Budgeting for a customer satisfaction survey

Over the last couple of months a lot of people have been talking about budgets. Either they are just doing them or they’ve just done them for 2011. My first reaction is, when we don’t know what is happening to the economy from week to week, how on earth can you predict [and plan for] things that are up to a year away. My second reaction is, if the all important GDP and inflation figures are changing by nought point something of a percentage point, then ninety-nine percent is unchanged and totally predictable. Then a thought comes to mind about issues much closer to home and, naturally, closer to my heart; what about if they are budgeting for a customer satisfaction survey.

The micro view (do I sound like an economist?) is – are we getting their business? But it is the macro view that is more important – that is, will we be getting their repeat business over the coming years?

To achieve this, the customer satisfaction survey must be a success. For it to be a success the client needs to get a return on their investment. And to get that return, the client needs to Do Something With The Results.

Yes, I know it’s blindingly obvious. But dear reader, if it was so obvious, why do so many companies fail to fully follow through?

Here at InfoQuest we try our hardest to point clients in the right direction and give them a good push. We run full-day post-survey workshops with the client’s senior team. They develop an action plan, based on their customers’ feedback; prioritised to give quick wins and put together so that it fits any best-in-class continuous improvement culture.

But all our clients need to budget [or, if you prefer, plan] for some time and effort for that follow-through. If you want to get closer to your customers, if you want to optimise those relationships, if you want to sell more and reduce customer churn, then you are going to have to do some things differently. You will have to plan, implement and manage changes to your systems, disciplines, procedures and people – and that doesn’t happen by magic. Granted, there will be some things that you are currently doing that, based on the customer feedback, you might be able to stop doing – thereby releasing spare capacity of time, effort and money. But don’t bank on that Godsend outweighing the other issues.

So, if you are currently involved in budgeting and, by chance, are also thinking about running a customer satisfaction survey next year, please plan for some stuff to happen afterwards!

p.s. There is a 2-page pdf which looks at the Post Survey Workshop and a copy of our Brainstorm Scorer that we use to help prioritise the actions arising from those workshops available on our Downloads page at www.infoquestcrm.co.uk.

Good luck!

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I want to ask a question about survey response rates in B2B

I want to ask a question about survey response rates in B2B. No one else seems to want to talk about them, which makes me feel that this is the elephant in the room.

First of all, please let me make some assumptions about the market we’re in.

  • Most organisations that I come across in B2B have only a limited number of customers.
  • Most organisations agree that having good long-term relationships with their customers is essential to the welfare of their business.
  • Most organisations have some form of key account management going on – perhaps using sales reps or agents or distributors, perhaps using lots of levels within the organisation to interact seamlessly with customers.
  • Most organisations have an 80:20 customer profile (see Choosing the Most Important Customers on the Downloads page – http://www.infoquestcrm.co.uk).
  • Many organisations do not have activity based costing (ABC) and can only make assumptions about which customers are their most profitable (again, see the chart from the link above).
  • However, most organisations, with a bit of help, can identify their most important customers, as a mixture of largest revenue, most profitable and greatest potential.

So why would any B2B organisation be satisfied with, and make strategic decisions based on the feedback from, a customer survey where the response rate was less that 50%?

If it looks too good to be true………………it might not be!

Last week I was telephoned by a marketing magazine. The young lady who rang wanted me to place an advertisement in their magazine directory. She asked what other advertising InfoQuest was currently doing and I told her about the three e-shots that were sent out over the summer. Normally the summer, and in particular September, is a quiet period for us. September on the other hand is one of our busiest months, when we traditionally start pan-European projects for a number of [mainly] American clients that have got themselves into a routine, whereby they want the results delivered back in the first couple of weeks in January for their corporate “Kick-Off” meetings – energising the teams, establishing the targets and focussing on the year ahead. But August is traditionally quiet and a time when I part-jestingly suggest that we should shut up shop and go to the South of France for the month.

This year I wanted to drum up some business, and so we sent out three e-shots with a bunch of hooks – Do you need to conduct a customer satisfaction survey in the next few months? Would you like to get a higher response rate? Would you like to get more from the results? That sort of thing. I’d been told that the average “open” rate – where people open the e-mail and read it – would be ten percent. What was of greater interest to me was the quantity of “click throughs” – people coming to our website. We tracked these in real time on the days that the emails went out, and the results were dire.

So, when the lady from the marketing magazine called me, I made sure that I conducted the due diligence properly. I asked for a copy of the magazine to be sent to me and on Friday afternoon rang three of the advertisers. The three I picked were all in market research but not competitors – as it happens they were either offering omnibus surveys (where people will be asked their opinions on a range of subjects, from pet care to hair care, with clients sharing the overall cost of the research) or children’s surveys.

My survey of the surveyors was conclusive. One said that they’d had no benefits and were going to cancel (they’d signed up to twelve weeks of advertising), one said that, over the years they’d had the occasional enquiry and the third said that they only did it for brand visibility.

This got me thinking again. I’ve had a discussion running on LinkedIn as to whether marketing directors are interested in Return on Investment and whether I’d made a mistake in pushing our 10:1 r.o.i. guarantee (you can see the fabulous feedback that I got at http://linkd.in/cSUVzq). The folks at the agency who designed the e-shots and mailed them out for me were terribly laid back about the [what to me were] appalling results. And the three advertisers who’d had no enquiries from their adverts were equally laid back. Both the buyers and the sellers of advertising / marketing appear to have such low expectations.

My background, prior to joining InfoQuest ten years ago, was fifteen years as a management consultant specialising in change and cost-reduction. We had to hit the ground running. The results of our efforts were being measured within weeks of a project starting. We were often in a situation of having to turn round the fortunes of a business. It was all about the bottom line. Lost opportunity was measured when a particular initiative was late in starting by just a few days. I fell in love with InfoQuest because it affected the top line and didn’t mean “people off the payroll”. Over the years I saw that InfoQuest delivered time after time, particularly when we ran the powerful top-team post-survey workshops (at one recent workshop, for a company that manufactures rubber hoses for diesel engines, my client’s top-team ended the day with 165 ideas, based on the feedback we’d got for them, for how the company could increase it’s profitable sales). So much so that I wanted to share the benefits and eliminate the risks for potential clients – and introduced the money-back guarantee.

There is an old saying that if something looks too good to be true then it probably is. And if marketing people are so used to their efforts being wasted (or is it wasteful) then perhaps our guarantee is actually frightening them off?

By the way, please feel free to contribute to the discussion on LinkedIn, or call me on 01484 868395 (+44 14 84 86 83 95 outside the UK) and I’ll be delighted to talk you through any questions you might have.

John Coldwell

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Can we puhlease start to differentiate between B2C customer satisfaction and B2B satisfaction?

Can we puhlease start to differentiate between B2C customer satisfaction and B2B satisfaction?

It’s driving me crazy.

B2C is about buying a motorcar or a bar of chocolate or some music. It might be about you having the condition of your teeth checked or even having a tonsillectomy. These are all experiences, judged on the point of sale and the subsequent delivery of the product or service. Highly developed, high-volume experiences lead to brand value – BMW; Nestle; I-Tunes. B2C is where the money that is already on the table gets shuffled around and redistributed.

B2B is about buying raw materials and components, capital goods and long-term services such as buildings management and financial audits. These are all ongoing relationships, built on trust, mutual support and mutual benefit. In most cases the goal is “partnering”. The value of these relationships is measured as “good will” on the balance sheet. B2B is the wealth creation of this world.

B2C is about the EXPERIENCE. B2B is about the RELATIONSHIP.

There is a third sector, which is smaller than the B2B and B2C segments but nevertheless significant, that revolves around project-based work. Examples would be law (on a case-by-case basis), management consultancy (where you are only as good as your last project), and building and civil engineering (“oh look – it’s a different ring master but the same old clowns”).

InfoQuest has always been about B2B. We will happily turn away business that does not fit the B2B profile.

With enquiries for B2C customer satisfaction surveys, my response is always the same: make sure the senior managers (managing directors, chief executives and others) are leaving their desks and watching and listening to their customers at the point of sale (preferably anonymously, although wearing a disguise is optional) at least weekly before they even think about employing an outside firm. Dame Mary Perkins, the owner of Europe’s most successful opticians, Specsavers, regularly goes incognito visiting her shops and employs an army of mystery shoppers. Sir Philip Green, boss of Arcadia and Britain’s 9th richest person, will go and talk to shoppers asking them what they like and what they don’t like.

The advice for project-based organisations is straightforward. The project manager and the client should have a regular Friday This Week / Next Week meeting to discuss what happened this week, what is planned for next week (commitments), put it in writing immediately and both parties sign it off. It’s not foolproof, but it ensures communication and goes some way towards partnering.

For B2B customer satisfaction surveys the client needs to be measuring the relationships they have with their most important customers. They need to be drilling down into that relationship, listening to both the decision-makers and the key influencers; treating people as people and individuals individually, with different wants, different needs and different personalities. And, above all, aiming to get a minimum 50% response rate to any survey or feedback mechanism for it to be anything like reliable.

Ten years ago I made the decision to launch InfoQuest in the UK at the CRM Show. InfoQuest had been around in the U.S. for eleven years and had had some exposure in the UK but no actual launch. It was a big mistake using the CRM Show (and we’ve still got the InfoQuest Customer Relationship Management Limited official moniker – another early mistake). Oracle and Siebel were about to take the world by storm with their CRM solutions and nowadays everyone naturally associates CRM or customer relationship management with big, powerful databases that record and plan customer interactions – what they sell should, in my mind, be referred to as Customer Interaction Management, but I guess its not so catchy. We were the only non-techy stand at the 3-day show and the IT managers and Chief Technology Officers just walked past. Oh well, happy days.

But please, can the researchers and the governments and the marketing professors and the business journalists of this world understand, accept and make the differentiation between B2B and B2C?

John Coldwell

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“Buy, buy, buy!”

I’ve just received one of those out-of-the-blue cold calls purporting to be a Wall Street stockbroker asking me if I’d be interested in investing in a hot tip.

Last week on Twitter I tweeted that I: –

Would love to publish a list of Managing Directors who have told us they are not interested in customer feedback. Anyone want to buy a list?

Although the Tweet was a joke, in my mind the two events are inextricably linked.

If I’d got loads of spare cash lying around the house (which, by the way dear Mr Burglar, I haven’t) then I’d use the following criteria for investments: –

  • InfoQuest had conducted the survey on the organisations most important customers.
  • The results had come back showing that the organisation average levels of customer satisfaction ± 15%.
  • In the post-survey workshop the senior team had come up with at least 50 original ideas, based on the feedback we’d given them, for increasing the organisations profitability.
  • And I’d been impressed by the professionalism of the senior team and felt convinced that they would be capable of pushing through many of those ideas in a prioritised action plan in a relatively short time frame.

I’d be screaming “Buy, buy, buy!” for shares in those organisations and feeling happy that we’d offered them a 10:1 return on investment prior to the survey.

The corollary is that every time I hear a director, chief executive or vice president tell me or my staff that they are not interested in customer satisfaction surveys I immediately think “Sell, sell, sell!”

Treating customers as individuals

I have just come back from running one of our full-day post-survey workshops with an international IT firm.  It was an excellent session.  The results weren’t good, but the team came up with a bunch of ideas, which were prioritised so that the low-cost quick-wins came first.  But the best part of the session (for me, anyway) was the change in attitude of the CEO as the day progressed.  Early on he was asking about statistics and benchmarking (and so were some of the directors).  Don’t get me wrong; I’ve got nothing against statistics and benchmarking in their right place.  But here we had a company that has just over one hundred clients with, at most, two or three key contacts at each – that to me is a 250 person Christmas card list.

We had carried out an international customer satisfaction survey on three continents in five languages for this firm and had got responses back from more than 72% – 143 responses from 200 surveys that had gone out.

I asked the CEO directly, how many of the customers he knew.  He started going through the list (we have a chart of who responded; and another which lists out the serious issues, by customer; and in yet another section of the report we produce a page for each and every respondent, in alphabetical order).  The first one he’d spoken to a couple of times.  On the second one, he asked if e-mails counted (yes, of course).  He denied knowing the third customer on the list at which point both of the people on either side of him said in unison “you do” (which was very funny to watch and got the debate going).

My point was that we were talking about people, not segments or statistics.  And benchmarks can be a HUGE distraction.  Forget about how you compare with ABC or XYZ – the best companies that are at the top of their game focus on long-term continuous improvement.  Or, as I call it, the Toyota mountain of a thousand little ideas.

By the end of the workshop my new best friend the CEO was setting a target for the overall satisfaction question – “On an overall basis, how satisfied are you with our company?” (this question has been included in every single survey that InfoQuest has conducted since 1989 and it is always posed last – it’s the last card in the deck, so it gets a very considered response, as the responder has already been through up to 59 other questions and statements about the business relationship of the two entities).  The directors and senior managers (15 of them) were balking at the target being proposed by the CEO.  The CEO was talking about a 20 percentage point increase by the time they repeated the survey next year.  His team said that was too tough and it should be reduced.  Then he came out with a marvellous statement.

The CEO said that to get the 20 percentage point increase they simply had to move 30 individuals who were currently “somewhat satisfied” into being “totally satisfied”, adding the magic “That’s just two contacts for each person sitting round this table.  Who’s telling me that we can’t do that?”

I’ve had clients that have segmented their customers between desktop and mainframe applications; those that have received consultancy in the past year and those that haven’t; new customers versus legacy customers; Gold, Silver and Bronze customers (whatever the hell they are); and those where there is between 12 and 24 months of a service contract left to run.  These segments are all useful to an extent (well, nearly all) in that they provide labels that my client is comfortable with.  But in business to business, where there aren’t that many customers and they all need and want slightly different things, please just treat them as individuals!

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