17/10/2011

By Adrian Swinscoe, Director, RARE Business

I was with a client on Thursday and we were chatting about his business when he received a call from a person who wanted to conduct a customer survey saying that it would only take a few minutes.

I don’t know about you but when I have received calls like this in the past the few minutes has, invariably, turned into a lengthy series of questions about my customer experience, which often leaves me a little annoyed and feeling that I have been duped somehow. This got me to thinking about this approach and what impact it has on customer relations, repeat business and overall business growth. Could it be that when firms, despite their good intentions, extensively survey their customers they potentially drive them away? Thinking about this a little more reminded me of a book I read a year or so ago called The Ultimate Question by Fred Reichheld.

In the book Mr Reichheld advocates that all customer surveys can be boiled down to one central question: As one of our customers, how likely is it that you will recommend or refer our company to a family member, friend or colleague?

That may be an extreme approach but I think there is real value in this idea and I have been advocating the use of the following approach with my clients:

Question: Are you happy with the product/service that you received from our company?


If No, then ask: So we can learn, could you tell us how we could get better?

If Yes, then ask: Would you be willing to recommend us to a friend, family member, colleague etc?

This is, essentially, based around a customer insight that says that customers judge your performance based on what they are an expert which is not necessarily what you may an expert in.

Let me explain:

Example 1: If you are a restaurant, the restaurant experience could be great but if the toilets were a mess and unhygienic then what impact would that have on the overall customer experience and their view on how happy they would be with your service. What would they then think of you as a restauranteur?

Example 2: If you are an accountant, then the thing that the client will measure you on is likely to be associated with how quickly you return their calls, how helpful you are, how you demystify tax and accounts and how much money you save them on their tax bill. Or, maybe, even who you introduce them to to grow their business.

This approach is based around the idea that there is such a thing as good and bad profits, where good profits are those that come from customers that are happy and refer you onto other customers and that bad profits are associated with disgruntled customers. Understanding this balance is therefore the goldmine to understanding the growth potential in your business. He goes on to say that understanding this balance is the only thing that businesses should be focused on with regards to their customers.

More on this later but for now ask yourself two things:

1. Are you surveying your customers? If not, then why not start but keep it simple.

2. If you are then ask yourself is it too complicated and is it turning people off and limiting your potential for repeat business and referrals?

Let me know your thoughts.


Adrian Swinscoe is Director of RARE Business - adrian@rarebusiness.co.uk

www.rarebusiness.co.uk
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www.adrianswinscoe.com