Lots of businesses do them. Very few do them right.
Customer satisfaction research seems so simple that one wonders why it’s not a universal practice. Imagine being able to develop a new business out of an existing business and, at the same time, uncovering and solving problems that might be threatening vital customer relationships.
Surveys uncover what customers feel is important in their relationship with their suppliers and how they rate the business’s performance. As some companies have learned to their cost, surveying customers is not a job for amateurs. You can’t simply mail a questionnaire and expect to get back useful information, that’s if you get back any information at all.
The best results are obtained by outside market research consultants who know how to set up phone interviews and extract quality information from customers. They have developed benchmark data with which to evaluate and interpret customer responses to a broad range of questions.
Moreover, outside market research consultants know how to underscore the information they develop in a way that reveals persistent problems in the relationship. Armed with the information, responsible partners follow up with the customer to solve problems that have been uncovered or to explore openings for new business that have been revealed.
“Too bad they don’t have an environmental practice,” a legal customer may say.
Findings like that often shock lawyers. They are often appalled to learn just how little even their oldest customers know about them. In addition, firms often are surprised to learn how much business is leaking away to competitors.
You may know your environmental practice is blue chip. Half a dozen customers may know it. But the rest of the world, including the rest of your customers, may be clueless. If nothing else, the customer research process underscores the areas in which you now need to do some concerted marketing and PR. Business development, after all, is about market perceptions, not reality.
One went something like this: “We already know where our weaknesses are. Why invest time and money to find out what we already know?” The answer to that is twofold. First, you might be surprised! The customer survey might well tell you something you don’t know. Equally, if not more important, customer/customer satisfaction research isn’t necessarily supposed to reveal something new. A major purpose of the research is to prioritise your strengths and weaknesses as well as the corrective and opportunistic actions to be taken.
Data from the survey may show that certain attributes, such as communications skills and knowledge of the customer’s company, are ranked as highly important by the supplier but less important by the customer, or vice versa.
You might know where your weaknesses lie, but where do you want to invest the lion’s share of your corrective energies? Do you want to invest in solving a problem that the customer considers marginally important? Or, do you want to invest in solving a problem that the customer considers crucially important? Knowing thyself isn’t enough. The research tells you what part of yourself is actually relevant.
Today, the customer-research process has finally caught on because businesses are realising that they have no choice. It has finally dawned on them how much money they’re leaving on the table, on a per-customer basis.
As the competitive marketplace consolidates, the realisation has been forced on them that, while they may have once rejoiced in a £50k per annum customer engagement, that £50k represented, say, a mere 20 percent of the customer’s total spend budget. Ever-bigger competitor firms were sharing the remaining 80 percent and, sooner or later, were gobbling up the £50k stake as well.
Today, businesses will continue to leave significant amounts of money on the table if they can’t answer these questions:
- What products and services is being supplied by other companies?
- Who’s doing it?
- How satisfied is the customer with the product/service provided by its current suppliers?
- What is our image with respect to these services?
- How should we address this opportunity (if at all)?
The businesses that are in the most trouble are the ones that typically have handy excuses for each decline in customer share. Businesses that attribute declines in market/customer share to “natural work cycles” or to the happenstance of particular purchases are the ones that most need to pursue formal customer satisfaction research simply as a matter of survival. Their customers are in danger of just fading away.
The awful problem for such businesses is that there is no moment of crisis that brings the real reason for decline to the fore. The satisfaction research, in a sense, creates the critical moment of awareness. It makes explicit the tacit cause of the decline.
The data produced in the customer research process should compel two different kinds of action points. The first is direct action that the business can take to rectify, improve, or expand customer service. Typical examples include:
- Day-to-day operations. For instance, the customer says, “We need regular reports. We’re not getting them.” So, for goodness sakes, give them regular reports!
- Larger strategic issues. For instance, the customer says, “We need you to understand our company better so that you can gear your services to our business objectives.” For the responsible business that is a cue not simply to run out and start doing research on the company, but to drill down deeper to ask: What aspects of the company do we need to understand better? Is it your growth plans, your product development, or your financials? How do we develop a better understanding and to better define your business objectives?
- Resources. For instance, the customer says, “Business X is developing an extranet that is really useful to us. It would be great if we had something like that from you to help us manage our potential caseload in areas where we’re exposed.” The implicit but obvious message is that business X, rather than you, might get more of the customer’s business because of that extranet or similar resource.
The second generic action point is less direct but equally important. Your research will reveal customer discontents that you simply cannot do anything about.
What do you do then?
The most typical case in point is cost. “You’re too expensive,” says the customer.
The action point here actually might be a re-examination of the entire relationship. Indeed, it has become a strategic imperative among many businesses to review their customer bases and identify the profitable work and the unprofitable work. If there is real resistance to your prices, even if those prices are in line with what similar businesses are charging, it might be a cue to disengage.
The objective at that point is to disengage in a way that will preserve the relationship. The same company that is balking at your rates for commodity products or services could yet have premium work for you further down the line. A forthright, respectful conversation might show that the customer would have no problem with your cost structure for those higher-quality products or services.
Remember, customers generally gripe about prices. It’s part of their job to do so; but information collected by a company with deep experience in the specific marketplace will provide benchmarks allowing you to gauge whether their complaints are unusual, whether they’re things to be really concerned about or whether they’re likely just posturing.
Other problems or customer discontents might be unsolvable but shouldn’t normally prompt you to any drastic action. Often, the action point in such cases is simple handholding and sending the crucial message that the customer really wants to hear. The message is: “We can’t solve the problem, but we do still care very much about you, and we will do everything in our power to at least assuage the difficulty”.
For example, the customer might say, “Your invoice system is too cumbersome for us.” Usually, a business is not in a position to junk and redesign its entire invoice system. If the customer satisfaction research reveals this particular problem, the company should first acknowledge that it is an intractable problem. Customers also appreciate candour, but then it should commit to providing as much support as possible. Make your support personnel available 24/7 to walk the customer through every wrinkle in his bill.
Customers do not expect you to be able to fix every problem, but there is great benefit to the relationship in just showing that you are listening, understand and care. It’s bad not to know what’s troubling the customer, and it’s much worse to ask what’s wrong and then not even acknowledge that you’ve heard it.
There are obvious reasons why customers love good customer satisfaction research. Their relationships with their suppliers are crucial to them, and when they see them taking concrete steps to improve those relationships, they respond accordingly.
Remember too, many, many customers survey their own customers. It’s a process that they already believe in. When they see their suppliers pursuing such sound business practice, it assures them that the company is likely pursuing other sound business practices as well, from refurbishing their infrastructures to managing orders more efficiently. |
