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There is a frightening disconnect between measured satisfaction
and customer loyalty. For many years, senior living managers have
performed customer satisfaction surveys to measure how happy various
customers and consumers are with their communities. These surveys
have taken many forms, but the results have been remarkably similar
- customers and consumers seem quite satisfied, or happy. Another
fact, however, is that satisfied customers are not predictably loyal
- too often they walk away to another senior living community. Why?
And if happy customers walk away, why bother trying to find out
if they're happy in the first place?
Three theories may explain this situation:
- Customers of high vulnerability services (such as senior housing)
don't tell the truth about their level of satisfaction;
- Satisfaction and loyalty are not correlated in the markets for
these services;
- Service dissatisfaction is not the only reason for disloyalty.
There is good evidence that each of these provide at least part
of the explanation, and can be helpful in guiding what to measure
and how.
Regarding surveyed persons telling the truth, little can be done,
although there is some evidence that having an outside person, vendor
or agency perform the measurement is useful. Surveyors often must
work harder to obtain negative responses through one-on-one interviews,
for example. What is clear, however, is that the survey respondents
who provide negative responses are offering the surveyor precious
information. It is my experience that negative responses are too
frequently either dismissed with a roll of the eyes, or rationalized
away to the margins. It is human nature to take pride in, and therefore
be defensive about, our work, but this human quality does not serve
the management of senior living communities in this circumstance.
There is far better news, however with regard to the connection
between perceived satisfaction and loyalty. While these two variables
- satisfaction and loyalty - seem to float as independent of each
other, there is a derived variable that has been shown to correlate
with loyalty, and even predict it. This is perceived value. Here's
how it works.
Residents of senior living communities and their families assign
relative importance to certain features of the community and compare
their perceptions to alternatives. This occurs more often as they
become less satisfied. If dissatisfaction with a particular feature,
which is sufficiently important, becomes very high, the motivation
to embrace an alternative becomes very strong. The key over-riding
variable in this dissatisfaction dynamic appears to be relative
value for the price paid. In other words, a small decrease in satisfaction
with food, for example, will be much more important if the price
being paid is seen as high. We have all said publicly or privately,
"Considering how much this costs, the "___" should
be much better!" And on the other hand, we have all endured
poor service and tolerated, or even accepted it by saying, "Well,
it's not bad, considering the price." The customers of senior
living communities, and indeed all of us, use value maps to assess
the fairness of our exchanges.
Model Value Map
The relative importance placed on features and price change with
time. Of importance to measure, therefore, on a regular basis, are
the relative satisfaction with, and the perceived value of, a communities'
services. How can we do this?
Fist we have to measure the relative importance our customers place
on the services provided.
Looking at the initial decision to move into a senior living community,
the buying decision is shared among family members (shoppers), and
that the shoppers consider 3 - 4 communities. How do they compare
the communities? By their perceptions of the communities, weighted
by the importance they place on each community feature. In other
words, each prospect views each community through a certain type
of camera lens.
In the table below, the relative importance of several service
areas are displayed, as well as the satisfaction ratings for the
Golden Days Senior Community (our subject), and 3 alternative communities.
Model Satisfaction Profile
If management were to consider satisfaction ratings only, attention
would be focused on several areas with the lowest ratings, i.e.,
Food, Security, Health & Wellness and Price. The Ratio, which
is the ratings of Golden Days divided by the average of alternatives
(competitors), tells a different story. The Ratio shows that Golden
Days is most vulnerable to its competitors in the area of Security.
Wherever the Importance is high and the Ratio low, Golden Days is
vulnerable. The converse is also true: wherever Importance is high
and the Ratio is high, Golden Days has a leverageable competitive
advantage. A Ratio of 1.00 means that Golden Days is at parity,
in a competitive sense, with the rated competitors. In this example,
Golden Days' pricing is a competitive advantage due to the Apartments,
Maintenance / Housekeeping, and Price. The model Satisfaction Profile
offers a far richer array of comparisons and insights than satisfaction
ratings alone.
Conclusion
Shoppers for, and consumers of, high vulnerability services evaluate
these services in a highly comparative manner. Perceived satisfaction
alone does not predict buying behavior or loyalty. By asking shoppers
and customers to make comparisons of competitive positions in both
service areas and price, it is possible to create a far more useful
and predictive model.
Irving Stackpole is
the Principal of Stackpole & Associates, a research, training
and consulting organization serving senior living and health care
clients, located in Boston. (617) 367-1868
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