How A Loyalty Metric Was Inspired By Sports Analytics

Our Fan Value Score metric was inspired by the Plus/Minus hockey statistic which measures the performance of a team broken down by individual player contribution.

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Here's the story... Years ago, we spent a lot of time consulting for consumer packaged goods companies on their product lines. A couple of the research techniques we used were TURF and Shapley value analysis. Goals of these techniques are to figure out which combinations of products in a line- like flavors for an ice cream company, for instance, would attract the most customers.

So one evening after work back in the day, over a few adult beverages- and while a hockey game was playing on a nearby tv, a few of us got into a discussion about how these research techniques might be applied in another area of our business - guest and customer satisfaction measurement. We arrived at the idea that the customers of a business, or the guests of a hotel or restaurant could be looked at like we looked at the flavors of an ice cream company OR the way each hockey player is looked at as contributing to their team through a statistic called their plus/minus number. For example, a player with a Plus 2 rating means that while he (or she) is on the ice, his or her team has scored 2 more goals than the opposing team. The plus/minus calculation is looked at both on an individual game basis, and in aggregate over the course of a season.And so, on that night our Fan Value Score was born. The idea being that based on how a guest or customer viewed their experience at, say a hotel, we could translate that into a score that would help determine how that experience -and consequently the guest- could impact the hotel's success, going forward.From the hockey plus/minus stat, the simple polarity of a positive or negative score appealed to our sensibility and so we did a lot of math with all of the customer and guest satisfaction data we had collected over the years and came up with the algorithm. It's pretty simple: each guest's viewpoint of their experience earns a score from +2 (best) to -2 (worst).

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‍So what specific future impacts on the hotel or business are we looking at?

‍Well, on the positive side, the guest who expressed that they had a positive experience might return over and over, as well as tell their friends and relatives, write great reviews online, and post nice things on their social media accounts.And on the negative side, a guest that had a negative experience wouldn't likely come back, and might also tell their friends and relatives, and possibly post not so nice things in reviews and on social media.

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‍2 useful ways for businesses to look at their Fan Value Scores

‍On a macro level, businesses can look at Fan Value Scores over time periods. If, say the average Fan Value Score is trending down, or down in a specific time period, or repeatedly on a certain day of the week for instance, it could possibly be highlighting a personnel or other operational issues.

On a micro level, the Fan Value Score assigned to each guest is, in essence, a predictive loyalty segmentation. As such, our clients can make marketing offers to guests based on their Score. For example aggressive offers can be made to neutral FVS guests to try to entice a return visit and attractive deals may be offered  to high FVS guests to cultivate brand allegiance.