Get the insights you need to make informed decisions about your business with Insync's guide to customer surveys. Learn about the importance of professional surveys.
Last week we were talking to a CEO who felt he needed a customer survey. His issue: the top six per cent of clients gave him 74% of revenue. Mix this fact with an economic downturn and you get a cocktail that keeps you up all night.
If just one of his key clients defected or went out of business it could cause lasting damage to his business. Damage his organisation may not easily recover from.
Let’s look at what’s involved in putting in place a customer survey program that could help you understand which key clients are at risk and what to do about it.
Customer survey reveals who’s at risk
Asking customer survey questions yourself is less likely to get the frank and honest feedback you need. They may be telling you exactly what you want to hear while thinking the opposite.
Understanding which clients are at risk requires a clear and logical approach to gathering client satisfaction feedback. Our experience at Insync Surveys has found that the best way to identify who’s at risk is to:
- make it clear to them that you want their honest feedback and are using an independent third party to encourage them to be open
- segment your client base and invest most of the effort into understanding what your highest value clients think of you. This may involve third party phone interviews or even face-to-face discussions with the top 20 clients. In person discussions make it easier for the client to feel comfortable with telling it like it is
- make the customer survey process focussed and time efficient, clients are time poor and if you make the online or telephone feedback process too long your response rate will fall
- have the independent customer survey provider ask explicitly if clients wish to have their name attached to their feedback, making sure they understand that the company really appreciates their openness. They may refuse but in our experience using a third party increases the chance they will give permission
Preparing a business case
Before you propose any new program you’ll need a business case. It’s important to quantify the investment you’re making in your customer survey compared to the benefits it will deliver.
The first step is to quantify the risk of losing one or more of your A grade or B grade clients. Given that many of your larger clients may provide revenue into the millions of dollars the impetus is clear.
Make a matrix with current sales value on one axis and share of wallet on the other. The biggest clients by sales value represent your highest risks, while the low wallet share clients represent the biggest opportunity.
Another big potential opportunity area is clients who have reduced their spend in the last two years. Some have shrunk and your share of wallet is the same, but others have gone elsewhere and might be open to coming back. Compare current sales data with that of two years ago and target these customers.
Turning these data into a business case isn’t easy, but you still have to do it. Every industry is different, but one client we know of uses the rule of thumb that 25% of clients could increase their spending by 50%; giving them a total revenue uplift of 12.5%. Of course, a well constructed customer survey can actually reveal these statistics.
Finally, a good customer survey should always ask for referrals. Ask us if you want to calculate a referral rate that you can then use in your business case.
Your return on investment estimates will flow from this business case.
Having a clear understanding of the outcomes from a customer survey project like this is very important and in our experience, considering what a research project won’t deliver is also worthwhile.
What you can expect:
- a better level of insight from your key clients, as long as you tailor your collection methodology (e.g. phone calls rather than an online customer survey for high risk/opportunity clients)
- more candid feedback by using a trusted third party to run the customer survey so confidentiality is an option for respondents
- using a proven framework and methodology to gather client feedback will tell a clear story and provide evidence for action that will stand up to scrutiny by your senior management
- key problems in your business will be highlighted, especially if you tailor the customer survey or interview to capture data about these specific areas
- a clear understanding of where clients place their priorities, with insights into what the key issues are from the client perspective
- product or service improvement ideas
- better business decision making by being closer to the voice of customer
What you should not expect:
- 100% response rates. Yes, it’s true that on occasion we’ve been so effective with our phone calls that we’ve got more than 100% response rates for our clients, because other customers have heard about the research and asked to be included. However, this depends on how important the supplier is to the client. Where a client doesn’t see you as an important part of their business, they are less likely to give you feedback
- a broad online customer survey is a great, cost-effective tool to get to the majority of your clients but if the supplier/client bond isn’t very strong then we’ll let you know to expect 10% rather than 60%
- don’t expect you will get the name and company of every client who gives feedback, sometimes people just want to remain anonymous
- that every client who is at risk is comfortable telling you, they may have already decided to leave and don’t want to have to justify themselves
- don’t expect that the report will give you all the answers. In our experience, a good customer survey response takes three ingredients: the report, your context, and skilled interpretation. Spending that last 20% of presentations and facilitations doubles the value you get out of your customer survey project
A final thought
Collecting customer feedback is a specialised skill. It may be gathered online via a survey, via telephone or even with a face-to-face interview. Insync Surveys provides all three of these client feedback options to listen and record information for your customer survey.
Many clients will tell an interested person about your organisation’s shortcomings long before they tell you. The good news is, if you get this information early enough, you will have time to make it up to them. Systematically seeking and acting on client feedback provides a sound foundation for building enduring relationships, a valuable asset in uncertain economic times.