Decisions Based On Science

Optimization

Statistical Modelling

Data Mining

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Dataset contains characteristics of the problem,

the rep, and the client.

How might customers’ perception of priceimpact customer loyalty?

First we build a model to understand how customers’ perception of price and overall customer satisfaction predict loyalty.

Customer Loyalty (in years and

months)

Customer Satisfaction

Customer Perception of

Price (somewhat high versus priced fair)

How might customers’ perception of priceimpact customer loyalty?

We use regression procedures to determine how important both perception of price and customer satisfaction predict customer loyalty.

Customer Loyalty (in years and

months)

Customer Satisfaction

Customer Perception of

Price (somewhat high versus priced fair)

We use regression procedures to determine how important both perception of price and client satisfaction predict customer loyalty with the company.

How might customers’ perception of price

impact customer loyalty?

Customer satisfaction explains almost 50% of the client’s loyalty to the company, while customer perceptions of price only about 4.4%.

49%

4.4%

How might customers’ perception of priceimpact customer loyalty?

Customer Satisfaction

Customer Perception of

Price (somewhat high versus priced fair)

Customer Loyalty (in years and

months)

These results suggest that overall, the clients’ satisfaction with the company is the primary engine driving customer loyalty.

Customers seem to be satisfied with the company for reasons beyond just how they perceive the price of the product.

In fact, perceptions of price does not seem to be the major factor in promoting customer loyalty.

But might there be subgroups of customers who show a different pattern?

How might customers’ perception of priceimpact customer loyalty?

Cluster Analysis to Examine Subgroups of Customers

Cluster analysis used to determine whether or not there are distinct subgroups of clients.

The first cluster shows that those who consider price to be very reasonable also show the highest satisfaction and loyalty to the company.

The last cluster shows that there are customers who are very loyal to the company despite also viewing the price of the product as being somewhat high.

Cluster Analysis to Examine Subgroups of Customers

In fact, over 22 thousand (or about 46% of surveyed customers) were highly satisfied and highly loyal despite considering the price of the product somewhat high.

Conclusions and Further Directions

Clearly customer satisfaction is an important component of loyalty to the company.

Two unexpected but useful findings for further exploration.

First customers’ perceptions of price were not nearly as important as customer satisfaction in determining customer loyalty.

Almost half of the survey respondents were highly satisfied even when they considered price to be somewhat high.

Further data mining needed to determine what factors predict customer satisfaction and loyalty.

Business Intelligence

We use advanced tools and technologies to provide analytical power that requires expertise and experience to deliver.

Probability and Statistics – data mining to find valuable connections and insights, test conclusions, and make reliable decisions. Expertise in Regression Analysis, Cluster Analysis,

Multivariate Statistics, and Hierarchical Linear Modeling.

Optimization – understanding which factors best predict the intended outcome by narrowing your choices to the very best when there are virtually innumerable feasible options.

Simulation – giving you the ability to try out approaches and test ideas for improvement. 11