I try to avoid discussing market research when I’m out with friends. Over the years I’ve found that they simply don’t want to know the merits of a seven point scale – or whether the overall experience questions should be at the start or the end (I can go for hours on that particular debate). In fact the only time market research ever tends to crop up is when a waiter or waitress tries to get us to fill in a ‘how was your experience’ questionnaire. (Why do people snigger when I enthusiastically start reviewing the questionnaire?)
Last week however, market research became a hot topic.
A friend was proud to announce he had, that afternoon, received the results of his company’s customer satisfaction survey – and they were excellent. In fact, his area of the business was the best – a fact which had clearly made his week and he was telling anyone who would listen/was too polite to back away … slowly. Unfortunately, my inner market researcher escaped me and started a query about the research – the usual checklist: method, sample, timings, etc.
It quickly became clear that my friend’s results were indeed good – and the research was perfectly robust, except for the small issue of who had been asked to take part. Let’s just say it was a slightly skewed sample.
I won’t bore you with the details of the ensuing debate but I came away thinking about how often we in customer satisfaction research can get too narrow in our focus. In particular, this reminded me of one of the first major research projects I managed.
The client shall remain nameless, but I can say that when we started working with them they were in an awkward situation. They had amazing customer satisfaction scores – 85% of their customers rated them as ‘excellent’ on every single aspect on a long questionnaire, approximately 60 statements. Yet despite these amazing levels of satisfaction, they were in severe danger of going bankrupt as they simply couldn’t get enough repeat business.
In fact, when we looked at their historical data there was a clear story – as satisfaction went up, the customer numbers came down, leading to some interesting conversations! After some investigation we came to the simple conclusion – they were offering the wrong service.
The truth was that the service did have an appeal – but to a defined, niche group. The vast majority of the population weren’t satisfied and were moving elsewhere. As the unhappy customers left, my client was increasingly interviewing a small ‘rump’- who loved what they received, but were too few in number.
Working with this particular client taught me a huge lesson in how to manage and design customer experience research programmes. So often, the temptation is to adopt a narrow view by only researching the clients’ customers and ignore that of their competitors’ – focussing on making sure our client’s customers get the service they need to be (and remain) extremely satisfied. As the satisfaction scores steadily rise we pat each other on the backs and celebrate the successes, dreaming of the improving share options and that Barbados beach retreat.
Yet in doing that we are ignoring the world around us. Our focus becomes so slight that we fail to see the whole picture – and if we can’t see the wider business and market contexts, how can we make the right decisions about what to do? We may know what our customers think of us, but what do they think of our competitors, how do our competitors’ customers rate them? Is it something to celebrate if we move our score 10 points from 75 to 85, but our competitor moves the needle further, or has a higher score than us anyway? In fact, what should we even be aiming for ‘very good’ is fine if your competitors are weak – but not if they are excellent and their performance is markedly better than your own.
This also leads me to my next worry that of the increasing and I might hazard the over-use of transaction-based research. Don’t get me wrong, I think there is a huge role for transaction-based research and I wholeheartedly support any client who wishes to embark on it. But, it has a role – in measuring how your customers feel about you the experience you provided. It won’t really tell you how you compare to others, or how people feel about others – in short, it’s no replacement for a market-wide review and shouldn’t be used as such.
Ultimately, I believe we need to make sure we include the wider view when we examine the customer experience. We need that context.
This needn’t be prohibitively expensive or difficult to do. Simply comparing satisfaction trends to our client’s customer/sales data can show you whether the increased satisfaction score appears to be driving customer numbers, or if something else is going on. Most clients will also have some form of market share data – and probably some form of U&A study which can put the satisfaction scores in context.
And when we design new customer experience programmes, we should look to ensure the programme gathers perceptions of competitors – even if it appears an added layer or complication that the client isn’t interested in. The inclusion of a competitor context gives results a whole new angle and can be the difference between identifying a ‘strength’ and a true market advantage.
We should also try and gather an understanding of the view of lapsed and non-customers – why aren’t they customers, what caused them to leave? Is there something about the current experience that is keeping them away?
We never got to truly examine these wider aspects with my first major client – they went bankrupt too soon. But I wonder whether they would have done had they looked at the wider picture from the start and understood how the experience they offered matched the needs of the market and analysed their competitors rather than pursuing a continuous increase in satisfaction.
Simon Wood is Head of Stakeholder Management Research at TNS UK.
The views expressed in this blog posting are the author’s own, and do not necessarily reflect the views of TNS, nor of its associated companies.
