Category Archives: Marketing Research

Measuring Distributor / Agent Loyalty in Service Businesses

Analytical Culture, Brand Management, Customer Experience, DataBase Marketing, Driller Q & A, Marketing / Tech Interface, Marketing Research, Marketing thru Operations, Measuring Engagement

Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)

Topic Overview

Hi again folks, Jim Novo here.

Today we have a fellow Driller looking to compare the “loyalty” of sales / distribution agents for insurance products and use this information to manage business with the agents more effectively. In this case, knowledge of the business is exceedingly important because segmentation of business lines across regions will dramatically improve predictions.

Let’s do some Drillin’!

Q: Hi Jim,

I happened upon your site and found the information there very valuable – so much so that I ordered your book (customer is referring to Drilling Down).

A: Well, thank you very much for that!

Q: I’m a marketing manager with an insurance company that distributes its life, auto, home, and business insurance products through independent insurance agents.  These agents represent our company as well as others.

I’m interested in techniques for measuring agent loyalty – which I think would be demonstrated by the agents choosing to place business with our company instead of another company they represent for policies.

A: I’m not sure in this case anything is too terribly different from the scenarios used in the book. Essentially, agents or consumers demonstrate loyalty though their actions, and if you can track their actions, you can spot increasing or decreasing loyalty.  Your business is more complex in many ways than retail, but to the consumer (in your case agent), there are always choices to be made between alternatives, and changes in the purchase patterns agents or consumers generate often precede customer defection.

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Do NPS / CES Feedback Metrics Predict Retention? Depends…

Analytics Education, Customer Experience, DataBase Marketing, Marketing Research, Marketing thru Operations
Survey Says?

Several questions came in on the ability of surveys to predict actual behavior, covered in the post Measuring the $$ Value of Customer Experience (see 2. Data with Surveys). My advice is this: if you are interested in taking action on survey results, make sure to survey specific visitors / people with known behavior if possible, then track subjects over time to see if there is a linkage between survey response and actual behavior.  You should do this at least the first time out for any new type of survey you launch.

Why?  Many times, you will find segments don’t behave as they say they will.  In fact, I have seen quite a few cases where people do the opposite of what was implied from the survey.  This happens particularly frequently with best customers – the specific people you most want to please with modifications to product or process.   So this is important stuff.

You’ve Got Data!

Turns out there’s a new academic (meaning no ax to grind) research study out addressing this area, and it’s especially interesting because the topic of study is ability of customer feedback metrics to predict customer retention.  You know, Net Promoter Score, Customer Effort Score and so forth, as well as standard customer satisfaction efforts like top-2-box.

The authors find the ability of any of one of these metrics to predict customer retention varies dramatically by industry.  In other words, you might want to verify the approach / metric you are using by tying survey response to actual retention behavior over time.

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Adoption and Abandonment

DataBase Marketing, Marketing Research, Measuring Engagement, Web Analytics

Out of the Wharton School we have a nice piece of behavioral research on the effect speed of Adoption has on longer-term commitment.  The article, The Long-term Downside of Overnight Success, describes research finding “the adoption velocity has a negative effect on the cumulative number of adopters”. 

This research dovetails nicely with a lot of the topics discussed here on the blog lately, so I thought I’d use it (with a nod to Godin’s post on Strategy vs. Tactics today) to provide some fodder for thought.

First, the importance of Psychology in Marketing.  So many of the “discoveries” arrived at through  brute force testing of Online Advertising are already well known in the greater discipline of Marketing through Psychology.  For more on this read “The Other 3P’s” and if you’d like to do something about lack of knowledge in this area, make sure to read this comment on source books.

Second, this research is a great example of isolating the true drivers of behavior.  The idea of looking at baby names to isolate the real behavior from “technology and other commercial effects” while including “symbolic meaning about identity” results in a broad, Strategic-level answer to the question, not a Tactical one. 

Why is this important?  It means the results can be applied across a host of different Marketing situations, rather than only a specific one. 

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