Is Your Company Really ‘Listening’ to Your Customers?

Mr. Pete Tosh
September 10, 2012 — 936 views  

An organization can only provide its customers with what those customers truly want - value as defined by those customers – if the organization continually, formally & informally listens to its customers.

Dr. Lynn Berry, Professor of Marketing at Texas A&M & author of Competing Through Quality, has developed a functional model for attracting & retaining customers - to ‘Close the Gap’ between Customers’ Expectations & their Perceptions. The four steps within Lynn’s model are to:

  • Understand your customers’ expectation
  • Develop standards of performance in line with those customer expectations
  • Perform to those standards of performance
  • Not create any false expectations – which, of course,  raise customers’ expectations & widens the gap

You’ll note that the 1st step in the model is: knowing what your customers expect of your organization. Many businesses have gone out of business telling themselves how well they were performing – failing to seek & understand their customers’ expectations & perceptions. After being in an industry for awhile, it’s human nature to assume that we know what is best for our customers.

The most successful companies deliver far more than products & services. They understand & enable their customers to achieve their strategic plans more effectively than their customers could with any other supplier. But we can’t have that in-depth knowledge of our customers’ needs, business goals & marketplace without asking. If a business does not have processes in place to monitor its relationships with its customers, it’s relatively easy to miss the early warning signs that a customer may have become dissatisfied & may be ‘shopping’ the competition. Relatively few organizations do this well – so effectively ‘listening’ can provide a significant competitive advantage.

Through a customer survey an organization:

  • Can capture their customers’ expectations regarding product & service quality, customer experiences & pricing
  • Which allows the organization to create positive perceptions leading to customer satisfaction & loyalty, repurchase intentions & willingness to recommend
  • Thus enhancing market share, profits & shareholder value

Gaining this competitive advantage begins with at least one ongoing customer listening methodology. Let’s take a quick look at the pros & cons associated with six commonly utilized approaches:

1.    Face to face interviews:

Pros: Complex questions can be explored, in-depth responses are obtained & often this is the only means of surveying executives

Cons: Interviews are time consuming, costly & obtain perceptions from a relatively small number of respondents

2.     Focus Groups:

Pros: Stimulate creative thinking & allow the participants to build on the comments of others

Cons: Group setting may be a limiting factor, theydo not allow participants to fully express themselves&theycan beinfluenced by dominant participants and/or an ineffective facilitator

3.     Electronic:

Pros: Real time feedback, inexpensive with low marginal costs & world wide coverage

Cons: Does not allow for probing, the response rate can be low &often the responses contain limited specifics

4.     Mystery Shopping:

Pros: Convey the reality of customers’ experiences&can be structured to understand what is actually occurring in most types of customer experiences

Cons: Quality of feedback is heavily dependent on the training & skills of the shoppers &this approachrequires a significant number of responses to obtain a valid perspective

5.     Surveying Customer Contact Employees - as to what they are hearing from customers:

Pros: A readily available, in-house source of information&creates employee buy-in to subsequent customer satisfaction improvement initiatives

Cons: May be significantly biased&providesonly subjective input

6.     Customer Advisory Panel:

Pros:Often the best source of strategic feedback from customer executives &allows the host organization to obtain feedback regarding potential new product or service offerings

Cons:Requires upfront planning & logistical efforts to obtain participation & facilitate the meeting with customer executives

There is no best means of ‘listening’ to customers. The approach that is most appropriate for an organization depends on the organization’s need:

  • for a high customer response rate
  • for rapid responses
  • to acquire complex information/responses
  • to offer anonymity to the respondents
  • to avoid interviewer bias
  • to reach a geographically dispersed customer base

However, once you understand your customers’ expectations & perceptions - you can utilize that information to make your organization ‘famous for’ the performance attributes most valued by your customers.

Mr. Pete Tosh

The Focus Group

Pete Tosh is Founder of The Focus Group, a management consulting firm assisting organizations in sustaining their profitable growth through the management of four[4] core disciplines: • Strategic Planning • Enhancing Customer Loyalty • Maximizing Lea