COMPETITIVE ANALYTICS THAT DRIVE CUSTOMER LOYALTY
Bob E. Hayes, PhDBusiness Over Broadway
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Overview
Competitive Analytics and Benchmarking
Percentile Rank
Using only your customer survey to benchmark your performance against your competitors
How can we use competitive benchmarking to drive improvement?
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Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Benchmarking
Understand where you fit in the mix of competitors Understand relative performance
Set standards of performance and identify best practices Among competitors
Across customer segments
Percentile rank is the key metric Helps you clarify the interpretation of raw scores (in
the context of your competitors)
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Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Percentile Rank of a Score
Percentage of scores in the frequency distribution that are the same or lower than it
If your score is at the 60th percentile, that means your score is higher than 60% of other scores
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Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Distribution Properties
Percentile rank tells us our relative performance
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50% 84%16% 98%2%.1% 99.9%
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Example 1
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Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Estimating Percentile Ranking
1. Include competitive question(s) in survey
How do our products compare with the alternatives?
2. Assign percentile valuesto response options
3. Calculate average across respondents
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Response Options
Value
Much worse 0
Somewhat worse 25
About the same 50
Somewhat better 75
Much better 100
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Competitive Ranking Estimates
2%
7%
19%
34%
39%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Much worse Somewhat worse
About the same
Somewhat better
Much better
Pe
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of
Re
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How do our products compare with the alternatives?
(0 + 175 + 950 +2550 +3900) / 100 = 75.75
Percentile Value
% of Customers
0 2
25 7
50 19
75 34
100 39
Company’s Product Ranking
71% < 76% < 79%
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Customer Experience Performance
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Business Attributes % Positive1
Impact on Loyalty2
Understands Needs .91 0.44Addresses Needs .89 0.48
Understands Better Than Competitors .86 0.52Security Effectiveness .96 0.65
Reporting .88 0.54Management / Administration .89 0.67
Documentation .88 0.54Ease of Installation .89 0.56
End User Experience .90 0.66Ease of Upgrade .90 0.59
Technical Support .91 0.66Price .92 0.47
Tech Support via Telephone .90 0.63Tech Support via Email .90 0.64
Tech Support via Web Knowledgebase .83 0.55Compare COMPANY Products to Alternatives .73 0.77
1 Performance of each attribute is the percent of positive responses 2 Impact is the correlation between specific Business Attribute sand Customer Loyalty Index.
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Driver Matrix
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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.
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Driver Matrix
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Customer Loyalty Index is the average of the following four questions (Overall, Satisfaction, Quality, Value, Recommend,).
Just looking at the business attributes, there is no clear key driver of customer loyalty.
0.40
0.45
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.60 0.70 0.80 0.90 1.00
Imp
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Performance on Business Attribute(Percent Positive Responses)
To improve customer loyalty, best bet would be to focus on competitive benchmarking
0.40
0.45
0.50
0.55
0.60
0.65
0.70
0.75
0.80
0.60 0.70 0.80 0.90 1.00
Imp
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Performance on Business Attribute(Percent Positive Responses)
Comparative question
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Example 2
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Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Estimating Percentile Ranking
1. Include competitive question(s) in survey
What competing products do you use? What best describes our performance
compared to the competitors you use?
2. Assign percentile valuesto response options
3. Calculate average across respondents
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Response Options
Value
Worse than all 0
Worse than some 25
About the same 50
Better than some 75
Better than all 100
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Competitive Ranking Estimates
6%
16%
37%40%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Worse than all
Worse than some
About the same
Better than some
Better than all
Pe
rce
nt
of
Re
spo
nd
en
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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
Company’s Performance Ranking
50% < 54% < 58%
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Competitive Ranking Estimates
Company’s percentile ranking is not adversely impacted by presence of most competitors –Company’s ranking is comparable to most competitors.
Competitor H’s presence in Company’s Accounts has significant negative impact on customers’ perception of Company’s performance.
Company’s Percentile Rankwhen competitors are present
* Statistically significant difference between Company’s customers who are using Competitor H and those who are not using Competitor H.
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
Final Thoughts
Simple / Repeatable process See changes in your competitive ranking over time
Are percentile rank estimates related to actual percentile rankings? Validation study to be completed in two months
Sales and Marketing When customers’ perceptions do not
match reality
Branding comparing your customers who use
competitors and those who do not
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Customer’s Percentile Rank Estimate
low medium highR
eal P
erce
ntile R
ank
high
Customers rankyou lower than actual ranking
Match
medium Match
low MatchCustomers rankyou higher than actual ranking
Copyright © 2011 Business Over Broadway · Bob E. Hayes, PhD · [email protected] · www.businessoverbroadway.com
For More Information
Bob E. Hayes, Ph.D.
Email: [email protected]
Web: www.businessoverbroadway.com
Blog: www.businessoverbroadway.com/blog
Twitter: www.twitter.com/bobehayes