Editor’s note: Christopher Ratcliff is vice president of research and technology, and Elizabeth Horn is senior research analyst, at Service Strategies International, Inc., a Dallas marketing consulting firm.
All customers are not created equal. If customer satisfaction and loyalty measurement programs are based on the "average" customer, one cannot expect to achieve anything more than average results. So in this age of celebrating diversity, why do most programs insist on treating all customers the same?
Customers are asked to rate various attributes, and then the data is evaluated on limited demographic information. When considering more sophisticated methodologies and analyses, many argue that it is too expensive. While everyone knows that satisfaction and loyalty measurement programs are important for a progressive corporation, costs must be kept to a minimum. Financial constraints, however, do not have to restrict the ability to achieve truly outstanding results.
Instead of measuring performance among all customer constituencies, the focus should be on customers who maximize the company’s financial return. Customer attitudes and values must also be included in satisfaction research - especially in this era of growing diversity.
Marketing and research efforts that focus solely on changing customer behavior miss the mark. Behavior is the direct result of values/beliefs and attitudes. To truly understand why customers are purchasing the products (their behavior), a close examination of who they are (their attitudes and values) becomes necessary. (See graphic.) When attitude, value, and behavior segments are identified, satisfaction and loyalty programs can be optimized. This will ensure that customers’ basic needs and wants are met - in a way that is individualized to each of the identified segments.
Figure 1 illustrates the results of an attitudinal, value, and behavioral segmentation. In this example, different types of heavy users of a theater chain have been categorized as having attitudes and values falling into three distinct segments. The heavy users are vastly different from each other, even though they all have one behavior in common - frequently going to the movies. If satisfaction strategies are based on meeting the needs and wants of only one type of customer, satisfaction among the other segments cannot be assured.
Different heavy users have varying attitudes and values that drive them to purchase a particular product or service. For example, action/adventure movie-goers (Group 1) tend to be single males between 14 and 35 years old who can be classified as adventure-seeking, high-tech and computer literate. The variety segment (Group 3) includes both male and female, non-age-specific individuals who tend to be college educated or above, and are open to new ideas. Even though the demographics of the heavy users in both of these groups differ greatly, they have similar expectations when they choose a theater to attend. However, their expectations are not the same as those of the predominately female, idealistic romantic/drama movie patrons in Group 2. Likewise, it is unrealistic to expect that all heavy users of any company or product would be looking for the same features and/or services to increase their satisfaction.
Analyzing satisfaction via a value segmentation approach allows strategic allocation of resources, and increases operational efficiencies. This segmentation approach leads to a satisfaction system that addresses the unique needs and wants of different types of customers.
This type of examination will allow the development of an optimal satisfaction program that will not only retain customers, but can also increase the products and/or services that they purchase. In addition, it provides the company with a focal point from which to increase the revenue potential from different types of customers.
In the past, customer satisfaction programs have been a cost of doing business. Because a successful satisfaction program can now be a contributor to corporate revenue, cost issues that once confined programs to a limited view of "average" customers are no longer necessary. Ultimately, value segmentation provides a more complete picture of the customer, thus allowing companies to form lasting and profitable relationships.