June 2009

Using Text Analysis to Understand Key Drivers

Share of wallet is key metric for most businesses and grocery retailers are no exception.  We recently completed a national study of grocery customers to understand their relationship strength to grocery stores they shop at least occasionally (Please see earlier posts on some of those key findings).

Digging a bit deeper we found that having a "modern and inviting" store is a key driver of a strong customer relationship, which in turn (when measured by our Relationship Investment construct) is a strong predictor of behaviors such as share of wallet.

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Walmart Customer Relationship Map

This is a map based on a national sample of Walmart grocery customers (most buy other stuff too).  The two dimensions are latent constructs, funtional and personal, that are proven predictors of key behaviors - e.g. share of wallet, share of visits, store brand purchase.  The customers are mapped into this space using a clustering technique with the size of the circle representing the proportion of each group.

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Why Walmart is dead last on customer satisfaction and why it's irrelevant

 

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What Behavioral EconomicsTeaches Us About Selling Market Research Findings Internally

 
Behavioral economics is changing the way we think about why consumers do what they do and most importantly, how to bring about desired behaviors in a more consistent (albeit irrational) fashion.  In a nutshell, Behavioral economists think people, on average and in general are,
 
1)     Lazy
2)     Ignorant and,
3)     Heavily (and irrationally) biased towards the status quo.
 

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