Understanding consumers | Consumer Satisfaction

Consumers are important to everything which we do, both in service and goods industries, as well as for profit and non-profit. Basically, consumers are people who seek your services, for a school, parents are consumers, for a religious organisation, the congregation are the consumers while for typical business, consumers are the lifeline. For government or other non-profit organisations, people who seek services from us are basically consumers. For this series to make sense, the first question would be “Who is your consumer?”.

A common quote is “If you don't appreciate your customers, someone else will ~ Jason Langella” Consumer satisfaction is defined as a measurement that determines how a product or service meets consumer expectations. An extension is to this metric is another Customer Long-Term Value (CLTV) which will be discussed in another series.

Satisfaction Analysis

Structural Equation Modelling (SEM) is family of models which draws its power from the ability to model complex multivariate relationships on observed (measurable such as height, weight, time) and latent (Inferred / cannot be measured directly such as intelligence, Anxiety, quality of life, business confidence, happiness, morale etc.). The underlying statistical method used in this analysis is the Partial Least Squares Path Modelling (PLS-PM), which seeks to create an optimal predictive relationship as opposed to causal mechanism, hence facilitating a predictive-relevance orientation discovery process to the statistical testing of causal hypothesis.

To create consumer satisfaction score, several questions are formulated to measure a common theme, for example, to measure image as a latent variable, the measurable variables which can be rated on a score of 1 to 10, or 1 to 100 would be product X is one the best in the market, Product x truly lives to its values, its market communication can be trusted, it contributes to the society, its innovative and forward looking e.t.c.