It’s always interested us how a simple resolution of a customer problem results expo-nentially in retention and increased business, which directly impacts the customer lifetime value (CLV). If you assess your performance against your customer expec-tations, you’ll add value to your offerings.
There’s a story in customer service folklore about the man who walked into a Spokane, Washington, bank and asked to have his parking ticket validated. The teller looked at the senior citizen dressed in worn, faded blue jeans, plaid shirt with a torn pocket, well-worn dirty boots, and a stained Resistol cowboy hat and asked if he had conducted business in the bank. “No,” the man replied. “I just came in to get my parking validated.” The teller informed him that the validation was only for customers conducting transactions. Did the man have an account with the bank?
He did. “Then you should know the rules,” the teller advised him.
The customer asked to see the manager. “Gone to a meeting,” he was told.
What about the assistant manager? “At the same meeting,” was the reply. “I’ll wait,”
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the man said and he sat down in one of the lobby’s chairs. Thirty minutes later the manager returned and seeing the man sitting there, walked over and greeted him.
“Good morning, Mr. Miller. What can we do for you today?” The customer’s response was that he wanted all of his accounts closed and the money transferred to a rival bank. As the story goes, the accounts represented more than $4 million and almost 10 percent of the bank’s total customer deposits. Mr. Miller was one of the largest ranchers in the area. For a one dollar parking ticket validation, the bank lost millions in deposits.
Should the bank teller have bent the rules? After all, rules are rules. The teller was correct. The bank’s policy was parking validation only for customers conduct-ing transactions. The customer’s expectation was unreasonable, given that rule.
Should the bank have had a different set of rules for customers based on the sizes of their accounts? Would the teller have bent the rules had he or she recog-nized the customer for who he was? Or should all customers be treated equally?
Should the bank have made the rules clearer so the customer wouldn’t have had an unrealistic expectation? Or should the bank be more flexible to meet customers’
unspoken expectations? What’s your answer?
If employees truly understand your business—which means your value com-mitment, customers, and operations—they need to be able to make judgments in cases that may seem outside the strict interpretation of the business rules. Given that caveat in this case, the teller would have recognized the poorly worded busi-ness rule and made the judgment to validate the parking ticket. It makes one won-der whether the bank trained its employees to use judgment.
We might also argue that, if the bank truly knew its customers, it would know that they were using the parking lot on occasion for other than bank business. Per-haps the bank should encourage its customers to park in its lot free of charge as a convenience while shopping in the neighborhood. This would also benefit other area merchants.
Whatever your answers to these questions, the bank should have had a better understanding of its customers’ expectations, and its customer value commitment should have been designed accordingly.
It can be beneficial at times to invest in primary research to gather data in addition to that provided from internal or customer sources. The function of this research is to gather data where none exist, to supplement the data you have, or to validate the current data.
Historically, marketing managers and marketing researchers haven’t made good bedfellows. The marketing managers unrealistically expect the research to provide answers, and they often don’t understand the time line, complexities, and nuances of valid, reliable research. The key to obtaining relevant data that can help validate your success in delivering customer value is to manage and be involved with the marketing research process rather than handing it over to a researcher to pro-vide the “absolute” answers.
The first step in managing customer and market research is to decide what business decisions can be improved meaningfully by the results of market/customer research. This will identify when such research is needed to discover relevant infor-mation about whether or not customer value expectations have been understood and met.
Also, customer and market research can be useful in terms of validating the informal data. This requires a clear understanding of how the data will be used in your decision making, so that you and the researcher can define the scope of the research project. Customer and market research can help if a company wants to understand the needs and satisfaction levels of potential customers (with whom it does not currently trade) or to obtain an objective benchmark of performance rel-ative to competition.
The second step is to collect and analyze secondary data; this is information that has been gleaned from existing sources outside your company. Secondary data include obvious sources from the customers’ industry like trade publications, indus-try association data, indusindus-try analyses, and customer press releases about won busi-ness, especially if you weren’t the supplier selected. In some cases, these data will answer your questions. More often than not, the secondary findings provide addi-tional questions that need to be answered and/or validate the research design.
Once the research objective has been formulated and the secondary data scanned, identify knowledge gaps relative to the business decisions to be made and write the specific research questions that need to be answered. You should share responsibility with the market researcher for developing and approving the research method, whether it’s in-depth interviews, surveys, or customer focus groups, for example, or a combination of data-gathering methods. Understanding the design and its intent makes it easier for you to understand the data and apply them in the decision-making process.
Whatever you do, don’t prevent the customers from expressing their real views and opinions. Many customer research programs utilize closed questions and checklists, often internally developed, for misguided reasons of expediency, cost limitation, and ease of analysis. The result is usually a misinformed supplier and a frustrated customer. Your customer survey should include open-ended questions to allow customers to identify what they see as the key priorities and areas of unsatis-factory performance.
Be prepared to support the research with a financial commitment. The bud-get should not be established on the basis of cost justification, that is, the question to the researcher shouldn’t be “What kind of research can we do for $10,000?” The question should be “What do we have to spend to learn what we need to know?” If it takes $10,000, but the resulting profitability from the customer value segment increases by $100,000 annually, that’s a good return on investment. If it takes
$50,000, but the resulting profitability from the customer value segment increases by $100,000 annually, it’s still a good ROI.
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The next step in a customer and market research process is selecting the sam-ple. The research objectives and project design could require an investigation of all of the customers in the customer value segment or simply a representative sample of customers.
With the sample identified, the data can be collected. An important hint for this stage of the research is to not send the researcher away with a mandate to do his or her “voodoo.” Stay informed about the data collection, obtain reports of preliminary findings, and be involved actively in ensuring the research is achiev-ing your objectives. In addition to fundachiev-ing involvement, it makes sense whenever possible to participate in the data collection. In this way research findings will come alive to the management team as they have heard and seen firsthand responses from customers. It’s also a great way to build relationships directly with customers.
Once the data are collected, the researcher analyzes and interprets the data.
Again, that doesn’t mean the researcher is going to provide answers to the research questions. It means that the researcher will help organize the data points and look for relevant indicators. Make sure that you understand what the data indicate and their relevance to your decision-making needs. Be able to explain some of the more technical nuances of data collection or data reduction and analysis.
The last step in managing the research process is to integrate the data into what is already known about customers’ reactions to the value you believe you have been delivering. Never forget that decisions are made based not only on data, but also on intuition and experience.