Cornell Study Describes Method to Reveal Drivers of Customers' Choices

• 
  SAVE
• 
  SHARE
• 
  TEXT SIZE
• 
  PRINT
• 
  COMMENT
• 
  PDF

. October 14, 2008

ITHACA, NY, Janaury 16, 2007. Hotel and restaurant operators have long wanted to know exactly what aspects of their products and services cause their customers to make a purchase. Although traditional surveys and focus groups give some indications, a most useful method for uncovering what determines a guest's purchase is known as customer choice modeling. A new report from the Cornell Center for Hospitality Research explains how this method, known as CCM, can focus on the specific drivers of a customer's purchase.

In the report, "Unlocking the Secrets of Customers' Choices," author Rohit Verma summarizes the results of numerous studies that have found out what specific aspects of a service cause a customer to make a purchase, or what bundle of attributes are most attractive to a particular customer. The report and companion interactive spreadsheet template are available at no charge from the Center, at http://www.hotelschool.cornell.edu/chr/research/centerreports.html.

An associate professor at the Cornell School of Hotel Administration, Verma explains the three-step CCA approach. "First, we use well-known tools to identify the relevant drivers of buying decisions, including customer interviews and focus groups," he said. "But next we go beyond those information-gathering steps and compile the most important of those drivers into choice sets of service offerings. Then we ask customers to compare those choice sets in a controlled experiment, conducted in the form of multimedia surveys, so that we can identify the real purchase drivers." Verma added that the final step is to identify the key customer-choice patterns using statistical modeling so that managers can adjust their operations to fit their customers' choice drivers.

Verma notes that CCM approach can be used to assess the desirability of service features and customers' willingness to pay for those features for specific market segments. Not only will that allow managers to configure their services for different market segments, but it will allow marketers to promote specific products and services to a given market segment. Although the Center Report gives examples from food service and hotel operations, the CCM methodology applies to any type of business. Furthermore, the CCM approach can also be used to assess customers^aEURTM relative propensity to choose a specific service concept, the level of brand equity, and the extent of customers^aEURTM switching inertia, as well as calculate market share for various service offerings.

About The Center for Hospitality Research

A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the Center's 55 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The Center also publishes the award-winning hospitality journal, the Cornell Hotel and Restaurant Administration Quarterly. To learn more about CHR and its projects, visit www.chr.cornell.edu.