Are you getting all you can from your customer satisfaction data?

Introducing:

ICSS

The Integrated Customer Satisfaction Systemfrom

Evaluating Customer Satisfaction Means Answering These Questions:

• What benefits are important to customers?

• How do you deliver on important benefits? How do your competitors?

• Does your brand have equity that goes beyond its performance? How about the competition?

• Do all customers want the same things? If not, who wants what?

• Do all customers see you and your customers the same way?

• How can you find customers with different needs?

Using a system of customer satisfaction techniques, ICSS can help you answer ALL

these questions….

And presents them in convenient spreadsheet form!

ICSS Analytic Techniques

• RenSat+ identifies what issues determine brand preference -- and how:– “Basic” needs that are costs of entry into the market– Key drivers with constant ROI– “Exciters” that can set a brand apart from the competition

• BEE (Brand Equity Estimate) shows whether your brand – or the competition – is more preferred than its performance would suggest (or less)

• Gap Analysis shows how your brand stacks up against the competition on each issue

• DRIVESEG Derived Importance Segmentation finds groups with different needs, expectations, and perceptions

• TARGET FINDER identifies needs groups for advertising and direct mail

How an ICSS Analysis is Conducted

Step 1: Determine the Variables

The most important step is the first – making sure you’re examining what’s important and actionable

• Dependent variable should be as closely related to consumer performance as possible (brand preference or choice)

• Predictor items should cover every relevant aspect of needs and expectations in category

We will work with you in developing a list of items to make sure you “cover the territory”

Step 2: Find the Underlying Benefit Factors

The most well thought-out set of items will not necessarily capture the way the consumer views the category– The items as asked are only approximate measures of

the way the consumer sees the brands

– Factor Analysis identifies the categories the consumer uses, and how they relate to the questions you asked

Factor Analysis of Benefit Items

ATTRIBUTE ITEMS SERVICE PRICE/ VALUEPRODUCT

AVAILABILITY CONVENIENCE TRUST

Responsive customer service 0.82 0.10 0.36 0.32 0.36Quick response time 0.78 0.26 0.38 0.21 0.24

Low price 0.12 0.75 0.19 0.09 0.12Good value for money 0.35 0.70 0.27 0.25 0.29Competitive price 0.20 0.66 0.09 0.14 0.13

Wide selection 0.05 0.21 0.72 0.36 0.14Brand I want available 0.22 0.20 0.61 0.34 0.22

Convenient locations 0.39 0.09 0.36 0.68 0.31

Name I trust 0.32 0.25 0.30 0.42 0.59

ATTRIBUTE FACTORS

The numbers show the relationship between the factors and the items. The higher the number, the more the item contributes to the factor’s meaning.

Step 3: RenSat+: Derive Importance of Factors

Factors are important to the extent they drive preference:• For instance, if the preferred brand is consistently rated

higher on value than the non-preferred brand, then value is important

• Drivers of preference can be very different from what consumers say is important

Step 3: RenSat+: Derive Importance of Factors

But all factors don’t influence preference in the same way:

•Traditional Key Drivers act in a straight-line fashion: the better your brand does on them, the more it’s preferred

•Basic factors are “costs of entry” into the market: a brand is rejected if it lags the competition, but isn’t necessarily preferred for doing better

•Exciters are “bonuses”: a brand is not penalized for not having them, but an advantage over the competition can translate into brand preference

PERFORMANCE

HighLow

PR

EF

ER

EN

CE

Low

Hig

h

Basic Feature

Exciter

Key Driver

EF

FE

CT

OF

PE

RF

OR

MA

NC

E F

AC

TO

RS

ON

PR

EF

ER

EN

CE

Step 3: RenSat+: Derive Importance of Factors

RenSat+ uses linear and non-linear regression techniques to:

•Identify what type of effect each factor has•Key Driver

•Basic

•Exciter

•Evaluate the importance of each factor•Expressed as a percentage of total influence on preference

Relative Derived Importance of Factors

TRUST58%

SERVICE26%

PRICE/VALUE8%

PRODUCT AVAILABILITY

3%CONVENIENCE

5%

Key Driver

Basic

Exciter

Tru

st is

th

e m

ost

po

we

rfu

l driv

er

by

far

Pro

du

ct A

vaila

bili

ty is

a b

asi

c co

st o

f e

ntr

y in

to t

he

ma

rke

t

Go

od

Se

rvic

e is

an

“E

xcite

r” t

ha

t ca

n d

istin

gu

ish

a b

ran

d f

rom

th

e c

om

pe

titio

n

Step 4: Evaluate Competitors on Important Benefits

Gap Analysis shows advantages and disadvantages of each brand at a glance• Listed in descending order of importance

• Shows where you’re strong and weak

• Shows your biggest threats and opportunities

•Brand A is the most trusted brand – the most important factor

•On Service, a competitive advantage, Brand A and Brand B compete for dominance.

•Product Availability is a “cost of entry”. Brand A is at parity with its competitors – and that’s enough (as long as another competitor with better distribution doesn’t come in!)

GAP ANALYSIS

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%T

RU

ST

PR

ICE

/ V

ALU

E

CO

NV

EN

IEN

CE

SE

RV

ICE

PR

OD

UC

TA

VA

ILA

BIL

ITY

KEY DRIVERS EXCITER BASIC

FACTORS

DE

RIV

ED

IM

PO

RT

AN

CE

(% o

f V

aria

nce

Exp

lain

ed)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Name I trust Low price

Good value formoney

Competitiveprice

Convenientlocations

Responsivecustomerservice

Quick responsetime Wide selection

Brand I wantavailable

Attributes

PE

RF

OR

MA

NC

E

(To

p 2

Bo

x %

)

LEVERAGE PREMIUM PENALTY Brand A Brand B Brand C

Step 5: Assess Brand Equity

Is a brand’s overall impression more than the sum of its parts? Is it less?• BEE (Brand Equity Estimator) uses the RenSat+

model to find out which brands do better (or worse) than their performance predicts

• Preference for each brand is predicted using the RenSat+ factors, then compared with actual preference levels

– Brands that exceed predicted levels have a positive brand equity: they outperform expectations

– Brands significantly lower than predicted levels have negative brand equity: they are less preferred than might be expected by their performance on attributes

Brand Equity Estimate

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Predicted Preference

Act

ual P

refe

renc

e

Underperforming

Outperforming Brand ABrand B

Brand C

Bra

nd

A, e

ven

thou

gh it

’s th

e ca

tego

ry le

ader

, und

erpe

rfor

ms

its

expe

ctat

ions

In c

ontr

ast,

Bra

nd

B h

as p

osit

ive

bran

d eq

uity

: it

’s m

ore

pref

erre

d th

an it

s pe

rfor

man

ce o

n at

trib

utes

pre

dict

s

Step 6:Find Derived Needs Segments

It’s important to know the needs and attitudes of the market as a whole – but that’s not the whole story

• Sometimes the total market’s opinion is only an average of two or more segments with contrasting needs and evaluations

• DRIVESEG, our unique Derived Importance Segmentation method, can find and identify those segments

•Segment I, the largest segment, values Trust and Service

•Segment II values Convenience and Availability

•Segment III is the Price/Value segment

Derived Importance by DRIVESEG Segment

0%

10%

20%

30%

40%

50%

60%

70%

80%

TRUST SERVICE PRICE/ VALUE CONVENIENCE PRODUCTAVAILABILITY

Attribute Factors

Imp

ort

ance

(S

har

e o

f D

eter

min

atio

n)

Segment I (58%) Segment II (26%) Segment III (26%)

Step 7:Analyze Brands By Segment

Customers form segments with unique sets of expectations. Do they also view the brands differently?• Repeating the Gap Analysis and BEE within each

DRIVESEG segment will answer that question

•Segment I, the largest, buys based on Trust and Service

•Brand A has Trust advantage

•Brand B has the advantage on Service, but Brand A can compete by improving response time

GAP ANALYSISSegment I

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

KEY DRIVER EXCITER BASIC INDIFFERENT

FACTORS

DE

RIV

ED

IM

PO

RT

AN

CE

(% o

f V

ari

an

ce E

xp

lain

ed

)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Name I trust

Responsivecustomerservice

Quickresponse

timeWide

selection

Brand Iwant

available Low priceGood valuefor money

Competitiveprice

Convenientlocations

Attributes

PE

RF

OR

MA

NC

E

(To

p 2

Bo

x %

)

LEVERAGE PREMIUM PENALTY Delivery - Brand A Delivery - Brand B Delivery - Brand C

•Segment II is the Convenience/Availability Segment

•Brand B has the advantage for Convenience

•Product Availability is seen as a parity benefit (which is all it needs to be); however, Brand A may have an out-of-stock problem

GAP ANALYSISSegment II

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

CO

NV

EN

IEN

CE

TR

US

T

PR

ICE

/ VA

LUE

SE

RV

ICE

PR

OD

UC

TA

VA

ILA

BIL

ITY

KEY DRIVERS EXCITER BASIC

FACTORS

DE

RIV

ED

IMP

OR

TA

NC

E(%

of

Var

ian

ce E

xpla

ined

)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Convenientlocations Name I trust Low price

Good value formoney

Competitiveprice

Responsivecustomer

service

Quickresponse

timeWide

selectionBrand I want

available

Attributes

PE

RF

OR

MA

NC

E

(To

p 2

Bo

x %

)

LEVERAGE PREMIUM PENALTY Brand A Brand B Brand C

•Segment III cares only about Price/Value

•For them, Brand C is the clear winner

GAP ANALYSIS:Segment III

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

PR

ICE

/ VA

LUE

CO

NV

EN

IEN

CE

TRU

ST

PR

OD

UC

TA

VA

ILA

BIL

ITY

SE

RV

ICE

KEY DRIVERS BASIC EXCITER

FACTORS

DE

RIV

ED

IMP

OR

TAN

CE

(% o

f Var

ianc

e E

xpla

ined

)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%Low price

Good valuefor money

Competitiveprice

Convenientlocations Name I trust

Wideselection

Brand Iwant

available

Responsivecustomerservice

Quickresponse

time

Attributes

PE

RFO

RM

AN

CE

(T

op 2

Box

%)

LEVERAGE PREMIUM PENALTY Brand A Brand B Brand C

Step 7:Analyze Brands by Segment

We can also apply Brand Equity Estimation within segments• Do brands appeal to (or repel) customers in a given

segment to a greater extent than their performance on attributes would suggest?

Brand Equity Estimate By Segment

-20%

-15%

-10%

-5%

0

5%

10%

15%

20%

Segment I Segment II Segment III

Bra

nd

Eq

uit

y (P

erce

nta

ge)

Brand A Brand B Brand C

• In

the

Tru

st/S

ervi

ce s

egm

ent (

Seg

men

t I),

Bra

nd B

out

perf

orm

s it

s at

trib

utes

• By

cont

rast

, Bra

nd A

doe

s co

nsid

erab

ly w

orse

am

ong

the

Con

veni

ence

seg

men

t tha

n it

s pe

rfor

man

ce s

ugge

sts

• And

, eve

n th

ough

Bra

nd C

is th

e “p

rice

bra

nd”,

it u

nder

perf

orm

s it

s at

trib

ute

rati

ngs

in th

e P

rice

seg

men

t

Summary:Segmented Gap and BEE Analysis

• If you’re Brand A, maintain availability and improve response time to leverage trust advantage and make inroads in the mainstream segment (Segment I)

• Brand B is a strong competitor on two fronts – it holds Segment II with its convenience advantage, and competes with Brand A in Segment I by superior service

• Brand C, the price brand, would have trouble breaking out of its niche in Segment III. Though Segment III consumers trust it, Segment I consumers, for whom Trust is most important, don’t. And even in Segment III, Brand C has little inherent equity; consumers choose it mainly because it’s cheap

Step 8:Identify and Target Needs Segments

Needs segments don’t do the marketer any good if they can’t be identified so that marketing messages can be addressed to them

• Target Finder identifies the demographic and behavioral groups in which each segment is most likely to be found– Finds compound definitions that can’t be identified “with the

naked eye”

TARGET FINDER RESULTS

TOTAL SAMPLE (100%)Segment I (48%)Segment II (26%)Segment III (26%)||--------------------------------------------------------------------------------| |Women (51%) Men (49%)Segment I (60%) Segment I (36%)Segment II (14%) Segment II (38%)Segment III (26%) Segment III (26%)| ||---------------------------------------- |----------------------------------------| | | |HHI Under $35K (35%) HHI $35K or Over (16%) No Children (25%) Have 1+ Children (24%)Segment I (55%) Segment I (71%) Segment I (27%) Segment I (45%)Segment II (10%) Segment II (23%) Segment II (54%) Segment II (21%)Segment III (35%) Segment III (6%) Segment III (19%) Segment III (33%)

TARGET FINDER SUMMARY

• Segment I is most likely to be found among women, particularly with household incomes over $35,000

• Segment II is most likely to be found among men, particularly those with no children

• Segment III is most likely to be found:– among women with household incomes under $35,000

– Among men with children

ADVANTAGES OF ICSS• Unified system maximizes the value of customer

satisfaction data– Modular – use the whole system, or conduct specific analyses

• Factor model allows discrimination among benefits– You can really tell which issues drive preference

• Derived Importance model avoids self-report bias– RenSat+ distinguishes types of influence

• DRIVESEG segmentation avoids marketing errors due to non-discrimination of subgroups

• TARGET FINDER increases actionability by making it easier to find segments

To discuss performing an ICSS analysis, contact Paul M. Gurwitz, Ph.D.

At (212) 319-1833

or by e-mail at:pgurwitz@renaiss.com