sense, the construct “causes” the indicators, similar to I.Q. being a latent component that “causes” certain skills. Indicators (questions) are intended to be a representative (but not necessarily inclusive) set of the things caused by the underlying construct. </li></ul></ul><ul><ul><li>Manifest variables (e.g. items, measures, attributes) can be measured on different scales . </li></ul></ul><ul><ul><li>Each component and measure can have an unknown or skewed distribution (like satisfaction data typically does). </li></ul></ul><ul><ul><li>Large numbers of latent and manifest variables can be organized and analyzed in one structure. </li></ul></ul>
  22. 22. Measurement and Scaling Issues <ul><li>Each component in the model should be well-measured. This typically means the ideal component has three to four items. Two is o.k. One may or may not be a problem. Five or more is probably overkill. </li></ul><ul><li>Because of the mathematical transformation of original scale points into 0-100 scales, virtually any scale with three or more points could be used in the modeling. However, we strongly recommend no fewer than five point scales and 0-10 scales are ideal. </li></ul><ul><ul><li>The mean of a 0-10 scale translates directly into a score on a 0-100 scale. </li></ul></ul><ul><ul><li>Scales using 0-10 are 11 point scales with a neutral point. Whether the neutral point is labeled or not, however, engenders some debate. </li></ul></ul>
  23. 23. Some MSImpact Modeling Terminology <ul><li>Attributes/Measures/Variables/Items </li></ul><ul><ul><li>Specific questions asked in the survey translated into 0-100 scores for each item included in the model. </li></ul></ul><ul><li>Key Driver or Sub-Driver Component </li></ul><ul><ul><li>Combination of survey questions which are conceptually and empirically related to each other and defined as &quot;key drivers“ (primary paths, business processes or relationships) or &quot;sub drivers” (specific and discrete business process, activities, or relationships). Components have 0-100 indexes which are weighted combinations of the scores. </li></ul></ul><ul><li>Outcomes </li></ul><ul><ul><li>Summary attitudes or behaviors that are the targets for improvements, also on 0-100 indexes (and item scores). </li></ul></ul><ul><li>Impacts </li></ul><ul><ul><li>Number suggesting the predicted increase in the Index for a given Outcome (e.g., Satisfaction or Loyalty) that would result from a five point improvement in a Driver Component Index. </li></ul></ul>
  24. 24. Indexes and Scores <ul><li>The following example shows the Index and the scores for a component of the model. </li></ul><ul><ul><li>Everything is calibrated on the same 0-100 scale regardless of the original scale in the questionnaire. </li></ul></ul><ul><ul><li>All items have relatively similar scores. Well-measured components with tightly related items should have similar item scores. However, it is still possible to observe statistically significant differences among the scores to do a strengths/weaknesses type of analysis. </li></ul></ul><ul><ul><li>Items on a well-constructed, well-measured component should have similar weights, and typically do. The weights provide no real guidance of strength or weakness. </li></ul></ul>
  25. 25. Component Indexes and Question Scores <ul><li>Doing things right the first time </li></ul><ul><li>Making an effort to follow through on promises made to customers </li></ul><ul><li>Resolving problems or inquiries </li></ul>Customer Solutions 68 67 70 68
  26. 26. Direct and Total Impacts <ul><li>Direct impacts </li></ul><ul><ul><li>Represented by arrows in the path diagram. </li></ul></ul><ul><ul><li>Describe the unique path between the components, not counting the indirect paths in the structure. </li></ul></ul><ul><ul><li>Can be added together at any one level in the model, but not across levels. </li></ul></ul><ul><li>Total impacts </li></ul><ul><ul><li>Answer the question “How much impact is possible” through both direct and indirect paths. </li></ul></ul><ul><ul><li>Total impacts can also be added together. </li></ul></ul>
  27. 27. Interpreting Impacts <ul><li>If performance on Customer Solutions is improved by 5 points, from 68 to 73, the model predicts that Satisfaction will increase by 1.4 points, from 75 to 76.4. </li></ul>Overall Satisfaction Customer Solutions 1.4 Impact of Customer Service Quality on Satisfaction 68 75
  28. 28. Calculation of Total Impacts Reliability and Restoration Example Total Impact = Direct Impact + Sum (Any Indirect Impacts) Total Impact ( Rel/Restoration (C 1 ) on Satisfaction (C 4 ) ) = Direct + Indirect = 1.273 + [ (1.967 / 5) * (3.164 / 5) ] * 5 = 1.273 + 1.245 = 2.518 Direct Impacts (Solid Lines) Indirect Impacts (Dotted Lines) = Total Impacts 1.273 1.967 3.164 C 1 C 2 C 4 C 3
  29. 29. EXAMPLE ESTIMATED MODEL Value Corporate Reputation Overall Satisfaction Impacts on: Value Satisfaction Corp. Rep. Reliability and Restoration SUB-DRIVERS KEY DRIVERS OUTCOMES General Employee Service Field Employees A B C D E Impacts on: A C D E A C D E C B D E A A A D E B E D E Community Involvement 0.8 2.1 1.0 0.6 2.5 0.9 1.3 1.2 1.0 0.7 0.8 1.2 0.5 1.5 0.8 0.8 1.4 0.9 0.8 0.6 0.2 0.8 0.6 0.6 1.1 1.1 1.3 1.7 1.3 1.4 0.5 0.7 0.8 0.4 0.6 1.0 0.8 1.2 1.1 Willingness to Recommend Future Purchase Intention 2.0 1.1 1.5 Impacts on: Recommend Purchase Intention 1.8 2.1 1.7 1.3 Customer Care Price Management Reputation System Maintenance Billing Energy Efficiency Information Outage Management Customer Solutions Telephone Contact Satisfaction Safety 71 75 76 81 62 70 72 68 77 80 68 75 70 76 82 70 75 74 76
  30. 30. Key Driver Impacts on Customer Satisfaction Total Impact Performance Index Customer Solutions Management Reputation Reliability and Restoration Price 81 68 72 62 Customer Care 70
  31. 31. Respondent Level Scores and Indexes <ul><li>One of the major features of MSImpact Modeling is that it assigns scores and indexes at the respondent level. These data provide the opportunity to identify distributional relationships between indexes. </li></ul><ul><li>With enough sample, distributions could be arrayed in one point increments. However, because of the five-point change idea in impacts, five-point increments are used in the following example. </li></ul><ul><li>Note that the relationship with satisfaction is linear all the way through the 96+ category of service performance. </li></ul>
  32. 32. Relationship Between Customer Solutions and Overall Satisfaction Customer Solutions Overall Satisfaction Sat. Index = 75
  33. 33. Making “Predictions” <ul><li>MSImpact Modeling is designed to make “predictions” or “estimates” of “what if” scenarios if changes in components occur (e.g. what would happen to satisfaction if a five point change occurs in customer service?). </li></ul><ul><li>Changes in indexes and scores are easy to calculate from Time 1 to Time 2. However, the changes must be calculated at the same level of the model or substitutes for a component must be made from another level of the model. </li></ul><ul><li>Impacts are designed to be predictions. However, philosophically, impacts are representations of how relationships work currently or in the immediate past. Should past impacts (Time 1) be used in the calculation or current impacts (Time 2)? Thus far, past impacts have been used. </li></ul><ul><li>Clearly, consistency and stability in the model structure is important to being able to make predictions or estimates. However, a well-designed structure can account for modest changes and still make good predictions. </li></ul>
  34. 34. MSImpact Modeling Predictive Validity Example from the Utilities Industry 81 62 70 72 68 2.5 1.2 0.8 1.5 1.4 84 61 72 75 70 3 -1 2 3 2 1.5 -0.2 0.3 0.9 0.6 T1 Driver Indexes T1 Impacts on Satisfaction T2 Driver Indexes Actual Change in Driver Indexes Predicted Change in Satisfaction Index Total = 3.1 Predicted change in Satisfaction Index Satisfaction T1=75 T2=78 Actual change in Satisfaction Index = 3.0 Reliability and Restoration Price Customer Care Customer Solutions Management Reputation
  35. 35. MSImpact Modeling Analytic Advantages <ul><li>The MSImpact Modeling system produces results which are significantly more precise (reliable) than those produced through standard multivariate analytical techniques. </li></ul><ul><li>The MSImpact Modeling system features multiple measures of key driver and sub-driver performance components for greater stability in constructing the indexes. </li></ul><ul><li>Impacts are calculated to optimize the prediction of the relationships among driver components, and between driver components and outcomes such as satisfaction and purchase behavior. </li></ul>
  36. 36. MSImpact Modeling Analytic Advantages <ul><li>Simultaneous analysis of multiple outcomes and multiple drivers. </li></ul><ul><li>Produces both direct and total impact estimates. </li></ul><ul><li>Scores and Indexes are computed for each individual respondent in the data and are available for further analyses. </li></ul><ul><li>Predictions consistently validate over time. </li></ul>

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