Customer feedback - improve or lose.

We have all read the statistic about an unhappy customer. ‘If your customers are happy they will tell three other people, but if they are unhappy they will tell nine.’

In fact if they are very unhappy only about 4% will pro-actively complain to you so you won’t necessarily get to know about it at all and they will simply take their business elsewhere.

Although we all talk about finding out what our customers really think, the reality is that very few of us actually do this and yet it is key to on-going business success. Of course we all have both internal and external customers, either of which we ignore at our peril! In this month’s e bulletin we intend to focus on how we optimise feedback opportunities with external customers and will address our internal customer challenges in next month’s edition.

Understanding external customers is vital because the cost of losing a customer can have a huge impact on the viability of a business. Whilst all organisations need new customers, there are huge benefits in keeping hold of our existing ones;

• The cost of winning 1 new customer is 10 times that of keeping 1
• Loyal customers learn to value you and your services rather than just your prices
• If we enjoy a positive relationship with a customer it is much more difficult for competitors to attract them away
• With existing customers there is more opportunity to interest them in the other products and services we may have to offer
• Customers who are happy with you are likely to tell 3 other people, which means you can reach 3 potential new customers without incurring any marketing costs
• If you have a positive relationship with your customers you have a greater opportunity to capture feedback….

… And feedback means improved products and services, which will increase the opportunity both of gaining new customers and of retaining those existing ones!

Having established the benefits of keeping our existing customers, how do we capture this invaluable feedback that helps us retain them?

At QED we use a number of methods tailored to the audience and objectives.
This can be informally from our sales force, delivery team or from unsolicited letters. Complimentary to this is a more formal, structured process of capturing feedback which allows comparisons to be made over time using:

• Focus groups
• Customer surveys (telephone, face to face, online, post or a combination of these)
• Mystery shopping
• Project close out processes

Getting this feedback is only half the job. What are we going to do with it once we have it?

If used appropriately it could prove vital in informing and shaping organisational decisions and have a real positive impact on the bottom line. If used inappropriately it could have a more damaging effect than by not doing the survey at all. Feedback responded to proactively can result in customers telling 5 other people about what you have done to resolve the issue. This is of course one of those continuous circles of improvement.

So the secret to keeping your customers is to get feedback, respond to it efficiently and effectively and to regularly and proactively survey for changes in their perceptions.

In next months E bulletin we will be exploring how to, and the importance of listening to our internal customers.

If you would be interested in talking to us about how you could optimise customer feedback please contact Bobby Singh on 01302 761222 or take a look at our Research and Evaluation Services