How good should an airline meal be? If customer satisfaction
is the goal, the answer is “very good.” The fact is, airline
customers often criticize meals in customer satisfaction questionnaires.
But if your goal is to compete profitably and retain loyal customers,
the answer to the question is subtly different, according to recent studies
by Mercer Management Consulting.
According to Mercer, customers buy airline tickets,
not meals. Tickets give them a bundle of service features: in-flight movies,
check-in service, cabin service, food, seating and timely arrival. Some
of these features influence a customer’s choice of airline much
more than others. Simon Glynn, a Mercer vice president based in London
and author of the commentary, poses the question: “If providing
a better meal has little effect on whether a customer will purchase again
from the airline, what is the return on investing in better food?”
According to Glynn, many businesses’ products
function much like airline tickets — bundles of features, some more
influential than others. Supermarkets bundle product quality with choice,
checkout speed and special offers. Mobile networks bundle network performance
with credit checking, activation, billing and customer care.
Glynn says that the complexity of these bundled purchases
can give managers an opportunity for cost savings if they can identify
the features to cut back without affecting customer behavior. But removing
the wrong piece could bring down the whole structure. “The key to
keeping the customer profitably satisfied is to understand the subtleties
of how a customer’s satisfaction with each feature influences his
or her purchase behavior,” Glynn observes. “Most customer
satisfaction programs don’t focus on that,” he says, adding
that “they monitor an aggregate customer satisfaction index that
is well regarded when it goes up, but when the satisfaction index goes
down, few clues are offered about what actions a company should take.”
If a company is to understand how to redirect its investment
to increase repurchase, it needs to look beyond the satisfaction index
and create a clear picture of the crucial features that drive satisfaction.
Often, companies already have all the data they need to see this picture,
he says.
According to Glynn, most companies maintain regular
customer satisfaction questionnaires, which they use operationally, reflecting
how a company typically works in distinct functions. Mercer reports that
one major airline had been doing this for years, surveying customers’
satisfaction and carving up the responses so that the seating people tracked
satisfaction with seats, the catering people tracked satisfaction with
food and so on. “The airline was missing the valuable but hidden
insights about what drives satisfaction and a customer’s intent
to repurchase,” Glynn says.
Analyzing the raw data, the airline found it could quantify
how important customers’ stated satisfaction with each feature is
in influencing their overall intent to repurchase. For the first time,
it could identify in which areas incremental investment would have the
biggest business impact and shift investment accordingly.
Glynn points out that traditional customer satisfaction
approaches often focus on levers that are easy to measure, like price
and product choice. He suggests that understanding the drivers of customer
satisfaction allows businesses to trade off investment in these levers
against investment in less tangible customer perceptions, such as product
quality and customer service. Analyses like the aforementioned conducted
in several industries have justified big increases in customer service
training, which offers high returns that could not previously be quantified.
“Once you know how good an airline meal should
be, or for how long you should ask customers to queue for a supermarket
check-out, you can set resource levels accordingly, shifting spending
from lower- to higher-impact activities,” Glynn concludes.
Simon Glynn can be reached at Mercer’s London
office (011-44-20-7-915-9229) or by e- mail at simon.glynn@mercermc.com.
Visit Mercer Management Consulting at http://www.mercermc.com.
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