From Voice of Customer to Customer Loyalty
JMP Statistical Discovery Software
Essentially, our business is about making maps," says Rob Reul from Isometric Solutions of Minneapolis. "If point A is where your business is today, and point B is where you'd like your business to be in, say, two years, Isometric Solutions helps you determine the surest, most direct course to that destination."
That course should be determined by what customers like about a product or service. But how does Isometric Solutions find those sweet spots?
That's where voice of customer (VOC) research comes into play. "If you can hear your customers, you can see your future," Reul says. Gathering the right information and then acting decisively on that information is critical to success. To meet these objectives, Isometric employs JMP statistical discovery software from SAS to visualize and uncover data patterns.
JMP helps Reul's team understand the rich data found within the extensive VOC research it conducts as part of Six Sigma efforts on behalf of its clients. The team uses JMP's analytics and interactive visualization techniques to help clients learn what drives their customers to them and away from competitors.
Reul provides a simple framework: "Ask the right questions the right way to the right people. Next, really analyze the results to determine patterns and trends that are significant. Present the analysis to the client in a graphical way so that they can digest and critique it. Then align the organization around what they've learned so that they can digest it, own it, and act on it.
"You can't do it all," Reul adds. "You have to pick your shots. We're using JMP's analytics and interactive graphics to do the discovery work--to be able to pick those shots."
Reul recently consulted with a large office-supply company seeking to increase market share. He identified two essential questions in phase 1 of the project: • What is the fundamental value of loyalty? • How much greater is your penetration of a market if you are your customer's top supplier?
For this phase, Reul and his team analyzed more than 2 million customer records. They used JMP to determine the different tendencies of low- and high-volume customers. They found that if their client is the customer's top supplier, the client gets 63 percent of the customer's business. If Reul's client isn't the top supplier, that share is 23 percent.
Clearly, loyalty matters. Isometric Solutions found that this particular office supplier was the preferred supplier for approximately 45 percent of its customers. Analyzing the data with JMP, Reul learned that if the client became the preferred supplier for 50 percent of its customers, a mere 5-percent shift, nearly $65 million in revenues could be gained.
In phase 2, Reul and his team attempted to determine what drives loyalty. They created a performance-attributes key--convenience, value, discounts, and rewards--then constructed questions to survey the customers to determine which of these attributes matter most.
"JMP was key here, too," says Reul. "The statistical workbench becomes the basis for all our interrogation as we mine for those performance attributes most strongly associated with a mindset and buying pattern of loyalty."
Phase 2 was an analysis of the specific attributes likely to change preference. Reul says that he needed software to help isolate the most important loyalty drivers.
The team used several graphical analytic capabilities in JMP to interpret the survey results and root out relationships--model creation using the categorical platform, the recursive partitioning platform, JMP's data-mining and interactive data-filtering techniques, and mosaic plots.
Reul discovered that two variables were most important. First, nearly all top suppliers are vulnerable to a competitor with lower prices and, second, that convenient store locations are the next-strongest incentive to change suppliers.
The team drilled into the data to identify three key traits that customers associate with convenience: • Location near a main thoroughfare or frontage road but without a lot of traffic congestion • Sufficient close parking • Good signage, store organization, and customer service so that customers can quickly locate what they need
"With JMP," concludes Reul, "we were able, with great confidence and agility, to navigate through large amounts of information and come up with some clearly decisive options for our clients to pursue."
What's next? Isometric Solutions will start delving into the most efficient and cost-effective options for improving convenience. It will examine a service related to both convenience and price that emerged during its analysis--online shopping. Most large and loyal customers shop in a store, but are starting to look for the ability to order online, though they're concerned about shipping costs. "We also will look at price sensitivity, particularly as it relates to the new service--online shopping," says Reul.
JMP Statistical Discovery Software
- Fast, comprehensive, highly visual analytics
- Interactive data filtering to subset data
- Updates analyses and graphs instantaneously
- Models and analyzes all types of survey-response data
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