How Well do You know Your Customers?
One of the most interesting and valuable things I do for clients as a marketing consultant is market research.
Simply asking the customers about the client’s business and their experience in dealing with them!
The research is valuable because many clients are surprised by the new information revealed and have the opportunity to adjust their businesses and products to take advantage of the new data.
1. Trade Tools Survey
A couple of years ago I did a survey for Trade Tools of their major customers to find out what they thought of Trade Tools, what could be done to improve the organisation and what advertising was being read by them.
I designed a questionnaire that allowed the selected customers to rate Trade Tools in a wide range of areas from the range of products offered to service experienced at the stores, their use of competitors and suggestions they had to improve the Trade Tools organisation, what papers they read and radio / TV stations watched.
The survey was done by telephone and the answers noted down, analysed and a report produced with the results, conclusions drawn and suggestions for changes that could improve the customer relationship.
Obviously the results are confidential, but a lot were a surprise and provided new information needed to allow Trade Tools management team to make important changes that have allowed them to move forward successfully.
Trade Tools is unusual as very few businesses do any in depth research on their customers while those that do pretty much limit it to “after delivery” satisfaction surveys.
2. Survey – price is not everything
Another organisation that I did a survey for was convinced that their cheap prices were the major reason that their customers dealt with them. This meant that they cut margins to the bone and existed on a tiny profit. When I surveyed their customers I found that the quality of the goods they sold, plus the quick delivery and friendly service, they were already providing, were much more important to the customers than the price. Many of the customers I spoke to didn’t even deal with other suppliers and had no idea about prices except they seemed reasonable. The client was easily able to add in a modest price increase without affecting sales but with a big effect on profits.
So, how much you really know about your customers?
- Do they only buy from you or do they use several suppliers?
- How are their businesses going in this difficult post GFC and flood environment?
- Are your products, service, prices better than your competitors?
- Are there ways you could improve your service, product or delivery to make more sales and profit?
- What do the customers think about your business, big, small, professional, efficient, inefficient, rude, etc?
If you are not able to answer most of these questions you should seriously think about doing some research to find the answers.
GETTING THE RIGHT ANSWERS
Part of the problem is that if the owner or manager of a business does a survey of this sort they can’t really be sure they are getting honest rather than simply polite answers to the questions. So it is pretty much essential that you use someone from outside your business to do the job. Ideally someone who can probe answers to find the real reason behind a response, rather than a telemarketer simply taking yes / no answers!
I have developed a standard business to business market research questionnaire which I adapt to suit the business or industry and type of customers involved. This broadly covers all the information you want to know for general “How are we going?” and “How can we improve?” type research.
You don’t have to survey hundreds of customers! I find that with a careful selection of customer types that between 20 and 50 surveys can give good results and you can see trends emerging with similar answers that point to problems and opportunities.
The areas covered in this type of survey are:
- Customer information and broad classification
- Products purchased
- Reasons for buying from the supplier
- Rating of quality of goods / services versus competitors
- Reason for buying from competitors
- Product support service rating
- Range of products – all needed / more needed
- Problems experienced and how well they were resolved
- Pricing vs. competitors
- Promotional material – suggestions for improvement
- Advertising – comments / suggestions for improvement
- Website – comments / suggestions
- Image profile – big / small / friendly / rude / professional / etc
- Suggestions for improvement of product, services or business that would gain more customers or business
- Overall satisfaction score out of 100
As you can appreciate each survey can take some time but I have found that most customers are prepared to help, providing they see that they will benefit in the long term. They also have in my experience very good suggestions and ideas for improvement.
Markets and customers as well as the products available change over time and can be affected by disasters like the floods and economic changes. So I recommend that you look at a regular annual or bi-annual survey to keep your business on track and to monitor any changes you have made.
THE MARKET RESEARCH YOU SHOULD BE DOING YOURSELF
Accurate information is important for decision making in business so keeping track of your customer’s and changes affecting them is simply sensible.
You should be doing the following:
• Speaking to your customers. Take the time to ask them about their experience of your product or service; asking them about your competitors; finding out what is happening in their lives and their projections for their own businesses. Just regular friendly chats can provide valuable information.
• Simple questionnaires. Set up standard systems that allow your customers to rate your service and product out of ten. Ask them to make suggestions for change, which could make your overall product better for them. I always ask for criticism, rather than praise, explaining that if something is wrong, you can always do something to correct it.
• Customer Focus Groups. Assemble a representative group of your customers and ask them to help you by telling you how you should improve your product or service. This is an inexpensive way of keeping your product ahead of competitors in your market segment. Pay them for coming and entertain them well.
An alternative is the good old business lunch, to keep in touch with your
major customers and your fingers on the pulse of your market.
YOU NEED TO DO MARKET RESEARCH
As a business owner or manager, you need to be aware of the current situation and trends in your market among your customer groups and competitors. You should make this awareness part of your job and have a plan of action that provides you with this information. Anything less is like shooting blindfold.
Your Customers are a moving target, shooting at where they were yesterday, is going to result in a miss.
Informed decisions, based on a simple and inexpensive market research program, will help you to identify where your customers are today and to predict where they will be tomorrow.
That’s a real competitive advantage for your business!
If you would like a copy of my standard Business to Business MR Questionnaire simply contact me