competitive analytics that drive customer...

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?

2


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)

3


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

4


Distribution Properties

Percentile rank tells us our relative performance

5

50% 84%16% 98%2%.1% 99.9%


Example 1

6


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

7

Response Options

Value

Much worse 0

Somewhat worse 25

About the same 50

Somewhat better 75

Much better 100


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

rce

nt

of

Re

spo

nd

en

ts

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%


Customer Experience Performance

9

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.


Driver Matrix

10

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

11

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

act

on

Cu

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ss a

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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

act

on

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Performance on Business Attribute(Percent Positive Responses)

Comparative question


Example 2

12


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

13

Response Options

Value

Worse than all 0

Worse than some 25

About the same 50

Better than some 75

Better than all 100



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

ts

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%



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.


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

16

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


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

mailto:[email protected]

http://www.businessoverbroadway.com/

http://www.businessoverbroadway.com/blog

http://www.twitter.com/bobehayes

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