Tool 52: Customer Acquisition-Defection Matrix

AKA

N/A

Classification

Analyzing/Trending (AT)

Tool description

The customer acquisition-defection matrix is a very useful tool to gauge customer brand loyalty, to track competitors' market share, and to identify trends in customer needs, expectations, or behavior.

Typical application

• To identify customer product purchase flows among different product brand names in comparison to the company's existing market share.

• To plot market share data of previous product purchase percentage to new product purchase percentage.

• To measure percent change in product demand; to track customer defection rates.

• To develop a benchmarking plan for targeting the strongest competitors.

Problem-solving phase

→	Select and define problem or opportunity
→	Identify and analyze causes or potential change
	Develop and plan possible solutions or change
→	Implement and evaluate solution or change
→	Measure and report solution or change results
	Recognize and reward team efforts

Typically used by

4	Research/statistics
	Creativity/innovation
5	Engineering
	Project management
	Manufacturing
3	Marketing/sales
	Administration/documentation
	Servicing/support
2	Customer/quality metrics
1	Change management

links to other tools

before

• Data Collection Strategy

• Measurement Matrix

• Interview Technique

• Surveying

• Questionnaires

after

• Customer Satisfaction Analysis (CSA)

• Customer-First-Questions (CFQ)

• Benchmarking

• Failure Mode Effect Analysis

• Countermeasures Matrix

Notes and key points

• The data collection process should include the search and verification of secondary data, such as market share studies, company annual reports, trendlines, or any other summarized customer behavior information.

Step-by-step procedure

• STEP 1 The first step requires an extensive and highly focused data collection on the product under analysis. Market share data, customer buying behavior, and market/technology trends need to be examined.

• STEP 2 Product-specific data such as previous ownership percentage, repurchase percentage, and competitors' gain/loss percentages are collected.

• STEP 3 A customer acquisition-defection matrix is constructed and percentages listed in the appropriate squares associated with particular brand names. See example Purchase of Home Water Heaters.

  • Brand A is the company's location on the matrix. It shows that 42 percent of Brand A customers purchased another Brand A home water heater from this company, 10 percent purchased Brand B, 7 percent purchased Brand C, etc.

  • Referring to Brand B on the matrix, 45 percent of all Brand B heater customers repurchased a Brand B heater, 9 percent purchased a Brand A heater, 8 percent purchased a Brand F heater, and so on.

• STEP 4 Next, total all row percentages for each brand and indicate this total in the percentage column.

• STEP 5 Lastly, check all plotted data and calculations, and date the matrix.

Example of tool application

Purchase of Home Water Heaters