© Chief Outsiders, LLC 2012

The Growth Company’s Guide to Gathering Customer Feedback

FRACTIONAL CMOs FOR GROWTH & MIDSIZE COMPANIES

© Chief Outsiders, LLC 2012

Why You Should Care about What Your Customers Have To SayWhat do your customers have to say about your company?

How do they feel about your products and services? What do they think of your staff and the services they provide? Do they value your sales and service teams? Do they consider your sales people to be a source of information or just someone trying to make a sale? Are you easy to do business with? Is your pricing too high or your products inferior? How do you compare to your competitors in your customers’ minds?

These are some of the critical questions every company should ask, the answers to which can help address your customers’ needs more effectively, head off your competition, and maybe even uncover new opportunities to grow your business. At the very least, the answers to these questions, if asked effectively, will help you develop strategies and tactics to keep your existing customers, happier which can lead to longer-term relationships and repeat sales.

Talk about putting together a process to gather “customer feedback” to some people and you’ll get a skeptical look and maybe even a full-on eye roll. Some of the common reasons for not gathering customer feedback in a formal way include “I already know what my customers think about my products/my service/my company because I spend time with them every day”, “We’re a small company and can’t afford market research” and “Our customers can’t always describe what they want.” The last point is famously illustrated by two giants of American business - Henry Ford, who is quoted as saying “If I’d asked customers what they wanted, they would have said ‘a faster horse’.”, and Steve Jobs who has been widely reported as saying “A lot of times, people don’t know what they want until you show it to them.” If you look into both of those quotes, however, you’ll see that both Ford and Jobs were talking about product development or game-changing approaches in existing product categories. Henry Ford did not invent the automobile, he gave people a new vision of them; and Steve Jobs did not

invent the personal computer (or the music player, cell phone or tablet computer), he brought a new design sensibility and usability to them. In both cases, Ford and Jobs were right that consumers at the time were not in a position to envision a better way without something concrete being shown to them.

Most companies, other than startups, don’t rely on completely new or reimagined products to fuel their growth. Occasionally, they may have an opportunity to create a new category or bring a revolutionary product to market, but most of the time they’re

focused on some combination of increasing customer loyalty, growing market share, entering new markets, and expanding their product lines. In addition, despite Steve Jobs’ famous quote, Apple has always had an obsession with understanding their user base, interacts with their customers frequently and formally, and has relied on the expertise of their designers, engineers and others to be aware of what was going on in the

market.

So, if you’re like most companies, you should consider a formal process for gathering customer feedback and the benefits it can provide.

“Talk about putting together a process to gather ‘customer feedback’ to some people and you’ll get a skeptical look and maybe even a full-on eye roll.”

© Chief Outsiders, LLC 2012

Why You Should Not Rely On Sales or Service to Deliver Your Customers’ MessageSales and Customer Service are two of the most frequently used channels for customer feedback in both B2B and B2C environments.

The attractiveness of Sales and Customer Service as a source of customer feedback is obvious. They know the buyers and their process, interact with customers on a daily basis, understand the customers’ needs, and know what’s happening in the market. The same can be said of the small business owner or manager who works directly with customers and knows the business intimately.

But the same things that make these groups attractive sources of customer feedback work against them as a source of useful insights. They typically only see a single side of the customer; the one the customer wants them to see.

Despite their best efforts, sales people won’t necessarily understand all of the customers’ buying criteria, their options or decision making process. They will often only be aware of the competitors they come across most frequently and are most like them. As a result, they often overlook new market entrants or don’t consider an alternative method or product as a competitive threat. In addition, sales people, being human, have their own biases and will have difficulty in accurately representing the importance of product deficiencies, pricing or competitors’ products as the reasons behind one or more lost customers.

The same can be said of Customer Service representatives. Like sales, they spend their time building strong customer relationships, often working directly with customers to resolve problems or solve difficult challenges. However, it’s not unusual for Customer Service to only work with a sub-set of customers. In B2B environments, they may only work with a small group of technical or business users within their customers’ businesses without understanding the broader business needs and impact. In the consumer

world, Customer Service may only interact with those customers who call with a problem or concern and, as a result, miss out on the feedback of the broader set of customers who are either problem free or, worse yet, go

elsewhere without ever raising a complaint, contacting anyone in your company or saying anything at all. As a result, they will have a biased view of company’s products and services based on the input of the customer subset with which they interact.

Human nature comes into play in another way too. It’s

precisely because good sales and service people spend their time building strong relationships with their customers that those same customers won’t necessarily provide accurate and honest feedback. It’s hard to deliver unpleasant news to someone they’ve built a relationship with. Because they like and respect their sales or service rep. and, in many cases have relationships which go back years, they tend to sugar-coat their responses so as not to cause any hurt feelings. As a result, they often fallback on such excuses as price, internal decision making processes, or “their boss” as the

reasons for lost sales or for taking their business elsewhere in the B2B world. For B2C sales, they may assign too much credit to the skills and expertise of their friendly sales or service rep. when providing positive feedback.

This is not to say that you should never collect feedback about customers from your sales and

“It’s precisely because good sales and service people spend their time building strong relationships with their customers that those same customers won’t necessarily provide accurate and honest feedback.”

© Chief Outsiders, LLC 2012

service reps, just that you should not rely on it as your primary source of data. You must realize that your sales and services reps themselves are not typically experts at collecting effective customer research. The can provide a useful summary of what they are seeing in the market gleaned from their access to multiple customers. However, they lack a way to parse the data they have or weight it in any meaningful way. They often fallback on the most recent experience they had or the comments of their most vocal customers.

How To Effectively Gather Customer FeedbackSo, if your sales and service reps are out as a primary source of customer feedback, show should you collect it?

Engaging a market research firm is one option. They will have not only the expertise to conduct effective research; they will also have the infrastructure in place to support the research process. For example, they will typically have research design experts, data gathering experts, statistical experts and consultants available to analyze and understand the meaning of the feedback you gather. In addition, they will be able to provide objectivity in collecting and analyzing the data as they will not have preconceived biases regarding your products, services or company. You may also find that your customers are more willing to talk and more open with 3rd-party researchers rather than the people who represent your company directly. Market research agencies don’t come cheap however. A focus group, for example, can cost $5-10,000, and a complete customer survey may cost $15,000 or more. These costs may be out of reach for many growth companies.

Fortunately, there are options available which can help you gather useful customer feedback without breaking your budget. The practicality and effectiveness of these methods may vary somewhat depending on the nature of your business and the makeup of your customer base. They include:

Informal focus groups – Formal focus groups involve a process of careful selection of participants, expert moderation and the use of specialized facilities that feature audio/video recording and observation through 2-way mirrors. All this comes at a cost. Instead, you may be able to gather a small group of your customers together for a less-formal discussion around such topics as your products, services and customer service capabilities. In place of a focus group facility, you’ll need a quiet place where 6-10 people can sit around a table and have a discussion. You’ll also need a discussion guide and someone who can act as moderator. This person should be

knowledgeable about your business but need not be a research expert. He or she must be careful to listen to the customers and not influence their answers in any way. This can be very difficult for some people, as people who are close to your company, your products and your customer service can often be defensive

or want to correct the customers’ “misperceptions”. It’s also a good idea to have multiple people listen and take notes of conversation, to ensure an accurate representation of the customers’ feedback.

Customer advisory boards – Customer Advisory Boards can be similar to focus groups, except that they are more formal and long-lasting in nature. Membership may be made up of more influential customers based on the amount of sales they generate for your company, their ability to influence others or their specialized expertise. While focus groups come together a single time, Advisory Boards meet on a regular basis (often quarterly) and are asked for input into the strategic direction of your company. The agendas for Customer Advisory Boards are also often influenced by the members themselves, who participate on a voluntary basis, but expect

© Chief Outsiders, LLC 2012

to benefit from the time commitment they make to participate.

Online surveys – Online surveys can be an easy and low-cost way to gather feedback from your customers. There are a number of free and inexpensive options available for you to use, including the software you may already be

using for your email campaigns. Of course, you’ll need to email addresses and/or some other way for customers to access your survey. The most important thing is for your survey to be clearly written in a language that fits your audience and is focused on their needs. The questions should be brief, to the point and specific to the type of feedback you’re trying to collect. Be careful not to write questions which lead the survey taker in a particular direction or steer them towards your own biased views.

Phone surveys – Because phone surveys are immediate, they can often prompt responses from people who may not feel comfortable responding online or don’t take the time to click the link that leads to them. Like online surveys, phone surveys should be short, to the point and unbiased in their wording. They may also be a way to gather more in-depth comments, but be careful of letting them run so long that they take too much of your customers’ time or prevent them from getting to all the questions. It’s also best not to for phone surveys to be done by anyone who know the customers being called to prevent relationship bias from entering into the survey.

Comment cards – Comment cards can be used in most businesses with physical locations like hotels, restaurants, retail stores and other service-based operations. They can be included with invoices or customer

receipts or left on the counter of the store. You can also include a place for customers to provide comments on your website. To be effective, comment cards should ask only a few carefully worded questions and provide a space for customers to leave a longer response.

Social media – Social media sites such as Twitter, Facebook and certain blogs are increasingly becoming avenues to gathering feedback from customers. For many consumer-facing brands, sites like Yelp, CitySearch, OpenTable, Foursquare, Google Places and even Angie’s List can provide customer reviews which can provide a snapshot of customer experiences. These channels are often more passive in nature, as most companies start by simply listening to what’s being said about them. Listening can progress to asking questions about your company, products and services in social media forums. If you do, be sure to be transparent about who you are and what you are asking about. Either way, be prepared for what you hear and don’t be defensive about negative comments. Instead, look for patterns in the comments you see and follow-up in a public and positive way to correct any customer issues which may arise.

Whichever method you choose to gather feedback from your customers, it’s important that it’s seen as an ongoing process rather than a one-time event. The more your customers become accustomed to your requests for their views, the more likely they are to provide it. Your team is also likely to take it more seriously, as they realize it’s not just a one-time thing or a fad.

“Fortunately, there are options available which can help you gather useful customer feedback without breaking your budget.”

© Chief Outsiders, LLC 2012

What To Do With Customer Feedback Now That You Have ItObviously, just gathering customer feedback is not enough. Now that you’ve got it, you need to figure out what to do with it.

What you should never do is ignore or discount the feedback because you don’t like or agree with it. Remember, the information you’ve collected represents your customers’ view of your company, your products, services or customer service delivery. Whether it reflects the reality you know to be true or not is immaterial. It’s how you’re seen that counts.

Instead, you need to take the time to analyze the feedback to understand its value. Look for patterns in the information your customers provide to determine which items are wide-spread and which are isolated to a single or small group of customers. You should also look for correlations between the feedback and the customers who provided it. This can help you uncover items that pertain to specific customer segments. For example, unmet needs for a business customers in a specific industry or consumers in a particular demographic or geography. These correlations may also point out training opportunities for your team or opportunities to better educate your customers about the benefits of your products or new uses for your products/services.

It’s also important to share the results with managers and others within your company. Look for opportunities to include them in the process of coming up with solutions to address unmet needs or concerns. Be careful, however to present the information gathered from customers in a constructive way and to keep the team focused on solutions and opportunities to be gained from the feedback rather than explaining why the customers are wrong or defending the company.

Once you’ve done this, it’s time to develop and prioritize action items to make improvements or take advantage of the new-found opportunities. You may want to start with the items which will make the biggest impact

or those which are easiest to address. One option is to begin with the issues impacting the largest group of customers. Whichever approach you take, be consistent and make sure everyone understands the priorities.

As you develop your action plans, be sure to include

timelines and the specific individuals responsible for putting them into action. While it’s important to include the broader organization in the execution of the plans, it’s critical that each action items has specific owner responsible for seeing that it’s implemented. Depending on your business structure, the products or services you sell or the customers

you serve, you may consider testing your proposed solutions in a controlled environment before making them permanent. This approach can often help you work out the details and make adjustments without impacting your entire customer base.

You should also look for ways to close the loop with your customers and let them know they’ve been heard and listened to. Seeing how you use their feedback to impact your products, services and other aspects of your business will encourage them to give you more feedback in the future. They’ll know they’ve been listened to and the time they’ve taken to give you feedback was not wasted. You may even be able to include your customers in the process of making improvements by having them review new

“What you should never do is ignore or discount the feedback because you don’t like or agree with it. Remember, the information you’ve collected represents your customers’ view of your company, your products, services or customer service delivery. ”

© Chief Outsiders, LLC 2012

products or procedures while they are in the testing phase.

Be sure to track your results. One of the best lessons I’ve learned in my business career is to “inspect what you expect.” As you implement changes based on the feedback

gathered from your customers include measurement systems to track the effectiveness of the changes. These will serve to not only hold people accountable for real change, but will continuously reinforce the behaviors that lead to real improvement and better customer outcomes.

Lastly, be prepared to not get it completely right at first. Give yourself time to learn and for the changes to take hold. Don’t be discouraged if your customers don’t respond to your requests for feedback or recognize or respond to the changes you make right away. They may need time to realize their impact or to notice them in the first place. Also be prepared if your organization falls back on old habits even as you introduce changes to better meet your customers’ needs. They may need time to adjust to the changes.

ConclusionCustomer feedback can provide incredible insights for every company regardless of the industry, product, service or make-up of the customer base. There are many options available which you can use to collect useful data from your customers. Some are free and others entail an expense, but none will provide the results you need without careful planning and implementation.

Chief Outsiders can help determine which approach is best for you. Our fractional CMOs can work with you to develop an effective customer feedback system and implementation plan for your growth company.

“Don’t be discouraged if your customers don’t respond to your requests for feedback or recognize or respond to the changes you make right away. ”

© Chief Outsiders, LLC 2012

www.ChiefOutsiders.com • CMO@ChiefOutsiders.com • Call 855.777.2443

About Chief Outsiders Chief Outsiders, headquartered in Houston, TX, is unique among strategic marketing consulting firms, taking growth and mid-sized companies to the next level with outsourced CMO services. Unlike most marketing consulting firms, Chief Outsiders believes that delivering a world-class marketing strategy creates very little value. The value is created by helping the organization implement the growth vision.

Regional offices serve clients across the country and are located in Texas, Pennsylvania, New York, New Jersey, Connecticut and Georgia. Chief Outsiders has been a premier source for marketing expertise, execution and leadership for companies such as KBC Engineering, Alen Air Purifiers, Bethyl Labs, NetworkIP, Blickman, and Certified Steak & Seafood. For more information, please visit chiefoutsiders.com.

About Slade KobranSlade Kobran is an innovative strategic marketing executive with a proven talent for elevating the visibility, performance and profitability of growth-minded organizations. Kobran achieves these goals through the expert orchestration of branding, lead generation, market development, new product launch, and external and internal communications. He is known for his ability to identify new customer markets, products and revenue streams that generate substantial profit. Kobran’s many hats have included Chief Marketing Officer; Vice President, Strategic Initiatives;

Vice President, New Business Development & Marketing Services; and Vice President, Marketing with such market leaders as Infogroup, ADP and Dun & Bradstreet.

Email: SKobran@ChiefOutsiders.com

Phone: 201.675.9157

If you are interested in learning more about how Chief Outsiders Tribe of experienced marketing executives can help you assess your situation and offer an informed perspective on how to approach your growth, request a complimentary consultation today.

FRACTIONAL CMOs FOR GROWTH & MIDSIZE COMPANIES