Transforming Market Research into Customer Satisfaction and
Retention
Services managers have a difficult enough time managing their organization’s day-to-day services
operations - but, after all, that’s their job, isn’t it? What generally is not their job, however, is spending
their time conducting research, analyzing customer survey data, gathering competitive intelligence and
the like - that’s someone else’s job (generally either an in-house department, an outside market research
and consulting firm, or a combination of the two). Still, management needs to at least have a good
understanding of what market research tools and resources are available to assist them in making better
decisions for supporting their existing - and identifying prospective - customers. Read on to learn how to
make the right choices for transforming market research into customer satisfaction and retention!
What is “Market Research”?
Webster’s New Millennium Dictionary defines market research as “the investigation and analysis of
consumer needs and opinions about goods and services.” While this is not a bad start, it leaves out some
of the key issues that directly impact the services industry. The American Heritage Dictionary
introduces a key ingredient into the mix by defining market research as “The gathering and evaluation of
data regarding consumers' preferences for products and services”. However, this definition also falls
somewhat short. Thefreedictionary.com is the first to incorporate the concept of the service transaction by
defining it as “Research that gathers and analyzes information about the moving of good(s) or services
from producer to consumer”. Each of these definitions are basically on the right track; however, we prefer
to define market research much more broadly as “The data collection, analysis and assessment relating
to customer needs, requirements, preferences, expectations and perceptions with respect to the goods
and services they acquire and use”.
Measuring Customer Satisfaction Is Important - But, How Do You Do It?
Services businesses tend to define “customer satisfaction” in a variety of ways. We have found that the
most commonly used surrogates for measuring and tracking customer satisfaction are typically:
 Increased sales/account revenues
 Increased profitability
 Repeat services sales/contract renewals
 Improved levels of customer retention (i.e., reduction in “lost accounts)
However, not all of these measures may be either relevant - or accurate …
 Sales/account revenues may grow simply as a result of inflation and/or increasing services prices.
 Increased profitability may be more a result of improved internal services operations and/or costcutting.
 Repeat accounts may be more the result of customers feeling “locked in” to existing service contracts,
or believing that it is easier to “re-up” than to try to find a new vendor.
 Customers may stay with you longer than they want, because it is “easier than switching”.
As such, the primary goals of a Customer Satisfaction Measurement & Tracking program should be to …
 First, identify the specific product and service attributes that are proven to be important to customers;
 Provide baseline measurements of both importance and satisfaction for future trend comparisons;
 Determine the relative strengths/weaknesses of the organization’s products, services and support
offerings;
 Identify the critical areas requiring improvement;
 Collect data that can be used to set targets and goals; and
 Provide a scientific and statistically valid means for measuring and tracking customer satisfaction.
How Should You Design Your Customer Survey Program?
When considering the core components of your organization’s ongoing Customer Satisfaction
Measurement & Tracking program, there are four basic questions that must be addressed and, ultimately,
answered:
Q1:
Does your organization already have a formal customer satisfaction measurement & tracking
program in place? If so, is your existing survey research plan designed to yield the specific types of
data and information outcomes that are needed to support the organization’s business plan?
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Q2:
Should you conduct your customer surveys internally, or should you use an outside market
research/consulting firm to design, conduct and analyze your surveys? Which methodology will
yield more actionable results? Which way is better?
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Q3:
By conducting your customer surveys internally, you may lose the perception of objectivity and,
thus, credibility; plus, you run the risk of administering what may appear to your customers to
be either an “unprofessional”, incomplete - or even worse - misdirected survey.
An outside market research firm generally has the ability to design, execute and analyze
surveys more efficiently than your organization - and can maintain an entirely objective posture
throughout the course of the research (e.g., collecting and analyzing responses).
Most internally conducted customer surveys turn out to be little more than exercises in PR, and
generate neither statistically valid nor actionable survey outcomes; in cases where service is
currently poor, or major improvements are required, it is generally better to go outside.
What type of survey methodology should we use? In person, telephone, mail, e-mail, or a
combination thereof? How can we tell what will work best with our particular mix of services
offerings and customer base?
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Q4:
Some organizations have no formal customer satisfaction measuring & tracking program;
surveys are performed only on an ad hoc basis -if at all!
As a result, customer service improvements are probably not supported by customer data in a
consistent manner, or with all of the necessary data and information to justify making changes in fact, some problems may go unnoticed, and realistic priorities may not be easily set.
If the research plan is not specifically designed to support the subsequent action plan, then you
may end up not having adequate information to make key decisions.
Alternative survey methodologies may reflect substantially different levels of costs, coverage,
response rates, statistical reliability and skewness, effectiveness, usability of outcomes, and
applicability to the overall business plan.
Accordingly, the methodology you choose will dictate - to some degree - the likelihood of
generating actionable survey outcomes.
E-mail surveys have become relatively inexpensive to conduct, but may not be the best way to
reach all of the customer base that you want to reach; telephone and mail still represent the
preferred methodology for most organizations.
Should we be surveying only our existing customers, or should we be focusing more on surveying
the market prospects that we hope to convert to customers in the future? Where should we be
focusing our market and survey research efforts in the short term?
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The answer is “yes” - to both!
In general, customers always come first - you can’t afford to lose the customers you already
have (for any number of reasons).
However, you may also want to survey the general market base (i.e., prospects) in terms of
their awareness and perceptions of your organization, as well as the likelihood of their
buying/acquiring your products and services.
As a surrogate, you can also survey “New Wins” and “Lost” Prospects” in combination with
existing customers to determine what brought them in - or what drove them away - in addition
to what makes them happy.
Why Even Conduct a Customer Satisfaction Measurement, Analysis and Tracking Program?
It is a critical step toward acquiring a better understanding of customers’ needs, requirements and
perceptions of your organization’s performance. And, it is a necessary process for any organization that
desires to:
 Improve its product, service and support offerings,
 Keep its customers satisfied and “in the fold”,
 Improve its overall and targeted market image and position,
 Expand/cross-sell its existing customer base, and
 Penetrate new customers and markets.
Why Start Now?
The main reasons for starting your market/survey research programs in the current timeframe (if you
haven’t started already!) are:
 Your targeted markets continue to grow, and your customers’ needs and requirements are constantly
changing;
 The market’s requirements for “total services and support” are growing dramatically, and your
competitors’ capabilities are growing just as fast; and, as a result;
 Your organization needs to be able to position itself as the “vendor of choice” among a larger, more
targeted and prioritized customer base.
Things to Consider When Moving Forward
The basic things you need to consider when moving forward with your Customer Satisfaction
Measurement & Tracking program may be summed up as follows:
 Customer Satisfaction and Customer Retention go hand-in-hand - but they do not necessarily
guarantee one another.
 Market/Customer Surveys are useful tools that can identify what’s out there, what works, and what
needs to be fixed.
 Services Providers need to understand their customers better: who they are, what makes them “tick”,
what “ticks” them off, and how to make them happier.
 You cannot rely solely on the reality of internal performance data; you will also need to research and
analyze customer needs, wants, requirements, perceptions, expectations and opinions.
Market research is important, and it is a tool that can be used to help your organization meet its goals for
improving customer satisfaction and retention - but, only if it’s designed and executed effectively. You
may also need some help, rather than going it alone - but the time to get started is now!
Until next month, keep your customers satisfied!
Bill
William K. Pollock
President
Strategies For GrowthSM
P.O. Box 1024
Westtown, PA 19395
USA
Tel: (610) 399-9717
Fax: (610) 399-9718
E-Mail: wkp@s4growth.com
Website: www.s4growth.com