Linkage Analysis in Customer Feedback Programs

LINKAGE ANALYSIS IN CUSTOMER
FEEDBACK PROGRAMS

Bob E. Hayes, PhD
Business 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


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


Adoption Rate across Program Components
Adoption Rate
∆ in
Customer Feedback Loyalty Loyalty
Adoption
Program Component Leaders1 Laggards
Rate

Strategy/Governance 89% 71% 18%
Business Process
Integration
86% 59% 27%
Method 72% 60% 12%

Reporting 70% 60% 10%

Applied Research 80% 51% 31%


Linkage Studies Improve Customer Loyalty
Industry percentile ranking
Adopted of customer loyalty
40 50 60 70 80
Not Adopted

Statistical relationships are established
1. between customer feedback data and…
Operational linkage
established
Applied research using customer feedback
2. Applied research regularly
data is regularly conducted.
conducted
3. between customer feedback data and…
Constituency attitude
linkage established
Existing information from customer
databases is used to help segment…

between customer feedback data and…


Data Silos
 Data management problem

Operational Customer
Metrics Feedback Financial
1. Call handling time 1. Customer Loyalty
2. Number of calls until 2. Relationship
resolution satisfaction 1. Revenue
3. Response time 3. Transaction satisfaction 2. Number of products
purchased
3. Customer tenure
Employee 4. Service contract
Partner Feedback renewal
Feedback 5. Number of sales
1. Partner Loyalty 1. Employee Loyalty transactions
2. Satisfaction with 2. Satisfaction with 6. Frequency of
partnering relationship business areas purchases


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

Types of Linkages
Customer Feedback Data Sources
Relationship Transaction
(satisfaction with specific
(satisfaction/loyalty to company)
transaction/interaction)
•Link data at customer level
Business 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

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

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.


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

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)


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.


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


Results
 Identify customer-centric metrics

Total Time to Resolve SR Initial Response Time
Customer 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


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

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.


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


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

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


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


Linkage Analysis in Customer Feedback Programs

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