Derived importance is one of the many statistical analysis tools you can use in your market research. No one method generates all the answers and derived importance shouldn’t be used in isolation. But it’s a useful piece of a comprehensive market research strategy.
Derived importance analysis helps you really pinpoint what factors contribute the most to your clients’ overall satisfaction and loyalty.
What is derived importance in statistical analysis?
You need to know the main drivers of customer loyalty so you know what parts of the path to purchase need investment. Even with direct questioning, it’s tricky to uncover the underlying motivations behind customer satisfaction. Just because someone complains about a particular part of their customer experience, doesn’t mean that it has a huge impact on their overall loyalty. For example, they might find your website hard to navigate, but other factors are more important to them so they’ll be back to buy again.
You need to be able to weigh-up all the elements involved so you can see which drivers of customer satisfaction are the most important to your clients’ overall loyalty.
Derived importance analysis helps you correlate each part of the customer journey with overall satisfaction as part of your quantitative market research.
Benefits of derived importance
Derived importance research digs into the ‘why’ behind the basic ‘What’s important to you about our brand?’ It highlights trends of connections between individual aspects of your clients’ journey with your brand that would otherwise go undiscovered. People can’t always articulate their own whys, so identifying an audience segment’s shared opinion is an even bigger task.
The ultimate benefit of derived importance insights is that you have a deeper understanding of how your audience ticks. The results inform how to make best use of budget and resource limitations by clearly showing you what’s most important to your clients.
None of this information is arriving to you in a vacuum. You’ve already got a good idea of the strengths you’re going to maintain and areas you’d like to develop. Results from derived importance analysis help with prioritizing which to tackle first. And which factors you can move to the bottom of the list because they’re not that important to your clients in their overall experience.
Investment in a marketing research strategy that includes derived importance analysis helps you avoid unnecessary spend on things that don’t make an impact on overall client satisfaction and loyalty. It also informs your strategic thinking around directing resources to unexpected drivers of satisfaction that make a huge impact.
Derived Importance vs Stated Importance
Your NewtonX research strategy will include all the best methodologies to answer your questions. Derived importance and stated importance analysis are two different ways to discover what’s important to your clients and prospects. Both may have a place in your research strategy. The key is to choose the method that gives the most useful answers to your business questions.
Stated importance analysis is based on asking a simple, direct question: ‘How important is ‘x’ on a scale of 1-10?’
It gives quick, straightforward results that are easy to understand and disseminate across your organization. But the simplicity of the data is also its downside. You’re only getting a ‘first thought’ answer and there’s always the possibility of respondents exaggerating their opinion.
Just using stated importance statistics gives a 2-dimensional picture of what your clients think. You need to follow-up with other research methodologies to find out why they feel that way.
Derived importance analysis adds some of this depth of understanding by showing the correlation between these individual factors to overall customer satisfaction. It may even reveal previously hidden factors and trends that you can use to your advantage.
Measuring Derived Importance
To achieve useful results, you usually need a sample size of at least 100 respondents. A professional research partner will glean actionable insights from a smaller pool, if you have a niche audience.
Derived importance analysis starts by asking ‘How satisfied are you with ‘brand’? This gives you an overall satisfaction score on a monadic scale.
The second step in the derived importance process is to ask about specific elements of the respondents’ experience, using the same 0 – 10 scale. For example:
- How satisfied are you with the new feature?
- How satisfied are you with the price point?
- How satisfied are you with the invoicing process?
- How satisfied are you with our customer service?
The final part is the correlation analysis to measure the strength of the relationship between those individual elements and the overall satisfaction score. This results in each Independent factor benign assigned a score:
- 1 = total positive correlation
- 0 = no correlation
- -1 = total negative correlation
You can present this data in different ways, depending on how you’re sharing it within your organization. You can create a straightforward list of all the factors, in order of how much they drive overall satisfaction, with the most impactful at the top. Sometimes it’s useful to present the derived importance analysis findings as a quadrant chart that demonstrate how you’re going to implement subsequent action. This can be in terms of sorting the factors into ‘immediate priority’, ‘monitor’, ‘if we’ve got the budget’ and ‘strengths’.
Derived importance analysis helps you understand the nuances of what’s really important to your clients – beyond direct questioning. This means you can prioritize investment in areas of the customer experience that matter most to your audience. You maximize the impact of your spend because you’re focusing on the elements that are key drivers to overall customer satisfaction. You avoid spending on things that may seem important to your clients’ experience of the path to purchase, but actually don’t matter that much to their overall loyalty.
This has an impact across your organization, depending on the business questions you were asking. It can help you:
- Decide what new feature or product to develop next
- Investigate different price points
- Highlight areas for staff training
Insights from derived importance analysis help you see your strengths, show areas of improvement, and uncover new opportunities to strengthen your relationships with your client base.