Business is about selling. Everything else, including the whole process of production, management, and even marketing, is basically sales support. It all comes down to persuading a customer to give you money – and to go on doing so. So it is astonishing how little most businesses actually know about their customers and how little trouble they take to relate to them.
Your customers define your business, and not just because without them you are nothing. Their needs form your bedrock and their desires shape your future. The key to a solid business is to make them feel closer to your business. This involves finding out what they feel and want.
This guide covers two separate but inter-related areas:
Define your objectives
Before you start contacting customers or asking them any intrusive questions, you must be careful to define your objectives clearly.
Customer relations
Customer relations has several objectives, more or less in the following order of priority:
Customer relations is a continuous ongoing process whose principal tool is communication.
Customer research
Customer research tends to be based more on discrete projects, each of which may have one or more of several different objectives:
Note that customer research, unlike customer relations, usually embraces potential as well as existing customers.
Do not expect your customers to come up with all your ideas for you. They are most likely to respond if you present them with a range of options. Having said that, if they do come up with ideas on their own, look at them seriously. If a lot of people bring up the same issue without prompting, there could be a major problem or unmet need out there.
Customer relations
Talk first
To understand your customers, you need to talk to them whenever you have the opportunity, whether they are direct clients, consumers or intermediate resellers. More importantly, encourage them to talk back. At every contact, try to get them to open up a bit. Be friendly, but not intrusive or long-winded.
Ask if they have any problems or suggestions –
Be open to criticism, so do not try too hard to defend yourself: this is not a debate to be won, but an opportunity for you to learn and to show you are willing to learn.
Following up
The first indication many businesses have that a customer has a problem with them, is when they realise that they have become an ex-customer. The challenge businesses face is the British dislike of complaining. People would rather avoid any embarrassment by dropping you without a word.
The solution is proactively to ask customers if they are happy with their purchases and whether they have discovered any glitches. This may involve after-sales support, such as a follow-up phone call, which is actually customer research in the guise of customer relations.
Customers can tell you about:
In many cases, you may be able to address these through another part of your organisation or by recommending a colleague or associate business.
Of course, what you will hear from customers is not comprehensive, systematic, measurable, or even reliable – for one thing, people tend to say what they think you want to hear. It is, however, the most important source of information your business has.
Don’t rely on memory. Keep a customer contact book and take notes of each comment they make. Better still, use a customer database on your computer so everyone can share the information.
Listen
Hold regular meetings with your staff, at which one of the items should be a report on what they are hearing from customers either in work or socially. Much of this is little more than gossip, but if the same things keep coming up, take notice. Act on what you hear. In particular, be prepared to feed it into product development.
You may also hear things that cause you to alter your actual marketing strategy. Do not be too proud to change.
Customer research
Customer research is just one discipline within market research. It aims to provide both hard factual data and less tangible feedback or feelings:
Such data tells you little on its own. It is how you interpret it and the building picture that matter. Check how much other information you can find out in-house.
For example, the knowledge that most of your customers employ less than five people may appear irrelevant at first glance. However, knowing this, you will begin to understand the mindset of the owner can’t afford to have people away from their desks for an extensive three-day training course. So you might change the way you deliver courses to make them telephone-based.
Other data can help you target your marketing more precisely. For example, asking new customers how they first heard of you – an advert, article in a magazine or word-of-mouth – will help you track the effectiveness of your marketing efforts. And analysis later will show which media to target in your next campaign.
Types of customer research
There are two basic types of customer research:
The former is of greater use in gauging what people actually think, but depends on good analysis. The latter gives an air of certainty, albeit often artificial, which can be useful in convincing others.
Can you do it yourself?
Like most business disciplines, market research can benefit from specialist skills and experience. Hence, some people maintain that market research is best done by experts. Knowing how to design effective questionnaires, how to get the right sample, how to contact people and get a good response rate, and how to interview in depth or work with a focus group are all specific skills that most business owners and managers do not have.
Most market research firms have their own way of doing things. This is often a closely guarded secret. It is also difficult to find out which firm’s approach is right for you. Moreover, as with any form of consultancy, it can be hard to tell the professionals from the charlatans.
Research firms are often expensive and while their services may well be worth the money, they are usually out of reach of most small businesses. Hence you may be forced to do your own market research instead. This is not as difficult as research firms would make out. A great deal depends upon common sense.
You can gain enormous benefits from even simple techniques and projects. The key is always to be alive to the need and opportunities to gather information from all sources.
Firstly, you can find out a good deal of very useful information from basic desk research. Before you even get down to talking to customers, for example, your database and management accounts should be examined for information.
Questionnaires
Questionnaires are the main tools of customer research. They can also be used as a supplement to customer relations, but should never take the place of talk. They may be sent or given to the customer, or filled in by an interviewer. They can be delivered by a variety of methods, such as direct mail or email.
Questionnaire design
A good questionnaire is:
Questionnaire analysis
Above all, questionnaires should be designed with their ultimate use in mind – analysis.
If your research is quantitative, use tick boxes or points systems (4 = excellent, 1 = poor, and so on) which can be analysed on spreadsheets later.
If it is qualitative, leave lots of space for personal comments. Do not restrict replies to your own categories so include a category of ‘Others (please specify)’.
Testing your questionnaire
Prepare a ‘dummy’ questionnaire and send it to a few colleagues to fill in. Listen to what they think of it. Clear up any ambiguities – you may know what you want to know, but others do not. Check that your questions ask for the answers in the form you want. Put ‘male or female’ rather than ‘sex’, for instance.
You can use these responses as test data for a ‘dummy’ analysis, using a spreadsheet if your research is quantitative.
Making contact
Once you have decided what you want to ask, you must put your questions in front of the people you want to ask.
Mail surveys
Mailed questionnaires do not usually get a good response unless a large number of people happen to feel strongly about a given issue. If you receive such a response, you would do well to take notice.
You can increase responses by offering an incentive, or a prize draw, and by enclosing a pre-paid or freepost envelope. You might also consider making responses anonymous to get more honest answers.
Target your mailshot carefully. You may decide to mail just existing customers, or you could include dormant or ex-customers. You will then have to decide whether you want to mail all of your customers, a random selection or a specific group – individual buyers, say, or retailers.
A word of warning: people who take the time and trouble to fill in and return a questionnaire are a minority – and therefore not necessarily typical of the majority.
Email surveys
Email surveys may get you a better response than a letter, but bear in mind that:
Telephone interviews
Telephone surveys are much more laborious and expensive but can provide much richer feedback. The key to telephone canvassing is to have a good script and to stick to it. However, telemarketing is increasingly seen as intrusive too, and those who reply will, once again, not be typical of the majority of people, who will want you off the telephone as quickly as possible.
Face-to-face interviews
Face-to-face interviews can take many forms. At one end of the spectrum a researcher with a clipboard approaches customers as they leave your shop, say, and runs through a closely defined script with prompts.
At the other end is the in-depth interview in which a highly trained interviewer encourages the customer to speak at length for half an hour or more. Unlike the in-shop situation, this process is designed so that the questioner will say relatively little.
There is a range of variations between these extremes. Bear these general points in mind:
Focus groups
Focus groups are managed group discussions. A typical exercise will involve groups of six to eight people who represent a cross-section of customers – current or potential. The ideal focus group will have the air of a brainstorming session. A trained moderator will draw out the shy, check the dominant, and introduce new information and key questions at appropriate points. For many such reasons, focus groups may best be conducted by experienced professionals.
The criticisms that apply to face-to-face interviews apply doubly to focus groups. What sort of people would want to take part in such a discussion? Can the result be anything but artificial? On top of this, there is the distortion of the social dimension. Some people will want to impress the members of the group, or not offend them, or defeat them in argument, or dominate, or do any one of a thousand other illogical things people do when they interact in groups. They will not be thinking and acting as they do when deciding whether or not to buy your product. Nevertheless, many organisations find such research extremely useful.
Analysis
All this research is pointless unless it is analysed – and used. Everything should be designed with that analysis in mind. So establish in advance:
If it is to be worth the effort, the results should impact on every aspect of business planning and strategy. Not least will be the lessons such exercises teach you about the direction of your future marketing.
Developing relationships
Developing a relationship with existing customers can itself be an adjunct, possibly an alternative, to formal market research.
For example:
Above all, establish a two-way relationship. This means:
As well as being an excellent resource for market research, customers will appreciate the fact that their opinions are seen to be valued.
