Listen to What the Customer Says

Offering quality service to customers isn’t a mysterious process. Customers who interact with your organization every day are the ideal source for the feedback you need to stay in business.

That’s the verdict of Vistage customer retention experts JoAnna Brandi , Howard Hyden and Chuck Reaves . They say there are numerous ways to learn what your customers want; it’s important, first and foremost, that you take the time to listen.

“Teaching employees to ask insightful questions helps you form a vivid picture of your customers’ needs,” Brandi says. “It’s easier to be compassionate and empathetic when you know the whole picture.”

In the same respect, it pays to go out and observe customers in their “natural habitat.” Says Hyden: “Spend time with your customers. Get to know their business and ask them: ‘Is my product serving your needs? If not, how would you design it differently?’”

A surprising number of businesses initiate wide-ranging customer service programs without ever talking to their customers. According to Reaves, “Your internal records may suggest you’re doing a great job, but the only voices worth listening to belong to your customers. Find out what they want, provide it on a consistent basis and ask them how well you’re doing.”

“Listen and learn” sources include:

• Customers. For many businesses, the person who purchases your product or service isn’t necessarily the one who uses it. To get a clear picture, always talk to the end-user.
• Sales representatives. Often, sales reps are the organization’s eyes and ears. Based on their firsthand contact with customers, they are certain to have valuable insights for the business.
• Ex-customers. Track down former customers and find out why they no longer do business with you. This can be a valuable source of information. (A tip: Send a box of chocolates or a basket of fruit along with your survey!)

“Customer service is all about exceeding customer expectations as defined by the customer,” Reaves says. “To know what customers want and expect, you have to ask them!”

To Survey or Not to Survey?

Surveys are an effective way to gauge customer satisfaction about your products or services. They also can measure the importance customers place on specific characteristics of these goods — which in turn offers additional information on where to focus your customer-retention efforts.

“Surveys are relatively simple and inexpensive to use, but to be truly effective they must have clear and precise goals,” Hyden says. “Vaguely worded or broadly categorized surveys may generate a great deal of information, but very little of it will be useful.”

Certain factors influence customers’ responses to surveys:

• Phrasing. A question phrased in positive terms (“How satisfied are you?” vs. “How dissatisfied are you?”) usually provokes more favorable responses. The majority of customer satisfaction survey questions are phrased in positive terms.
• Timing. It’s often as important when you survey customers as what you survey them about. Studies indicate that surveys conducted immediately after a purchase evoke more favorable responses than surveys administered at a later time.
• Refusal to admit a mistake. Many customers believe that giving a low satisfaction rating reflects badly on their own buying habits. They don’t care to admit they’ve made a bad decision about a recent purchase. As a result, they often compensate by giving higher-than-average responses.

Because of their give-and-take format, focus groups can generate better information about customer satisfaction. They allow businesses to probe beneath the surface and get a clearer understanding of why customers perceive their organization the way they do. However, focus groups are time-consuming and more expensive than surveys to administer.

“Ideally, a combination of surveys and focus groups produces the best results,” Brandi says. “Remember, the information you gain helps direct your future customer retention efforts. Having satisfied customers is a good first step, but more effort is needed. Don’t equate satisfaction with loyalty.”

Feedback Is All Around You

Building a loyal customer base is like building a family or partnership. Like family members and business partners everywhere, customers want a say in what’s going on. When they are invited to “participate” in your business, customers commit themselves to a sense of ownership and loyalty.

Encourage management and front-line staff to take a comprehensive approach to gathering customer feedback. Instances include:

• Point of purchase. There’s no time like the present — the moment when the transaction is taking place. Ask the customer, “Was everything to your satisfaction?” Better yet, ask: “Was everything perfect?”
• Order forms. Include a “comments” section on your order forms, making it easy for customers to provide feedback. Try this on your invoices as well.
• Newsletters. Solicit letters from your customers and print them in your organizational newsletters. This demonstrates your interest in their attitudes and your desire to share their thoughts with employees and others.
• Toll free. For customers who live and work beyond local area codes, install a toll-free telephone number they can call with their comments and complaints. Encourage use of this toll-free phone option in your mailings and handouts.
• Report cards. Simple, easy-to-use “report cards” (like those used by hotels and restaurants) offer instant feedback from customers doing business with you. Be sure to offer the additional option of having them mail the reports back in a prepaid envelope.
• Voice mail. With today’s technology, there’s no excuse for not having a dedicated “customer feedback hotline.” Let your customers know that all messages on this hotline will be heard or read by senior management and by all employees with direct customer contact.

“Gathering feedback from a variety of sources results in an objective, comprehensive picture of who your customers are, what they want and how you can better serve them,” Reaves says.

Hyden adds, however, that collecting customer feedback is only half the battle. “All this data should be closely analyzed and shared with the staff in an organized, accessible manner. Otherwise, it’s useless.”

“Future historians are going to look back on this decade as the first decade of the 21st century in terms of human thought,” says David Houle “This is the time when we’re going to leave the legacy thinking of the 20th century behind.”

Houle, a renowned futurist, strategist, author and speaker, has dubbed our modern era “The Shift Age”—a period of rapid, disruptive change that first began in 2006. The year 2011 marks the beginning of the Transformation Decade, the first full decade of the Shift Age; over the next 10 years, says Houle, significant changes in technology, the global economy, human experience and leadership will dynamically shape the future of business as we know it. Today’s business leaders must reorganize and adapt or risk failure.

“If the world is changing its nature, shape, character, and form, then you as a leader must change your business,” Houle says. Below, we outline the key points of Houle’s timely and inspiring presentation—and what they mean for your business going forward.

1. Communicate Globally. “Globalization is no longer just an economic term, but a force across all aspects of society,” says Houle. We are truly global citizens, and businesses must reorganize accordingly. For the first time in history, no time, distance, or place limits human communication. The difference between a phone call to someone 10 feet or 12,000 miles away, for example, is only a few seconds. This new reality will permanently change how we conduct business and evaluate market strategies.

2. Separate Work and Place. We can now work from—quite literally—anywhere. Allowing employees to telework regularly will be a strategic advantage to CEOs and managers in 2011 and beyond. “I strongly say if you think a good metric is watching somebody be busy, you’re wrong. We’ve all learned how to be busy and do nothing. I have found companies that let their employees work from home more than two days a week are much more productive because the employees are grateful they have that ability,” says Houle. The office space no longer exists for information transfer (such as in the Information Age, when we needed to work in a wired office), but for collaboration. When people do come together physically, better, more authentic collaboration will occur.

3. Prioritize the Individual. The explosion of choice and the newfound ability to work from anywhere on the planet is shifting us toward an increasingly individualized worldview, and it’s having a dramatic effect on information exchange. “It’s all about my business, my Facebook, my website,” says Houle. “We have created an alternative reality and changed our consciousness.” Individuals now have two realities: the dominant electronic reality of their (computer) screens, and the less-important physical reality of place. We must reorganize the workplace and our products to adapt to the rising power of the personal.

4. Create Networks, Not Structures. Adaptability and resilience are essential to leadership in the Transformation Decade, says Houle. Structures are not adaptable; in the face of change, they break or fall. “If you want to build an organization, think of the concept of a net where your managers are nodes in a net and it’s all connected and it’s flat, it’s not hierarchal,” says Houle. “You have to forget titles if you want to do reorganization. If you want to increase innovation… Just close your eyes and think about the employee in your organization who shows up most innovatively every day.” Flattening the organization encourages innovation and enables collaborative reorganization.

5. Switch to User-Generated Content. Several decades ago, trust was institutional. Products were selected based on advertising content created by institutions. Today, trust is a personal matter; friends and networks recommend products, not institutions. Houle cites a study that shows a 1.5:1 ratio of believability in consumer-generated content vs. institutionally-generated content. Just as you must get rid of hierarchy in your organizational charts, your content and output must also reflect the flattening of authority. User-generated content is now king. In other words, if you put video on your website, make sure it features your customers talking to future customers—not you talking at them.

To succeed in business in 2011 and beyond, Houle believes all leaders will have to actively embody these transformations to best fit their business models. Leading-edge companies like Google and Apple already have; Houle calls these paragons of transformation “Morph Corps.”

Leaders of the next generation of Morph Corps, many of whom are from the Baby Boomer generation, need not fear that their roles will become obsolete in a newly digital world. If anything, quality leadership will be more important. Organizations like Vistage, where CEOs and key executives meet once a month, will provide critical, in-person collaborative opportunities. “We need that high touch,” says Houle. “It’s a human, necessary offshoot to the high tech.”

Who will lead in the Transformation Decade? Not surprisingly, the most successful executives of all will be those who can adapt at the personal level and exemplify true leadership. “[Baby Boomer leaders] need to stand down from thinking they know all the answers, and rather become the core culture… and drive the moral and value direction of the company.”