Monday, 31 March 2008

How much do you REALLY know about your customers?

How much do you REALLY know about your customers?

I recently met a new client who told me that he knows very little about his customers or the reasons they buy one product in preference to another. As shocking as this might sound, I’m almost certain he’s not alone. A great number of businesses we speak to can tell you all about their sales figures, about their average order values or about the number of new customers they have acquired. But when it comes to actually knowing what a customer thinks of them or perhaps more importantly, the business’ perception of themselves compared to that of their customers, then very few have a clear understanding of what makes their customers tick.

Perception mapping

In our experience, a simple solution to this problem can be to conduct a questionnaire to both internal stakeholders and a business’ customers and then analysing the results using perception mapping. Perception mapping uses survey data to provide a visual representation of the perceptions of diverse segments, in particular, highlighting key differences. It is particularly useful when analysing the differences in perceptions from a company and customer point of view in areas such as service levels and product quality. Perception mapping can help prove or disprove the perceptions or assumptions of a business and identify gaps in the service or product offering.

Are customer survey’s a little “old hat”?

People may argue however, that customer surveys are a little “old hat” or that they struggle to get significant enough responses to allow accurate analysis. Again in our experience, if the right questions are asked in a non-intrusive way, using the most appropriate medium and to the right customers (and by that I mean ones who have an existing relationship with the business), then response rates can be surprising. We have seen response rates from online customer surveys as high as 75% and that’s without offering an incentive to respond. Clearly it helps to have a very receptive and loyal customer base in order to see response rates that high but other surveys we have run on behalf of clients regularly get response rates in excess of 25% which gives more than enough accurate data to perform detailed analysis… providing enough questionnaires were sent in the first place obviously!

Questionnaires…a great way of getting customer insight

Questionnaires are also a great tool for cleansing or filling gaps in your customer profile information… without customers feeling as though they are being interrogated by the Spanish Inquisition. Any analyst will tell you that having information like date of birth, occupation or postcode in customer data is invaluable when it comes to accurate profiling and segmentation or building customer insight initiatives such as propensity models. By clearly stating the purpose of the questionnaire (i.e. to improve customer service or help with product development) and asking carefully planned, relevant questions, detailed information on customers can be built-up and incorporated into database profiles.

…And to conclude

So in summary, here are a few points to remember and some advice about the successful use of customer questionnaires and surveys:

• Planning – think about why you want to perform a survey in the first place. Is it to address a specific business objective, to prove or disprove a theory or to gather valuable profiling data?

• Relevance – Make sure the questions reflect the information you want to gather and that they are relevant to the customers purchase behaviour… there is no point in asking a question if no action can result from its answer!

• Objectivity – Try and make your surveys and questionnaire as objective as possible, after all you want your customers to be honest in their responses even if the results make for difficult reading.

• Channel – If all your customer interactions are conducted online or via email, then it’s a good idea (if not an obvious one!) to conduct a survey via the same channels. Online surveys give the added benefit of direction integration into marketing database systems without the need to data capture the results.

• Format – Complicated questions in a poorly designed format will only serve to dissuade customers from responding. Equally, complicated questionnaires with lots of free text will make data

• Analysis – Most companies would say that they analyse the results of the surveys they have conducted but in our experience, very few actually get the most from the data they capture. Using a specialist data analyst or customer insight company can really help unlock intelligence in data and help you get the most from a customer survey.

But what do you think? What response rates have you seen and how successful have your surveys been?

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