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The Importance of “Importance”

Posted on May 12, 2010 , by Steve Bernstein
CATEGORIES: Loyalty Research News

It’s such a simple word – we all know what “important” means – but when it comes to prioritization most of us seem to suffer from, “Everything’s important!”  Take customer feedback.  Many companies ask their customers to tell them how important something is in order to help prioritize improvement initiatives.  But does this work?
 A recent McKinsey article shows once again that “stated importance” – asking customers to tell you what’s important to them – doesn’t help you in the prioritization effort: 

“We found a big difference between what customers said was important and what actually drove their behavior. Customers insisted price was the dominant factor that influenced their opinion of a supplier’s performance and, as a result, their purchasing decisions. Yet when we examined what actually determined how customers rated a vendor’s overall performance, the most important factors were product or service features and the overall sales experience.”

Prioritization Matrix

It’s critical to prioritize the right areas that will maximize loyalty at the lowest cost. Make sure to think “outside in” – what’s really important to the customer that will result in increased revenues?

 As another example, what’s the most important thing about airline travel?  If prompted, most people would say that safety is their #1 priority.  But I think Rainman is the only person I know that actually makes his flying decisions based on this attribute.
 As the folks from McKinsey show, it’s critical to derive importance.  Correlation isn’t always enough: discovering which attributes are most directly tied to customer success is a good first step.   But if you are making investments in the enterprise it’s important to prioritize optimally, given both hard dollars and opportunity cost if you start going down the wrong route.  Regression techniques can show you the way, especially when linked to financial outcomes that can predict the benefit side of a change in business process.
 OK, so I digressed in this post since the essence of the McKinsey article is on customer experience, not on “stated vs. derived importance.”  I’d like to get back to that point, where we can discuss the strategic nature of proper account management.  In the meantime I’d love to hear your thoughts.