Journal of Business Research 60 (2007) 115 121

Importance values for ImportancePerformance Analysis: A formula for

spreading out values derived from preference rankings
Javier Abalo a,, Jess Varela a , Vicente Manzano b
a
University of Santiago de Compostela, Spain
b
University of Sevilla, Spain

Abstract

ImportancePerformance Analysis (IPA) is a simple and useful technique for identifying those attributes of a product or service that are most in
need of improvement or that are candidates for possible cost-saving conditions without significant detriment to overall quality. To this end, a two-
dimensional IPA grid displayed the results of the evaluation about importance and performance of each relevant attribute. This paper shows that
ordinal preferences are better than metric measures of the importance dimension and proposes a formula to transform the ordinal measure into a
new metric scale adapted to the IPA grid. This formula makes allowances for the total number of features considered, the number of rankings, and
the reported orders of preference.
2006 Elsevier Inc. All rights reserved.

Keywords: ImportancePerformance Analysis; Importance measurement; Ordinal data; Multiattribute evaluation

1. Introduction performance of each attribute. The key objective of IPA is

Since the 1950s, the majority of both decision-making
(Churchman and Ackoff, 1954; Edwards, 1954; Tversky, 1969)
and attitude models (Fishbein, 1963; Fishbein and Ajzen, 1975;
Rosenberg, 1956) have included stimuli among the key
attributes for study in order to obtain an overall evaluation of
these topics. This approach is implicit in conjoint measurement
techniques (Green and Rao, 1971; Luce and Tuckey, 1964;
Varela and Braa, 1996) and is explicit in complex models of
consumer satisfaction (LaTour and Peat, 1979; Oliver, 1993;
Spreng et al., 1996; Tse and Wilton, 1988; Wilkie and
Pessemier, 1973) and perceived service quality (Cronin and
Taylor, 1992, 1994; Parasuraman et al., 1985, 1988).
Developing this idea, Martilla and James (1977) devised
ImportancePerformance Analysis (IPA) as a simple graph-
ical tool to further the development of effective marketing
strategies based on judgments of the importance and
Corresponding author. Facultad de Psicologa, Campus Sur s/n, 15782,
Santiago de Compostela, Spain. Tel.: +34 981563100x13706; fax: +34
981528071.
E-mail addresses: mtjavi@usc.es (J. Abalo), mtsuso@usc.es (J. Varela),
vmanzano@us.es (V. Manzano).
0148-2963/$ - see front matter 2006 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2006.10.009
diagnostic in nature: this technique aims to facilitate
identification of attributes for which, given their importance,
the product or service underperforms or overperforms. To this
end, the importance measure represents the vertical axis, and
the performance measure constitutes the horizontal axis of a
two-dimensional graph. These two axes divide the IPA grid
into four quadrants where every attribute shows up according
its mean rating on importance and performance scales. In the
original version of IPA, the appearance of an attribute in the
top left quadrant of the grid is indicative of underperformance,
and its appearance in the bottom right quadrant is indicative of
overperformance. Product or service improvement efforts
should focus on attributes in the former situation, while
attributes in the latter situation are candidates for possible
cost-cutting strategies (Fig. 1). Therefore, Importance
Performance Analysis provides a useful and easily under-
standable guide for identifying the most crucial product or
service attributes in terms of their need for managerial action,
as a means to develop successful marketing programs to
achieve advantage over competitors.
Originally devised with marketing uses in mind, the
application of IPA extends to a wide range of fields, including
health service provision (Abalo et al., 2006; Dolinsky, 1991;
116 J. Abalo et al. / Journal of Business Research 60 (2007) 115121
Fig. 1. The original partition of the IPA grid in areas with distinct implications
for product or service development (after Martilla and James, 1977).
Dolinsky and Caputo, 1991; Hawes and Rao, 1985; Yavas and
Shemwell, 2001), education (Alberty and Mihalik, 1989; Ford
et al., 1999; Nale et al., 2000; Ortinau et al., 1989), industry
(Hansen and Bush, 1999; Matzler et al., 2004; Sampson and
Showalter, 1999), internal marketing (Novatorov, 1997), service
quality (Ennew et al., 1993; Matzler et al., 2003) or tourism
(Duke and Persia, 1996; Evans and Chon, 1989; Hollenhorst
et al., 1992; Hudson et al., 2004; Picn et al., 2001; Uysal et al.,
1991; Zhang and Chow, 2004). However, difficulties in its
application soon became apparent and have prompted IPA
versions that generally differ from Martilla and James' original
version in one, or both, of the two ways: 1) the grid partition
into areas with distinct significance for decision-makers; and 2)
the measurement of both importance and performance, the
former especially.
2. Alternative IPA representations
Among the alternative partitions of the IPA grid (reviewed
by Abalo et al., 2006; Bacon, 2003; or Oh, 2001), the most
interesting are those that highlight the difference between
importance and performance ratings by means of an upward
diagonal line that represents points where ratings of impor-
tance and performance are exactly equal; this iso-rating line
divides the graph in two great areas (Abalo et al., 2006; Bacon,
2003; Hawes and Rao, 1985; Nale et al., 2000; Picn et al.,
2001; Sampson and Showalter, 1999; Slack, 1994). This paper
follows Abalo et al. (2006) in using a partition that combines
the quadrant and diagonal-based schemes, enlarging the top
left quadrant of the original MartillaJames partition so the
new area occupies the whole of the zone above the diagonal on
which importance is equal to performance (Fig. 2). With this
partition, any attribute with an importance rating greater than
the corresponding performance rating is a candidate for
improvement efforts. Moreover, the greater discrepancy
between the importance and the performance for an attribute,
the greater the need for remedial action, because of the
assumption that a larger discrepancy causes greater dissatis-
faction (Sethna, 1982). The interpretation of the areas below
the diagonal is the same as in the original MartillaJames
diagram.
3. Importance measures
The second major difficulty facing IPA, and the focus of
this paper, is the measurement of importance and performance.
In this regard, performance has generally been less contro-
versial than importance: the usual measurement procedure has
been to take the mean of the performance ratings obtained
from an appropriate group of people by means of a metric or
Likert scale. However, a variety of means exist to perform
importance measurement. In particular, two quite different
kinds of measure are common in IPA applications: 1) direct
measures based on Likert scale, k-point scale or metric ratings
obtained in the same way as for performance; and 2) indirect
measures obtained from the performance ratings, either by
multivariate regression of an overall product or service rating
on the ratings given to the individual attributes (Danaher and
Mattsson, 1994; Dolinsky, 1991; Neslin, 1981; Taylor, 1997;
Wittink and Bayer, 1994) or by means of conjoint analysis
techniques (Danaher, 1997; DeSarbo et al., 1994; Ostrom and
Iacobucci, 1995).
Although a recent review of these methods (Bacon, 2003)
supports earlier studies (e.g. Alpert, 1971; Heeler et al., 1979)
in finding that direct measures capture the importance of
attributes better than indirect measures, the former have serious
drawbacks. In particular, Bacon (2003) himself emphasizes
that direct importance assessment is often misleading because
ratings are uniformly high. The main source of this problem is
inherent to Martilla and James' procedure, in which the first
step should be to identify the most salient attributes of a product
or service by qualitative studies (focus groups and/or
unstructured personal interviews) or by reviewing previous
research. This procedure has a natural tendency to record high
importance ratings on a metric or Likert scale for all the
attributes selected for evaluation, with the result that they all
crowd together at the top of the IPA grid. This defeats the
purpose of the exercise, since the objective of the IPA diagram
is not to act simply as a record of absolute importance and
performance values, but to discriminate among attributes as
Fig. 2. The partition of the IPA grid used in this paper (after Abalo et al., 2006).
 J. Abalo et al. / Journal of Business Research 60 (2007) 115121
targets for improvement action. Other factors that several
studies pointed to as contributory causes of the crowding
phenomenon include respondents' lack of involvement (Bacon,
2003) and their possible lack of expertise regarding the product
or service assessed (Sambonmatsu et al., 2003). However, the
main cause is the use of measures of absolute rather than
relative (competitive) importance.
The development of indirect measures of importance helps to
circumvent the above problems. Among these indirect mea-
sures, standardized regression coefficients obtained by multi-
variate regression of the attributes performance ratings over the
overall performance rating given to the product or service. This
is intrinsically a measure of relative importance in that each
regression coefficient depends on data for all the attributes. This
is, in fact, a more realistic conception of human reasoning and
psychology of choice (Edwards, 1954; Tversky and Kahneman,
1981). This method has the further advantage of reducing the
demands on the rater's attention (since only the performance
scale is available, not importance), which may favor increased
rater involvement. However, this approach also has at least one
major weakness: the possibility of collinearity (Danaher, 1997;
Bacon, 2003). Collinearity among the attribute performances
when used as predictors of overall performance can lead to the
precision of the regression coefficients being so poor that they
fail to discriminate reliably among the attributes (and can even
take on negative values).
A second criticism of linear regression coefficients as
importance measures is that the relationship between the overall
performance of a product and its performance with respect to its
individual attributes may well be nonlinear (Danaher, 1997).
Specifically, some research reports that the negative effect of
below-average attribute performance on the overall product rating
is greater than the positive effect of above-average attribute
performance (Mittal et al., 1998; Sethna, 1982). Generalization of
the regression coefficient approach to this situation would mean
fitting a response surface to the performance data and using partial
derivatives as local measures of importance. Although in some
situations this procedure might provide the decision-maker with
useful information, this procedure seems unlikely to be generally
applicable.
Another major group of indirect importance measures
comprises those derived by conjoint analysis. This approach
has the advantage over multiple regression of using orthogonal
designs, which excludes the possibility of collinearity between
attribute partial utilities. Furthermore, the use of several levels
for each attribute lessens the risk of difficulties due to non-
linear dependence of overall performance on attribute
performances. However, conjoint analysis requires quite an
onerous data collection process and becomes unfeasible when
involving more than a very few attributes, both of which are
especially serious drawbacks for the application of IPA to
services.
Partial correlation or logistic regression methods have
difficulties similar to those of the above approaches to
importance measurement, or they have equally negative
consequences (Crompton and Duray, 1985; Danaher and
Mattsson, 1994; Heeler et al., 1979; Jaccard et al., 1986).
117
Moreover, the various measures proposed generally disagree
with each other (Alpert, 1971; Bacon, 2003; Crompton and
Duray, 1985; Heeler et al., 1979; Jaccard et al., 1986; Matzler
et al., 2003; Oh, 2001), so the interpretation of IPA differs
according to the chosen importance measure. Thus, the
decision-maker has little way of knowing a priori which
measure, if any, may be the most reliable at incorporating IPA as
a means of designing appropriate marketing strategies.
4. An alternative assessment of importance
The starting point for this paper is the idea that, for the
purposes of IPA, asking raters to rank attributes in order of
importance (with no ties allowed) rather than assigning them
absolute importance values offers the possibility of better
measurement of importance. Clearly, this procedure avoids the
problems that beset the indirect measures described above,
and, for each rater, avoids the problem of crowding, since
ranking k attributes automatically spreads their rank scores
evenly between 1 and k. Furthermore, as the evaluation task
forces the rater to consider attributes jointly rather than one by
one, this procedure has two great advantages by: 1) obtaining a
relative or competitive measure of importance for each
attribute; and 2) favoring rater commitment and involvement
in the evaluation task, especially by asking raters only to rank
their top few k preferences among the s attributes under
consideration, which reduces risk of fatigue. However, before
the application of this method, the researcher must settle the
question of how multiple raters ranking reports should
aggregate in the IPA grid.
If every rater ranks all the s attributes under consideration,
with rank 1 being low and rank s high, the mean rank assigned
to an attribute may be a reasonable measure of its importance.
However, this first procedure has three major drawbacks:
1) asking for only the top few k preferences can leave many
attributes with low aggregate rank scores, resulting in crowding
at the bottom of the IPA grid; this effect will increase with
greater numbers of attributes; 2) this procedure omits the
reported orders of preference listed by each rater; 3) comparison
with performance mean values would be difficult in both
quadrant and diagonal approaches to IPA.
Previous authors adopted a ranking approach in their IPA
research (Matzler et al., 2003; Mersha and Adlakha, 1992;
Sampson and Showalter, 1999), but they ignored the whole
number of attributes that compose the evaluation task, and/or
the rankings given by raters, using as their measure of
importance the absolute frequency for each attribute reported
by all raters or the mean rank of the ordered k attributes.
The measure proposed in this paper gets round those
problems by subjecting appropriately scaled mean ranks to a
transformation that depends on the proportion of attributes that
the rater must rank. The remainder of the paper describes the
scaling and transformation operations and the use of the new
measure for importanceperformance analysis of a primary
health care service and then compares the results of this analysis
with those of an earlier study based on a direct measure of
importance.
118 J. Abalo et al. / Journal of Business Research 60 (2007) 115121

5. Method Table 2
The nine attributes for assessing the patient-perceived quality of primary health
care in Galicia
5.1. Importance measurement
1. Medical staff
2. Nursing staff
Suppose n raters presented with s attributes rank their top k 3. Auxiliary staff attending the public
preferences using natural numbers from 1 (most preferred) to k 4. Easy of making an appointment
(least preferred), with no ties allowed. The problem is to use 5. Waiting time in the health centre before entering the consulting room
these rankings to assign each attribute i an importance value pi 6. Opening hours
lying in some specified interval that, for convenience, is here 7. State of the building housing the centre
8. Signage inside the centre
[0,1]; the value of pi should increase with the importance of 9. Equipment
attribute i.
Denoting by gij the rank assigned to the i-th attribute by the
j-th rater, the first thing to do is to recode the gij as ranking components of the service on the basis of the existing literature
scores hij that lie in the desired interval, increase with degree of and focus groups with health care staff and patients. The present
preference, rather than decrease, and assign the value 0 to all study includes a further factor excluded in the earlier study:
attributes not mentioned by rater j: health center opening hours, making nine in all (Table 2).


kgij 1=k gij not void
hij 1 6.2. Data collection procedure
0 otherwise
The data for application in this research came from 1767
Table 1 lists hij for values of k and gij up to 9.
patients recruited at 75 primary health care centers from among
For the reasons noted at the end of the Introduction, the mean
all patients aged 18 years or older, respecting proportionality as
of the hij over raters, mi, tends to crowd attributes together at the
regards age groups and sex. Eight trained interviewers collected
bottom of the importance scale. This tendency is even greater,
the data for a month. For the purposes of the evaluation of service
the smaller the proportion of attributes ranked by each rater, k /
performance, every rater scored from 0 (very bad) to 10 (very
s. Thus, this value is not attractive as a measure of importance.
good) all of the nine attributes considered, and the mean of the
However, this difficulty can be overcome by subjecting the mi
raters gave aggregate data. On the other hand, the aggregate
to a monotonic transformation that increases small mi while
importance values of the nine attributes came from the new
leaving large mi relatively unaltered. In view of the relationship
method proposed in this paper. To this end, raters ranked what
between the likelihood of crowding and k / s, a particularly
they considered to be the three most important attributes in order
suitable transformation of this kind is mi (mi)k/s. This proce-
of importance, from 1 (most important) to 3 (least important). To
dure increases discrimination between attributes and augments
minimize the likelihood of bias due to the order of presentation
the diagnostic and strategic properties of IPA. The transformed
(Ares, 2003; Tversky and Kahneman, 1982, 1983), each
importance measure proposed in this paper is therefore
interviewer presented the nine attributes in a different order.
X k=s Both the performance evaluation and the importance ranking
Pi n1 hij 2
j questionnaires formed part of a larger questionnaire on the
perceived quality of primary health care in Galicia.
6. Application: Ipa of a primary health care service
7. Results and discussion
6.1. Attributes
Table 3 lists the number of ranks 1, 2 and 3 assigned by the
In a previous study of the public primary health care service raters for each attribute, and Table 4 lists the aggregate
in Galicia, Spain, Abalo et al. (2006) identified eight essential

Table 3
Table 1 Number of assignations of each attribute to each rank in this study
Ranking scores hij for raw rankings gij of the rater's most preferred k attributes
Attribute RANK
hij k
1st 2nd 3rd
2 3 4 5 6 7 8 9
Medical staff 1044 320 157
gij 1 1 1 1 1 1 1 1 1 Nursing staff 38 367 199
2 0.500 0.667 0.750 0.800 0.833 0.857 0.875 0.889 Auxiliary staff 17 73 162
3 0.333 0.500 0.600 0.667 0.714 0.750 0.778 Ease of appointment 139 203 269
4 0.250 0.400 0.500 0.571 0.625 0.667 Time in waiting room 124 186 209
5 0.200 0.333 0.429 0.500 0.556 Opening hours 66 130 187
6 0.167 0.286 0.375 0.444 State of building 44 99 165
7 0.143 0.250 0.333 Signage 6 29 48
8 0.125 0.222 Equipment 289 360 371
9 0.111 Total 1767 1767 1767
 J. Abalo et al. / Journal of Business Research 60 (2007) 115121 119

Table 4
Aggregate performance and importance scores of each attribute in this study
Attribute Performance Importance a Discrepancy b
Medical staff 8.58 9.05 0.47
Nursing staff 8.40 5.82 2.58
Auxiliary staff 7.56 4.07 3.49
Ease of appointment 6.80 5.91 0.89
Time in waiting room 5.74 5.64 0.10
Opening hours 7.17 4.95 2.22
State of building 7.17 4.54 2.63
Signage 7.41 2.86 4.55
Equipment 5.66 7.18 1.52
Mean 7.16 5.56
a
Scaled up to occupy the same range as performance values.
b
Performance value minus importance value.

importance and performance value of each attribute together
with the difference between the two, where the determination of
aggregate importance is Eq. (2) multiplied by 10, in order to
achieve the same rank scale as the performance values. For
comparison, Table 5 lists the performance and importance
values obtained in the earlier study (Abalo et al., 2006), in
which the importance measure of the eight attributes considered
are the averages of ratings on a scale of 010 from 1601
subjects, obtained in the same way as the performance ratings.
In the earlier study, aggregate importance values squeezed
into a rank of only 1.66 units (from 7.34 to 9.00). Although
some groups of attributes are different from the others (because
the wide sample and subsequent little standard error, Table 5
and Fig. 3), the uncertainty in the values is large enough to be
able to use them for effective discrimination among the
attributes within these groups. By contrast, the importance
measure used in the present study successfully spread the
aggregate importance scores over a range of more than 6 units,
from 2.86 to 9.05.
Fig. 4 presents the aggregate importance values obtained in
the present study plotted against the corresponding aggregate
performance values on an IPA grid of the type described in the
Introduction. Fig. 5 shows the corresponding diagram for the
earlier study (Abalo et al., 2006), where aggregate importance
and performance both clustered around high values, crowding
the attributes into the upper right corner of the IPA grid. In fact,
Fig. 3. Aggregate importance values of health service attributes according to
Abalo et al. (2006). Bars show 95% confidence intervals, and frames surround
values that do not differ significantly at the = .05 level.
since in all cases importance exceeds performance and all the
attributes lie above the diagonal, a strict interpretation of the
diagram would suggest that all the attributes are good candidates
for improvement measures. This is somewhat counterintuitive,
given that the average performance value is 7.23.
The IPA grid obtained in the present study (Fig. 4) clearly
discriminates better among attributes than that of the earlier
study (Fig. 5). However, although its importance values show a
good spread, its performance values, like those of the earlier
study, crowd into a much narrower range (less than 3 units, from
5.66 to 8.58, in the present study). This is in keeping with the
usual tendency observed in studies of user satisfaction with
health services that have employed questionnaires soliciting
quantitative ratings (Fitzpatrick, 1991; Hawes and Rao, 1985).
In other words, direct performance ratings in the health service

Table 5
Aggregate performance and importance scores of each attribute obtained by
Abalo et al. (2006) by direct rating
Attribute Performance Importance Standard error of
importance
Medical staff 8.46 8.91 .034
Nursing staff 7.97 8.16 .044
Auxiliary staff 7.14 7.34 .050
Ease of appointment 6.87 8.88 .039
Time in waiting room 5.85 8.32 .046
State of building 7.27 8.78 .035
Signage 7.34 8.23 .043
Equipment 6.96 9.00 .036
Fig. 4. IPA diagram of a primary health care service constructed using the
Mean 7.23 8.45
performance and importance measures and data of this study.
120 J. Abalo et al. / Journal of Business Research 60 (2007) 115121
Fig. 5. IPA grid of a primary health care service constructed using the
performance and importance measures and data of Abalo et al. (2006).
area in general and these two studies in particular exhibit the
same crowding tendency discussed in the Introduction in
relation to direct importance ratings. Likewise, this phenomenon
extends to other fields like the motor industry, in which the
performance of a service recently rated from 1 to 10 with respect
to six attributes achieved a spread of just 0.61 rating points
between the best and the worst mean rating (Matzler et al., 2004).
The result of spreading out importance values while failing
to spread performance values, which cluster at the high end of
the scale, is that the great majority of attributes fall below the
diagonal of the IPA diagram (negative discrepancies: greater
performance than importance mean values for each attribute).
Only attributes to which users assign very great importance (in
this study, the medical staff and equipment) can appear as
candidates for improvement, which often is somewhat coun-
terintuitive, especially when those attributes achieve the best
performance mean values (e.g. medical staff ).
Therefore, for the purposes of IPA, preference ranking and
Eqs. (1) and (2) may often be useful to achieve a good spread
among both performance values and importance values.
Although the mean of the ratings given directly by users may
well be a better performance measure of individual attributes in
absolute terms, IPA requires the construction of a diagram that
highlights the relative importance and relative performance of
the attributes considered. To this end, the transformed rankings
approach described in this paper appears to be most appropriate.
Unfortunately, the requirements of the sponsor of the present
study on primary health care services prevented application of
the new approach to performance as well as importance, so the
reconstruction of raters' preferences from their performance
ratings was impossible, as ties among attributes is the rule rather
than the exception.
8. Conclusion
This paper presents a new method for measuring the
importance of product or service attributes for the purposes of
IPA. Instead of aiming for exact and absolute quantification of
raters' perceptions of the importance of the individual attributes,
the new method, defined by Eqs. (1) and (2), summarizes their
perception of the relative importance of what they consider to
be the most important attributes. Moreover, this procedure
spreads the attributes over the importance dimension of the IPA
grid, thereby improving the readability and utility of this tool for
successful marketing planning. The new method thus over-
comes a major difficulty faced by IPA based on absolute rather
than relative measures of importance, namely, the tendency for
all attributes to crowd into the upper part of the diagram because
of equally great importance among them. Empirical results
obtained by Abalo et al. (2006) using direct importance ratings
illustrate this tendency, and the empirical results of the present
study show that this problem is indeed surmountable with the
new method. By forcing raters to select what they consider to be
the most important attributes of the product, and to rank them by
order of importance, the new method may also increase raters'
involvement with the evaluation task. Previous attempts to base
importance measures on preferences (Matzler et al., 2003;
Mersha and Adlakha, 1992; Sampson and Showalter, 1999)
have failed to achieve the desired value spread because they
have failed to take into account the proportion of ranked
attributes and/or the reported orders of preference. Finally, in
view of the empirical results of this study, in which performance
values obtained by direct rating clustered at the high end of the
performance dimension, the new method may successfully
measure not only importance but also performance.
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