Best practice guide: Using cost-effective research to improve the customer experience

This is the third piece of a series on improving the customer experience. The first (Four ways to get customer experience on your CEO's agenda) focused on what managers need to consider if they are trying to elevate customer experience to the strategic level and be part of the CEO's agenda. The second (Four ways to improve the customer experience on a shoestring) suggested how to get started on improving the customer experience tactically, using internal sources of information about what customers want. This third and final piece complements the second, suggesting how that foundation of insight can be built on using low-cost but effective customer research. 

Last week's article highlighted how much valuable 'voice of customer' insight resides in the memory of front line sales and service people. But relying on what can be remembered is risky – memories fade, people leave and key insights are lost. Any business that seeks to consistently improve the service it provides its customers needs to establish a process for capturing customers' observations and suggestions on an ongoing basis. 

These insights can be collected using a web survey if customers self-serve, or by asking questions as part of the closing process of telephone conversations conducted by customer service reps, or by account managers asking the same questions in the course of visits to their customers. In each case, the comments need to be systematically collated and reviewed.   

For these research initiatives to work they need to respect the customer's time. This means keeping it brief and making sure that the focus is on the customer's interest. That ensures that customers see the link between giving their time and enjoying higher levels of service. 

Three questions should suffice:

The balance in favour of questions seeking descriptive answers is both deliberate and critical. The trap that much customer research falls into is a pre-occupation with capturing quantitative rather than qualitative data. The obsession with measuring has generated the curse of 'qualiquantification' – the translation of qualitative information into quantitative data to enable aggregation and graphical display, in the process of which all valuable insight (and therefore the opportunity to improve) is removed. 

As web analytics guru, Avinash Kaushik, has pointed out, the best that quantitative data can do is tell you what happened, but not why, whereas qualitative insights enable a business to enter the heads of its customers and gain those 'a-ha' moments about why they do what they do. Collected on its own, quantitative data is akin to Shakespeare's description of alcohol (as described by the Porter in Macbeth). "It provokes, and unprovokes; it provokes the desire, but it takes away the performance." 

Most important of all, questionnaires seeking scores on every dimension of the company's image and performance are time-consuming and repetitious for customers to complete, yet give them very little benefit in return – highlighting areas for attention, at best. At worst they are likely to be totally useless, boredom producing unconsidered and almost random responses. (The customer experience of customer research is the subject of a previous piece, Six tips for customer experience-enhancing customer research).

Collecting 'voice of customer' comments should deliver enough insight to generate hypotheses about the experience that customers want and how well the business is delivering against that. Validating these hypotheses requires targeted customer research – targeted in terms of both which customers are included and what insights are sought. Once again the objective should not be seen as generating a baseline score, but deepening knowledge about what creates genuine value for customers. 

In terms of getting the basics right – eliminating the drivers of dissatisfaction – the most valuable starting point is to conduct research with 'lost' customers to understand their reasons for defecting. The first answer given to a question asking customers why they have terminated their contract, just ceased providing custom or markedly reduced the business they transact is often misleading. Drilling down to the real reason requires the use of root-cause analysis questioning which typically involves asking 'why?' five times. (Please see Customer retention strategies: How to keep churn in check for a more detailed explanation of root-cause research and an example).

When it comes to identifying service enhancements – those where the intention is to start moving from satisfaction towards delight - a good starting point is following up on 'voice of customer' comments, particularly with any who made suggestions about service improvements or product development requests. These customers have already shown a commitment to the relationship by providing feedback so will probably be willing to commit more time, especially if positioned as seeking to understand more about their request. 

Rather than ask them a broad range of questions, the focus should be on asking 'why?' they have made a particular suggestion or requested a specific offer or service enhancement – what it would help them to achieve. And as with root-cause analysis, it is important to keep asking 'why?' until the value it delivers is clear (in both form and quantum, ideally). 

Asking customers what they want is fraught with challenges. The first risk is that they will come up with a laundry list of features with little prioritisation in terms of the value each would deliver and no accounting for the likely cost of incorporation into the product-service offer. (Customers are generally not experts in their suppliers' businesses). Meeting such requests typically results in a functionally rich offering that is too expensive for the customer or too unprofitable for the business. The second risk is that customers' expectations are reset by the responses they provide. As a result, any new product or service introductions will only, at best, meet expectations. Worse, given cost considerations, there is a high likelihood that enhancements introduced will fall below raised expectations. 

A more valuable and less risky research approach is to focus on the outcome that the customer is trying to achieve. This is where the simple question 'why?' is incredibly powerful. Firstly, repeatedly asking 'why?' reveals latent as well as explicit needs. Secondly, it does not raise expectations of what the business will provide. Once the desired outcome is understood, the value of the customer's achieving that outcome can be roughly calculated. It is then a matter of working with other teams in the business to meet the latent needs at a price that is economic to both parties.

The most effective way of understanding what outcomes customers are seeking is observing all the interactions they have with the business, both with its products and staff. Given the large numbers of clients in B2C markets, this typically requires the services of a specialist market research agency. These agencies typically employ a range of experts – ethnographers, human factors experts, designers and engineers. But much can be achieved using employees, especially in B2B markets where the customer base is more concentrated. Obviously this cannot be done for every customer, so selectivity is critical. Rather than choose representative customers, seek to visit the successful – those seen as market leaders. Because others will emulate them, these companies provide the best template for where the mass will be. 

The best way to do this involves taking a cross-functional team to visit a customer, and observe every interaction from the customer's point of view, with the simple objective of identifying how each interaction experience can be improved by: saving the customer time, reducing production costs, increasing convenience, reducing risks, etc. The whole interaction cycle should be observed, starting with how an order is placed and recorded in the customer's ERP system, through how products arrive at the customer premises – how they are unloaded, stored and unpacked – to how they are incorporated into the customer's production process, how invoices are processed and when and why service requests are raised. 

The focus should be on observing – and ideally videoing so that the customer's experience can be shared with colleagues who have not come on the visit – with the occasional clarifying 'why are you doing that?' question. In addition to observing the direct usage of the business' products, recording the 3-5 minutes before and after direct interactions will reveal the preparation required and any closing activities that need to be performed. These periods are where time-consuming workarounds often reside, frequently becoming so ingrained that the additional pain caused has sunk to the unconscious level and would not be uncovered by conventional interview techniques. 

Taking a cross-functional team to visit customers has two main advantages. Firstly, it ensures that those with appropriate knowledge can observe their counterparts in customers, thereby seeing the direct consequence of their actions and decisions. Secondly, it is both low cost and effective. Thirdly, it is a great way to engage other functions in the customer experience and identify some low-hanging win-win-wins – for the functions concerned, the customer and therefore for the customer experience team as well.