A Scientific Approach to Increasing Repeat Business

Repeat business from loyal customers plays a vital role in the success of most businesses. Customers are much more likely to return to your business if they are satisfied customers. Some businesses rely on common sense when deciding what will lead to customer satisfaction. For example, it seems obvious that customers will want friendly, efficient, service. It seems logical that customers will want quality products and services at a good price. Right?

Throw common sense out the window.

The problem with the "common sense" approach is that common sense isn't as common as we think. Each person's "common" sense is based on his or her own personal experiences and each person's experience is extremely limited when you consider the diversity of human behavior. Common sense knowledge varies widely across groups of people due to cultural differences and differences in experience. Not only does behavior vary widely from one group of people to another, but behavior also differs in one person across situations. Let's look at how the variation in one person's behavior applies to customer behavior.

I can see these differences in my own consumer behavior. For example, when I am a customer at a fast food restaurant, I want fast, efficient service, especially if I am using the drive-thru. If the drive-thru has multiple windows, after placing my order at the first window I expect to see a bag of food dangling from an extended arm by the time I get to the second window. If it is not there, I wonder what the hold up is. Once I have the bag in my possession, I do a quick check of its contents to make sure I received everything I ordered and paid for. If I received the food quickly and the contents are correct, I am happy. I am less concerned with consistency in the quality of my purchase. Even if the temperature of the food is not perfect on some visits, but great on others, I am still highly likely to return to that fast food establishment if service is fast and accurate.

However, if I am patronizing a fine dining establishment, I am not concerned with speed. Instead I like to take my time and enjoy a leisurely meal while visiting with family or friends and I do not want the restaurant staff to make me feel rushed. I also care more about the friendliness of the staff and consistency in the quality of the food and service. Accuracy of my order is still important, but not a deal-breaker because I trust that if there is a problem it will be corrected to my satisfaction. The restaurant's atmosphere is also very important to me. I prefer a restaurant that is nicely decorated and has a cozy atmosphere. With the fast food restaurant, I am happy if it is clean, but the décor is not that important to me.

Since human behavior is diverse, relying on common sense will not serve you well in satisfying your customers and increasing their intent to return to your business. So where should you get information on how to please your customers?

From your customers.

Properly designed scientific research can give you insight into how your customers think. Surveys can reveal information about your customers' attitudes and perceptions. Specifically, you can learn what drives your customers' satisfaction and intent to return to your establishment. With this information, you can take action to influence your customers' behavior and perceptions in a positive way, thus increasing the likelihood they will return to your business. This information can be especially helpful with segments of your target market that, in general, may be less likely to return.

Take for example, the gaming industry. Many people gamble as a form of entertainment. There are many aspects of the gaming experience the person may enjoy but let's face it, nothing beats winning. Winning is a rewarding experience that, in and of itself, reinforces the behavior of gambling. Losing however is not reinforcing. Have you ever seen someone jumping up and down is a casino with a big smile on their face while screaming, "I lost! I lost!" That just doesn't happen. It is important to find other ways to make the gaming experience satisfying for these customers so that they will continue to return to that gaming establishment rather than going elsewhere.

Whatever type of business you operate, it is important to regularly survey your customers to learn what will keep them coming back to your business. What information, specifically, do you need to get from customers to accomplish this? The theory of planned behavior can help answer this question. Developed by psychologists Icek Ajzen and Martin Fishbein, the theory of planned behavior is a model used to predict deliberate behavior. According to this theory, the best predictor of a behavior is a person's intention to perform the behavior. This intention is determined by three things:

1. the person's attitude toward the specific behavior;
2. the person's subjective norms (person's beliefs about how other people they care about will view the behavior in question); and
3. the person's perceived behavioral control (the ease with which the person believes they can perform the behavior).

Thus, one of the most obvious questions to ask in a customer survey is a direct question about intention. We want to know the customer's intention to return to our business so we include a survey item which asks the customer to identify their level of agreement with this statement, "I will visit this business again." In addition, we will ask other questions that will help identify the customer's attitudes, beliefs, and perceptions about the business and their experience with it which influence intent to return. An organizational psychologist can develop scientifically sound survey items to address all of these factors.

An organizational psychologist can also use the customer survey results to identify the drivers of your customers' behaviors and identify exactly what items need to be addressed in order to increase intent to return. Sometimes organizations make the mistake of focusing only on the survey items that receive a low average score. This is a common sense approach. But just like relying on common sense to know what customers want, there is a problem with focusing only on the lowest scoring survey items to increase customer satisfaction and intent to return. What is the problem with this approach?

It is usually a complete waste of time.

Just because overall, customers rated a survey item poorly does not mean that improving their perceptions of that item(s) will increase their satisfaction or their intent to return. Those items may not be of great importance to your customers, even if your common sense tells you they should be very important. Organizational psychologists, using sophisticated statistical techniques, can analyze the relationships between every item on your customer survey. Based on this analysis they can identify just a few items that are driving (influencing) a large percentage of the other survey items. Specifically, the psychologist can identify the items that are driving customer satisfaction and intent to return. This takes the guesswork out of what a company should do once it receives the survey results. Only the drivers need to be addressed in order to influence customer behavior in a meaningful (profitable) way.

Let's look at an example of how scientific research was used to take the guesswork out of identifying the drivers of customer behavior in that difficult customer group mentioned earlier: gamblers who lose. Recently, the National Business Research Institute (NBRI) conducted an analysis on data collected from 50,000 customers of a gaming company. In the only analysis of its kind, NBRI identified the drivers that influence satisfaction and intent to return in two different types of casino customers: customers who lose while playing slots and pit customers who lose.

There are so many factors that can potentially influence a casino customer's experience that common sense leaves us completely in the dark when trying to determine the factors that make losing customers want to return to the casino. Utilizing scientific research however, the darkness quickly becomes light.

In the study conducted by NBRI, it was discovered that for slot losers, both overall satisfaction and intent to return were driven by the customers' perceptions of:

• the casino as a fun and exciting place; and
• the friendliness and helpfulness of the casino staff.

Intent to return for slot losers was also influenced by their perceptions regarding the wait time for casino cashiers.

Overall satisfaction was also influenced by customer perceptions of:

• the value of the players card reward program benefits; and
• how easy it is to obtain comps earned on the reward card program at another casino they play at. Thus revealing that it is vital to know how customers compare your business with other similar businesses.

For pit losers in this study both intent to return and overall satisfaction were driven by:

• customer perceptions of the casino restaurants.

Overall satisfaction was also influenced by:

• the quality of the food and beverages in the restaurants; and
• the wait time for service in the restaurants.

Knowledge of these drivers, obtained through scientific research, can be used by this casino chain to take actions that will increase customer satisfaction and intent to return in this difficult customer group. Of course, the target market for any business can be segmented in many different ways. Studying the intentions, perceptions and attitudes of various segments of your target market can give you information that, with proper action, will lead to more repeat business and increased profits. To learn more about how the National Business Research Institute can help you gain powerful knowledge about any segment of your target market, contact us at 1-800-756-6168.

Ken West, Ph.D.
Organizational Psychologist
National Business Research Institute, Inc.