Customer Relationship Diagnostic: Sample Report

CUSTOMER RELATIONSHIP
DIAGNOSTIC (CRD)
SUMMARY RESULTS FOR ACME COMPANY
BOB E. HAYES, PHD
BUSINESS OVER BROADWAY

Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · bob@businessoverbroadway.com · www.businessoverbroadway.com
Overview
 Executive Summary
 Respondent Profile
 Customer Loyalty Dashboard
 Customer Loyalty
 Customer Experience
 Driver Matrix
 Advocacy, Purchasing, Retention
 Revenue
 At risk
 Potential revenue growth
 Product Quality
 Benchmarks
 Advocacy, Purchasing, Retention

Executive Summary - Method
 ACME’s customers were surveyed from Jan 20 through Feb 3,
2011 (400 Accounts with 4500 Contacts)
 Web-based survey with email invitation and two reminder
emails
 Response rate:
 540 Contacts responded (12% response rate)
 272 Accounts responded (68% response rate)
 Survey Content:
 RAPID loyalty questions and customer experience
questions
 Decision status, Job level
 Compared to competition

Executive Summary - Conclusions
 ACME customers are not extremely loyal to
ACME
 Much room for improvement across all components of
customer loyalty (Advocacy, Purchasing, Retention)
 80% are satisfied but less than half will buy different/new
product (41%) or expand their usage of ACME products in
the company (44%)
 Customer Loyalty Impacts Revenue
 Annual revenue growth through word-of-mouth is
$272,500.00
 Annual revenue growth through up/cross-selling is
$168,000.00
 Annual revenue at risk due to churn is $488,000.00

 Improving revenue starts with improving these areas of the
customer experience
 Overall Product Quality, Future Product/Company Direction and
Communication from Company
 Large ROI and net revenue is expected if company improves
future product/company direction
 40% of customers say products do not have enough
functionality
 Product A is rated better than Product B and Product C
Product Quality
Future Product/
Company Direction
Communication
from Company
Saved/Additional Revenue $ (52,771.88) $263,624.35 $98,396.10
Cost to correct (goal of 0% dissatisfaction) $45,000.00 $50,000.00 $15,000.00
Net Revenue (Saved/Add Rev - Cost) $(97,771.88) $213,624.35 $83,396.10
ROI (Saved/Add Rev / Cost) -217% 427% 556%

 ACME’s overall performance is considered typical by
their customers
 Industry Percentile Rank is estimated to be 54th percentile
 Compared to companies in other industries, ACME
tends to fall at the low end of the distribution with
respect to advocacy loyalty and purchasing loyalty

Respondent Profile
Primary
Decision
Maker
12%
Decision
Influencer
66%
No Influence
22%
Executive (C-
level, VP, Man
aging
Director)
22%
Director
11%
Manager
(with direct
reports)
35%
Individual
Contributor
(no direct
reports)
32%
1. Most of the respondents have an influence
in buying decisions (decision influencers =
66%; primary decision makers = 12%);
2. Only difference across three groups is
respondents with “no influence” reported
higher advocacy loyalty
1. Most of the survey respondents are
Managers and Individual Contributors
(67%). Director and Executive level
respondents make up 33% of the sample.
2. No statistically significant difference on any
key metrics.

Customer Loyalty Dashboard
Customer Loyalty Metrics1
Advocacy Loyalty Percent Positive
Satisfied 79%
Select vendor again 71%
Recommend 72%
Continue using 76%
Purchasing Loyalty Percent Positive
Purchase different or new 41%
Expand usage 44%
Retention Loyalty Percent Positive
Not leave / Stop using2 69%
1 Customer Loyalty measured by RAPID loyalty approach. Please see Business Over Broadway for details. Percent Positive ratings reflect
percent of customers who gave ratings of 6 or greater (on a 0-10 scale).
2 Percent positive reflect percent of respondents reporting they are unlikely to stop using ACME.
1. Retention: Most
customers did not indicate
they would stop using
ACME (69%)
2. Advocacy: Most customers
said they are satisfied
(79%) and will likely
recommend ACME (72%)
3. Purchasing: Less than 50%
of customers said they will
likely purchase
different/new services
(41%) and expand usage of
ACME (44% ).
ACME Loyalty Summary

0
1
2
3
4
5
6
7
8
9
10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Overall
Satisfaction
Choose again Recommend Continue using Purchase
different or new
Expand usage Stop using*
Average
PercentofRespondents
Ratings of 9 or 10 Ratings of 6-8 Ratings of 0-5 Average
Ratings are on a 0 (Not at all likely) to 10 (Extremely likely) scale; For Overall Satisfaction, ratings are on a 0 (Extremely Dissatisfied) to 10
(Extremely Satisfied) scale. Results based on 540 completed surveys. * Reverse scores so higher scores mean higher retention loyalty.
 Customers report higher advocacy and retention loyalty than
purchasing loyalty
Customer Loyalty
Advocacy
Loyalty
Purchasing
Loyalty
Retention
Loyalty

0
1
2
3
4
5
6
7
8
9
10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Ease of doing
business
Overall Product
Quality
Responsiveness to
Service Needs
Responsiveness to
Technical Problems
Ability to Resolve
Technical Problems
Communications
from the Company
Future
Product/Company
Direction
Average
Ratings of 9 or 10 Ratings of 6-8 Ratings of 0-5 Average
Ratings are on a 0 (Extremely Dissatisfied) to 10 (Extremely Satisfied) scale. Results based on 257 completed surveys.
 Around 70-80% of customers are satisfied with the customer
experience
 Except for Communication and Future Product/Company Direction
Customer Experience

Examine each business area’s
performance and impact on
loyalty simultaneously.
1. Key Drivers – Invest in areas
to increase Customer
Loyalty.
2. Hidden Drivers – Use
features in marketing to
grow customer base.
3. Visible Drivers – Consider
features in marketing to
grow customer base.
4. Weak Drivers – Monitor as
lowest priority for
investment.
Driver Matrix

 Predicting Advocacy Loyalty
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
5.25 5.75 6.25 6.75 7.25 7.75
ImpactonAdvocacyLoyalty
(correlationbetweenbusinessattributes
andAdvocacyLoyaltyIndex)
Performance on Business Attribute
(Customer Rating)
Advocacy Loyalty Index is the average of the following four questions (Overall, Satisfaction, Recommend, Select vendor again, Continue using).
To improve advocacy
loyalty, you may consider
focusing on following
areas:
1. Overall Product
Quality
Driver Matrix: Improvement Areas

 Predicting Advocacy Loyalty
To focus marketing
message, you may
consider leveraging
following areas:
1. Ease of doing
business
2. Responsiveness to
technical problems
service needs
4. Ability to resolve
technical problems0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.85
5.25 5.75 6.25 6.75 7.25 7.75
ImpactonAdvocacyLoyalty
andAdvocacyLoyaltyIndex)
(Customer Rating)
Advocacy Loyalty Index is the average of the following four questions (Overall, Satisfaction, Recommend, Select vendor again, Continue using).
Driver Matrix: Marketing Messages

Business Attribute
Performance1
(Average
Rating)
Impact2 on
Advocacy
Loyalty
Ease of doing business 6.90 .72
Overall Product Quality 6.65 .83
Responsiveness to Service Needs 7.08 .62
Responsiveness to Technical Problems 7.19 .62
Ability to Resolve Technical Problems 7.03 .59
Communications from the Company 6.68 .64
Future Product/Company Direction 5.69 .64
ImproveLeverage Consider
1 Performance of each attribute is the average rating for each attribute across all respondents. Possible scores range from 0 (Extremely Dissatisfied)
to 10 (Extremely Satisfied); 2 Impact is the correlation between specific Business Attribute sand Advocacy Loyalty Index.
 Improving Advocacy Loyalty
Improving and Marketing ACME

 Predicting Purchasing Loyalty
Purchasing Loyalty Index is the average of the following two questions (Purchase different or new, Expand usage).
0.20
0.25
0.30
0.35
0.40
0.45
0.50
5.25 5.75 6.25 6.75 7.25 7.75
ImpactonPurchasingLoyalty
andPurchasingLoyaltyIndex)
(Customer Rating)
To improve purchasing
areas:
1. Communications from
the Company
2. Overall Product
Quality
3. Future Product/
Company Direction

 Predicting Purchasing Loyalty
To focus marketing
message, you may consider
leveraging following areas:
1. Ability to resolve
technical problems
Technical Problems
3. Ease of doing business
Service Needs
0.20
0.25
0.30
0.35
0.40
0.45
0.50
5.25 5.75 6.25 6.75 7.25 7.75
ImpactonPurchasingLoyalty
andPurchasingLoyaltyIndex)
(Customer Rating)
Purchasing Loyalty Index is the average of the following two questions (Purchase different or new, Expand usage).

Business Attribute
Performance1
(Average
Rating)
Impact2 on
Purchasing
Loyalty
to 10 (Extremely Satisfied); 2 Impact is the correlation between specific Business Attribute sand Purchasing Loyalty Index.
 Improving Purchasing Loyalty

 Predicting Retention Loyalty
To improve retention
areas:
1. Overall Product
Quality
2. Future Product/
Company Direction
Retention Loyalty Index is the average of the following question (Stop using)
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
5.25 5.75 6.25 6.75 7.25 7.75
ImpactonRetentionLoyalty
andRetentionLoyaltyIndex)
(Customer Rating)

To focus marketing
message, you may consider
leveraging following areas:
1. Ability to Resolve
Technical Problems
Technical Problems
Service Needs
4. Ease of doing business
 Predicting Retention Loyalty
Retention Loyalty Index is the average of the following question (Stop using)
0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
5.25 5.75 6.25 6.75 7.25 7.75
ImpactonRetentionLoyalty
andRetentionLoyaltyIndex)
(Customer Rating)

to 10 (Extremely Satisfied); 2 Impact is the correlation between specific Business Attribute sand Customer Loyalty.
 Improving Retention Loyalty
Business Attribute
Performance1
(Average
Rating)
Impact2 on
Retention
Loyalty

Loyalty Impacts Expected Revenue
 Revenue growth through word-of-mouth
(new customers)
 $272,500.001
 Revenue at risk due to churn
 $448,000.002
 Revenue growth through up/cross-sell
(existing customers)
 $168,000.003
1 Expected revenue from new customers is based on 14.2% of customers recommending ACME, on average, to 7.5 friends/colleagues and a
conversion rate of 2% with an annual average revenue per new customer of $10,000.
2 Expected annual revenue loss is based on 2.8% estimated churn rate and an annual average revenue per customer of $40,000.
3 Expected annual revenue growth from current customers is based on a 4.2% estimated up/cross-sell rate and an annual up/cross-sell
estimate of $10,000.

Impact of Improvement Efforts
 Improvements start with key drivers of customer
loyalty
 Product Quality, Future Product/ACME Direction, ACME
Communication
 Large ROI and net revenue is expected if company
improves future product/company direction
Product Quality
Future Product/
ACME Direction
Communication
from ACME
Saved/Additional Revenue $ (52,771.88) $263,624.35 $98,396.10
Cost to correct (goal of 0% dissat) $45,000.00 $50,000.00 $15,000.00
Net Revenue (Saved/Add Rev - Cost) $(97,771.88) $213,624.35 $83,396.10
ROI (Saved/Add Rev / Cost) -217% 427% 556%

1 Importance measured by correlation between business attribute and customer loyalty metric. Ranking conducted within a specific loyalty metric.
Drivers of Customer Loyalty
 Customer experience has a much greater impact on advocacy
loyalty than on purchasing or retention loyalty
.00
.10
.20
.30
.40
.50
.60
.70
.80
.90
Ease of doing
business
Overall Product
Quality
Responsiveness to
Service Needs
Responsiveness to
Technical
Problems
Ability to Resolve
Technical
Problems
Communications
from the Company
Future
Product/Company
Direction
ImpactonLoyaltyMetric
andloyaltymetric)
Advocacy Loyalty
Purchasing Loyalty
Retention Loyalty

Top Drivers of Loyalty
Business Attribute (BA)
Advocacy
Loyalty
Purchasing
Loyalty
Retention
Loyalty
Ease of doing business 2 6 5
Overall Product Quality 1 1 4
Responsiveness to Service Needs 5 7 6
Responsiveness to Technical Problems 5 4 3
Ability to Resolve Technical Problems 7 5 2
Communications from the Company 3 2 7
Future Product/Company Direction 4 3 1
1 Rank is based on correlation between business attribute and customer loyalty metric. Ranking conducted within a specific loyalty metric. Ranking of
1 indicates highest correlation between that business attribute and the measure of customer loyalty.
Top Drivers of Customer Loyalty
 Business attributes impact customer loyalty
components differently

Product Functionality
 About 40% of respondents indicated ACME products do not
have enough functionality
 About 14% indicated ACME products have too much
functionality
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
1 - Not enough
functionality
2 3 4 - Right amount
of functionality
5 6 7 - Too much
functionality
PercentofCustomers

Product Functionality
 Too little product functionality has a deleterious effect on key customer
metrics. Too much functionality does not adversely impact key customer
metrics
0
1
2
3
4
5
6
7
8
9
ALI PLI RLI Ease of doing
business
Overall Product
Quality
Responsiveness to
Service Needs
Responsiveness to
Technical Problems
Ability to Resolve
Technical Problems
Communications
from the Company
Future
Product/Company
Direction
Loyalty/Satisfaction
Not enough (ratings of 1-2)
Right amount (ratings of 3-5)
Too much (ratings of 6-7)
Product functionality measured on a 1-7 scale; where 1 = Not enough functionality; 4 = Right amount of functionality, 7 = Too much functionality.

Product Quality and Combinations
 Have enough data to assess three products
 Prod A, Prod B, and Prod C
 Prod C receives higher ratings than Prod A or Prod B
7.01
6.03
8.30
6.54
6.26
7.30
4.0
5.0
6.0
7.0
8.0
9.0
10.0
Product A
Only
Product B
Only
Product C
Only
Product A
with B
Product A
with C
Product B
with C
Satisfactionwith
ProductQuality

Competitors used by Customers
 Nearly half (49%) of ACME customers say they use
competitor’s products in their organization
0%
10%
20%
30%
40%
50%
60%
70%
80%
A B C D E F G H Other
PercentofCustomers1
Competitor
1 Percent based on only those respondents who indicated they use competitor’s products in their company.

ACME Compared to Competitors
6%
16%
37%
40%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Worse than allBetter than someAbout the same as othersBetter than mostBetter than all
What best describes our performance
compared to the competitors you use?
(0 + 400 + 1850 + 3000
+ 200) / 100 = 54.5
Percentile
Value
% of
Customers
0 6
25 16
50 37
75 40
100 2
ACME’s Percentile
Performance Rank
50% < 54%< 58%

Competitive Ranking Estimates
36%
50%
51%
52%
54%
55%
55%
56%
62%
0% 20% 40% 60% 80%
Competitor H*
Competitor G
Competitor F
Competitor E
ALL COMPETITORS
Competitor D
Competitor C
Competitor B
Competitor A
Customer Estimate of ACME’s Percentile Rank
ACME’s percentile
ranking is not adversely
impacted by presence
of most competitors –
ACME’s ranking is
comparable to most
competitors.
Competitor H’s
presence in ACME’s
Accounts has significant
negative impact on
customers’ perception
of ACME’s
performance.
ACME’s Percentile Rank
when competitors are present
* Statistically significant difference between ACME customers who are using Competitor H and those who are not using Competitor H.

Advocacy Loyalty Benchmarks (B2B)
0
1
2
3
4
5
6
7
8
9
10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Mean
Very Loyal (ratings of 9 or 10) Loyal (ratings of 6-8) Disloyal (ratings of 0-5) Mean
Overall
Satisfaction Recommend
Continue
Purchasing /
Using
Select Vendor
Again
Means not calculated for ACME C and E. Comp C
used a 1 to 6 satisfaction scale; 1-3 = Disloyal; 4-5 =
Loyal; 6 = Very loyal. Cascade Comp E used a 1 to 5
satisfaction scale; 1-3 = Disloyal; 4 = Loyal; 5 = Very
loyal. Oracle used a 1 to 10 satisfaction scale; 1-5 –
Disloyal; 6-8 = Loyal; 9-10 = Very loyal.
ACME provides consulting services, analytics solutions and customized products for financial companies.
Comp A provides solutions that help healthcare providers automate key business processes.
Comp B helps businesses monitor and optimize Storage Area Networks (SANs).
Comp C provides security and data protection solutions.
Comp D specializes in developing hardware systems and enterprise software products.
Comp E provides solutions for precision electrical measurement and test of advanced semiconductor devices.

Purchasing Loyalty
0
1
2
3
4
5
6
7
8
9
10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ACME Company A Company B
Mean
Purchase additional/different types of services
Comp B helps businesses monitor and optimize Storage Area Networks (SANs).

Retention Loyalty
*For this question, ratings are reverse coded to facilitate presentation: green indicates ratings of 0 thru 1 (highly unlikely to leave); yellow indicates
ratings of 2 thru 4 (unlikely to leave); red indicates ratings of 5 thru 10.
0
1
2
3
4
5
6
7
8
9
10
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
ACME Company A
Mean
Not Leave / Stop Using*

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

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