Customer Loyalty Analysis

8/11/2019 Customer Loyalty Analysis

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"Customer service is a series of activitiesdesigned to enhance the level of

customer satisfaction that is, the feelingthat a product or service has met thecustomer expectation."

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For every customer complaint, there are 26other customers who have remained silentSource: Lee Resource Inc

It takes 12 positive service experiences tomake up for one negative experienceSource: Understanding Customers by Ruby Newell -Legner

Happy customers who get their issueresolved tell about 4 to 6 people about theirexperience.Source: White House Office of Consumer Affairs, Washington, DC


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Personal Service Industries Intangible purchases ExperiencesExamples: business and personal

Temp Agencies Dry Cleaning Tax Preparation Hair/Nail services Landscaping Gyms


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No customers, no businessno business, noprofit!Service industry businesses sustain throughthe satisfaction of their customersThe top three drivers for investing in

customer experience management are:1. Improve customer retention (42 %)2. Improve customer satisfaction (33 %)3. Increase cross-selling and up-selling (32 %)Source: Aberdeen report Customer Experience Management: Engaging Loyal Customers to Evangelize Your Brand


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It is important to not only gain newcustomers, but to retain them

Profitability of customer retention higherprofit margins


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Do customers switch service

providers to avoid having to beopen and honest about bad

situations?


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1. What factors affect a consumers desire to beopen and honest after a negative experience?

H01: The perception of intimacy a consumerhas with his/her service provider has no effector a negative effect on their willingness to beopen after a negative service experience

HA1: A consumer who has an intimaterelationship with his/her service provider has ismore likely to be open after a negative serviceexperience.


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2. What factors affect the perception consumershave about their relationship with their serviceprovider?

H02: The frequency in which a consumer

receives a service has no effect or a negativeeffect on the perception of intimacy he/shehas with their service provider.

HA2: Consumers who receive a servicefrequently are more likely to develop aperception of intimacy with their serviceprovider.


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3. What are the driving forces of a consumer givingfeedback?

H03: The perception that a consumer has abouta service being a reflection of who they are hasno effect or a negative effect on their willingnessto complain after a bad service experience.

HA3: Consumer who feel a service is a reflectionof who they are, are more likely to complainafter a bad service experience.

H04: Customers satisfaction with a service has

no effect or negative effect on their opennesswith his/her service provider.

HA4: Customers satisfaction with a service has apositive effect with their openness with his/herservice provider


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4. What factors impact how a consumer reactsto a negative service experience?

H05: The perception a consumer has that aservice provider does not want to know their

opinion has no effect or a negative effecton their willingness to switch serviceproviders after a bad experience.

HA5: When consumers feel their serviceprovider do not want to know their opinions,they are more likely to switch serviceproviders after a bad experience.


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Survey 10 questions 25 respondents

Sent via GoogleDocs

In-depth Interviews 10 questions 5 stylists


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Driving forces of customer retentionReasons behind switching service

providers


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Age range 24-50

8 Males and 17 females

Atlanta area


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The average number of repeatcustomers was 82%All of the respondents would fix right

away and the customer was likely toreturn3 respondents salons had standardrecovery plans

Additional service/reimbursement Week Adjustment Policy Free service by higher level stylist


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When asked about a difficult experiencewith a client, most respondentsmentioned miscommunication or lackof shared opinions

All respondents mentioned when bothparties worked together to achieve astyle, the satisfaction rate was higher4 out 5 respondents managementencouraged personal relationships withtheir clients


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Linear RegressionChi Square

Content AnalysisProportionsSummary Statistics


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H01: The perception of intimacy aconsumer has with his/her serviceprovider has no effect or a negativeeffect on their willingness to be openafter a negative service experience.

HA1: A consumer who has an intimaterelationship with his/her service provideris more likely to be open after a negative

service experience.


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Linear Regression

Regression Statistics

R 0.40228

R Square 0.16183

Adjusted R Square

0.15709

S 1.73501

Total number of observations 179

open = 3.5719 + 0.4379 * intimate

ANOVA

d.f. SS MS F p-level

Regression 1. 102.87094 102.87094 34.17343 0.

Residual 177. 532.81621 3.01026

Total 178. 635.68715

Coefficients Standard Error t Stat p-level H0 (5%) rejected?

Intercept 3.57192 0.23944 14.91749 0.E+0 Yes

intimate 0.43789 0.07491 5.8458 0. Yes

T (5%) 1.97346


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H05: The perception a consumer has that aservice provider does not want to knowtheir opinion has no effect or a negativeeffect on their willingness to switch serviceproviders after a bad experience.

HA5: When consumers feel their serviceprovider do not want to know their opinions,they are more likely to switch serviceproviders after a bad experience.


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Linear Regression

Regression Statistics

R 0.53426

R Square 0.28543

Adjusted R Square 0.2814

S 1.77922

Total number of observations 179

considernew = 2.4527 + 0.5862 * dontwanttoknow

ANOVA

d.f. SS MS F p-level

Regression 1. 223.81924 223.81924 70.70312 1.34337E-14

Residual 177. 560.31484 3.16562

Total 178. 784.13408

Coefficients Standard Error t Stat p-level H0 (5%) rejected?

Intercept 2.45275 0.28357 8.64964 3.10862E-15 Yes

dontwanttoknow 0.58625 0.06972 8.40851 1.34337E-14 Yes

T (5%) 1.97346


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Standard Service Recovery ProtocolProviders should leverage relationship

with customer to promote openness andintimacy One size fits one

Providers must immediately correct apoor service to earn a customers loyalty Invest in training practices


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Customer Loyalty Analysis

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