If you listen closely enough, your customers will explain your business to you.
— Peter Schutz
I assume that you already know and do not need to be convinced that:
- Your most profitable sales and easiest growth come from existing clients.1
- Unhappy customers are 5-20 times more likely to tell others about their bad experience than satisfied customers are to spread good news.2
A simple, high-return method of learning from your happy and unhappy customers, of knowing your customers better while making them more loyal to you is to listen to them. Customers are people and people love being listened to.
There are many ways to do this. I hope your salespeople and customer service reps are gleaning more from customer interactions than orders–and are sharing that intelligence with management. You may also have a blog open to comments. Online, telephone, and in-person customer surveys work for many businesses. CEO-to-CEO strategic alignment conversations are hugely valuable. I particularly recommend professionally designed and facilitated customer listening sessions.
I design and deliver customer listening sessions for my clients. After meeting with the customers, I brief the client executive team on what I have learned. We work together to implement new programs and procedures to make the best use of what we learned from listening to the customers. Listening is important. Action makes the difference.
Here are my instructions on how you can organize your own customer listening session.
Steps to Organizing a Customer Listening Session
- Be explicit about the corporate goals the listening session is meant to support, e.g., growth, margin, line expansion, service offerings, locations, market positioning, etc.
- Select a representative cross-section of customers: new and established, large and small, active and former, happy and disappointed.
- Plan to have 6-12 participants. Invite two to three times as many customers as you want to attend.
- Use an independent, experienced facilitator.
- Choose a location and schedule convenient for your customers. A meal and a tangible gift are important expressions of appreciation.
- Send invitations at least two weeks prior to the group. Send via postal and email; follow-up with telephone calls.
- Have a script and timeline for the event.
- Allow plenty of opportunity for the participants to talk with each other. They will create memorable value by exchanging tips and ideas. They will also speak freely when talking to each other, although you are listening.
- Prepare and test questions in advance. Questions should be open-ended, intended to promote frank discussion. A focus group is not a survey.
- Welcome each participant personally and thank each customer for taking the time.
- Begin and end on time.
- Say good bye and thank each person.
- Summarize the results of the session as quickly as possible, while the experience is fresh.
- Send a follow-up “Thank You” note.
- Let participants know of any changes made at your company as a result of the session.
1 “According to several studies by Technical Assistance Research Programs and the U.S. Office of Consumer Affairs, it costs five times as much to recruit a new customer as it does to retain an existing one.”
2 “Complaint rates not only underestimate the number of dissatisfied customers, but they fail to indicate the extent to which negative WOM [word-of-mouth] may adversely affect business. Richins (1983), for example, found that 85% of customers dissatisfied with a clothing item told an average of five others. Richins’ (1987) replication study reported similar findings. There is also some evidence to support the views of several researchers (Lutz, 1975; Mizerski, 1982; Weinberger and Dillon, 1980; Wright, 1974) that consumers place more weight on negative information in making product evaluations. For example, Kotler (1991), quoting from work by Arndt (1967a), TARP (1986) and Richins (1987), states that customers dissatisfied with a product spread negative WOM to eleven acquaintances, while satisfied customers may spread positive WOM to only three. Similarly, Hart, Heskett, and Sasser (1990) suggest that those with memories of poor service tell approximately 11 people while those with pleasant recollections tell only six. This ratio of positive to negative WOM is supported by TARP (1986) findings which suggest consumers engage in about twice as much WOM when they are dissatisfied compared to when they are satisfied.”
by Don Charlett, Ron Garland and Norman Marr
in Marketing Bulletin, 1995, 6, 42-50, Research Note 1
From the moment I could talk,
I was told that I should listen.
For some specific instructions on improving your listening skills, click here to read One More Question, on this blog.
See also on this blog, Handling Complaints.