Categories
Linkage analysis measures the impact of customer satisfaction on the bottom line. By linking satisfaction survey information with customer behavior, it is possible to validate the benefits of measuring and managing satisfaction. Linkage analysis also guides the allocation of resources.
The cornerstone of a successful business (or non-profit) is customer loyalty. Loyalty can be defined by many factors, all measurable in a survey, including: satisfaction, perceived value, future purchase/renewal intent, and advocacy (e.g., net promoter score). Many organizations, including Rockbridge clients, invest substantially in measuring loyalty and in making improvements in services based on customer feedback.
As management invests in surveying customers and acting on the information, questions arise as to the economic benefits to the organization. Questions management may ask include:
Linkage analysis answers these questions by correlating customer satisfaction survey data with customer behavior. It involves a form of “quasi-experiment” that tracks customer behavior into the future after satisfaction is measured.
This kind of analysis involves a series of steps:
A linkage analysis is used to answer key questions that management has about their efforts to improve customer satisfaction. The most profound finding is whether a statistically significant linkage actually exists. Showing that there is a positive relationship is critical in building support for efforts to improve quality. Another finding is the actual dollar gain in profit from improving quality. By comparing this with investments made to improve quality, management can gauge whether it is worthwhile to invest in the customer experience or to use the investments elsewhere.
A linkage analysis also helps identify the kinds of investments to make. A common output for a linkage analysis is a planning spreadsheet that allows managers to input hypothetical assumptions about investment costs and improvements in specific areas to determine the ROI. If the investments are high and the returns minimal, the model will show that it is better to invest in a different area of customer satisfaction or in a different part of the organization altogether.
Linkage analysis is a valuable task that brings reality into the satisfaction measurement process. It provides reassurance to the organization that its emphasis on the customer contributes positively to the bottom line. And, it provides the basis for making smarter decisions about investments in quality improvement.
For more information, contact Gina Woodall, SVP at 703-757-5213 ext. 11 or [email protected], or Charles Colby, President, at 703.757.5213 ext. 12 or [email protected].
This content was provided by Rockbridge Associates. Visit their website at www.rockresearch.com.
Sign Up for
Updates
Get content that matters, written by top insights industry experts, delivered right to your inbox.