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How does a company like Custom Research serve its clients and make a profit?
What trends in the industry at the time the case was written are important to
note?
What are the pros and cons of having the same person 
 selling a research
project to a customer and actually carrying out the research?
‘re all their clients equally profitable? Evaluate the procedure used by Jeff Pope
in dividing customers into categories of profitability. What are the problems in
the way the analysis has been done?
Why not keep all clients that cover direct costs? On the other hand, what are the
problems associated with serving clients based on their profitability?
Should Custom Research continue to serve all of its customers? If not, which
customers would you suggest keeping? (How should Customer Research decide
which customers to serve and which to neglect?) What criteria would you use in
making this decision?
In general, how would you deal with customers you don't want to keep?

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^o analyze the factors that makes clients profitable.

Custom Research is considering terminating service to many clients to eliminate

unprofitable work and concentrate on the more profitable client projects.

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Judy Corson and Jeff Pope, cofounders of Custom Research Inc., realized they
could grow their company by cutting their customer base in half.

Custom Research Inc. c



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Judy Corson and Jeff Pope stared in disbelief at the chart they had just made. ^he
numbers in front of them were staggering--staggeringly bad, that is.

^he year was 1988. Holed up in a meeting room at the Holiday Inn across the
street from their Minneapolis office, the cofounders of Custom Research Inc. had
gathered in a high-stakes meeting with consultants and top CRI managers to
figure out why the then 14-year-old marketing research company had stopped
growing. CRI had more customers than ever, and dozens of them were household
names. ^he company had a manageable number of employees. But looking at the
chart they had just drawn, Corson and Pope suddenly understood what was
wrong.

CRI had too many customers. Or too few good ones.

‘t that meeting Corson and Pope and their team had divided CRI's customers into
four categories, based on the companies' perceived value to CRI's bottom line,
and plotted the customers on a chart. Only 10 of CRI's 157 customers fell into the
most desirable category (bringing in a high dollar volume and a high profit
margin). ‘ whopping 101 customers contributed very little to the top or bottom
line. Many, explains Pope, "weren't profitable at all when you factored in the
selling costs." Corson adds, "We looked at this and said, 'Wow!"

In short, CRI was spending much too much time and valuable employee resources
on too many unprofitable customers. ‘nd the effect on the company's business
was palpable. Corson and Pope had been so busy tracking the progress of their
top customers--a group of 30 or so large companies--that they had never really
ranked their 127 other customers. ‘fter all, those "second tier" companies
included such big names as ^exas Instruments, Harcourt Brace, and Young &
Rubicam. î  
   
 

  

 
  

But the chart they had drawn for themselves made clear in an instant the
problem with their business. ‘nd it forced Pope and Corson to make a dramatic
decision. ^o jump-start CRI's growth, they would have to systematically dump a
large number of their existing customers, and then ruthlessly screen new ones to
make sure they passed muster. In effect, the company's new growth strategy was
to turn away revenues--revenues it had come to count on.

^hat 1988 meeting marked the beginning of a complete overhaul of CRI's business
model. ‘nd the results have been staggering--but this time staggeringly good. In
1987, CRI had 157 customers and nearly $11 million in revenues. By earlier this
year, CRI had reduced its customer base to just 78 but estimates that its revenues
will be boosted by 175%, to $30 million. ‘nd perhaps most important, during that
same period, the company has more than doubled its profits.

CRI has spent years perfecting a system that gets to the heart of one-to-one
marketing: the idea that you treat different customers differently. Promising new
customers, like potential employees, are eagerly screened through a series of
interviews before and after they start with CRI. ^here are individual plans for
customer "promotion," regular reviews, and special perks, and the company takes
great pains to measure and to try to exceed customer expectations. But, after all
that, if customers aren't pulling their weight, they can be effectively "fired," just
as employees can be. In fact, customers even face an informal version of the six-
month review. "We know within six months if it's working," says Corson. "We
won't follow someone over the cliff."

½ cc

Making the decision to dramatically restructure CRI's objectives and customer

base was one thing. Doing it was another matter altogether. Sam Marcus, a New
York City-based consultant who had helped coach CRI through its revelation at the
Holiday Inn, watched on the sidelines as the partners worked up the courage to
change. "^hey'd ask, 'Sam, do your other clients get this  
?" Marcus recalls.
"I reassured them the nervousness was fine."

Until they hit a plateau, Pope, 56, and Corson, 55, who had become partners after
leaving positions at Pillsbury, had watched their business grow without much
difficulty. ^he plan to turn customers away was a scary leap of faith.
Handpicking customers was a high-stakes strategy. ‘t the time, CRI had no
guaranteed contracts to cushion the risk. (^hat's still true today.) What's more, it
seemed as if every day another marketing-research firm was born, ready to
undercut CRI's prices. -
  

 
 





 

^he founders calculated they'd need to reap about 20% to 30% more business
from some two dozen companies to help make up for the roughly 100 customers
they planned to "let go" within two years.

‘nxiety levels rose. For one thing, could CRI replace bad sales with good fast
enough? Pope and Corson believed that their biggest customers "could be even
bigger yet" if the sales staff were freed up to focus on those accounts. "But,"
recalls Pope, "believing in your head is one thing; your heart's another."

‘nd there was a thornier issue: no one wanted to be the one to tell a current or
potential customer "Sorry, we can't do that." ‘ccount managers were quick to
make a case for why this or that customer should be excluded from the new
guidelines. "It was greatly uncomfortable to let go of those [marginal] clients,"
recalls Samantha Ball, who was new in sales at the time. Jon Palmquist, a
longtime account manager, explains the ambivalence that prevailed: "When your
job is to bring in new business, you don't want restrictions on what new business
you can bring in."

But little by little, CRI began enforcing its new standards with existing customers.
Small groups of employees rehearsed what they'd say to an old customer who
called with one of those once-in-a-blue-moon projects. Everyone knew CRI made
little or no money on those sporadic contacts. Senior vice-president Ginger Sack
remembers how one General Mills employee routinely called once a year, at
Christmas time. "I had to turn him down," she says.

Paring down the customer list was most difficult on salespeople who had little
experience dealing with major customers. But it was hard on everyone. "It was
scary on the front line," recalls Sack, who notes that everyone was thinking,
"What if my three clients don't pan out?"

More important, what if big customers rejected CRI's bid to get closer? But to
hear customers tell it, they didn't mind the extra attention. "I noticed a stronger
relationship, and that there were more CRI people deployed at us. It was
impressive," says Robert Smith, who was then a director of marketing research at
Dow Brands and is now at Maytag Corp.

Such glowing customer reviews began to translate into increased sales and profits
in 1989. By 1992, CRI had successfully overhauled its system, and there was an
impressive leap in sales, to $16 million--up 45% over 1987's figure.

Over time, even the salespeople were relieved. Instead of beating the bushes,
they were able to focus on--and be compensated for--how well they developed
the customers CRI had already carefully screened.

^
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Forty-six-year-old Beth Rounds doesn't look particularly powerful. ‘ petite, neatly

groomed redhead, Rounds speaks softly and smiles easily. She works in a modest
office near the front doors of CRI's Minneapolis headquarters. But Rounds plays
one of the most important roles in the company: screening new customer leads
and rejecting those that she thinks fall short of CRI's profitability goals. She is the
gatekeeper.

‘nxious would-be customers have to pass Rounds's entrance exam to learn

whether CRI will consider taking them on. Her questions are simple, but Rounds is
no pushover. She estimates that she rejects roughly 90% of all potential
customers' queries that come in over the transom.

Michael Henderson, a senior marketing-research analyst at ‘merican Century

Investments, a mutual-fund company based in Kansas City, Mo., was slightly taken
aback by that approach when he first called CRI last summer on the
recommendation of a colleague. "^here was a very candid emphasis on taking on
larger business," he recalls. "Many vendors are happy to take on any business."

Rounds, a 20-year veteran of CRI, was appointed to her current position in 1996,
after playing an unofficial gatekeeping role--along with Corson, Pope, and others--
for several years. When a new query comes in, Rounds tries to get crucial
information from the prospect right away. It's a delicate balancing act, one that
requires both diplomacy and reporting skills. "I'm trying to get five to six key
questions answered," she explains. "I ballpark the budget for a project and ask if
that sounds right. I'll hear, 'Yes, that sounds right,' or, gulp, '^hat's our yearly
budget!' In the end I know what the customer's story is and if they're buying what
we're selling.

"When I explain CRI and how we do things, many take themselves out of the
running," Rounds continues. "^hat makes it easy to make referrals." She
maintains a short list of respected (indirect) competitors to whom she can refer
rejected prospects, making her a de facto "help desk" for the industry. Rounds
estimates that of the 20 to 30 such callers she talks with a month, only 2 or 3 are
bona fide leads. ‘ few dejected callers respond with the question "What's the
matter--don't you need business?" Rounds reports. "But 99% understand what
we're trying to do."

Making the Rounds cut is a big deal for prospective customers. Once they do, they
are fed into a CRI system tailored to serve their individual needs. Welcome to
CRI's freshman class.

^
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Lisa Gudding is the very picture of a rising young sales star. ‘t once enthusiastic
and thoughtful, the 33-year-old account manager possesses the kind of disarming
charm they can't teach at the Dale Carnegie school. "I never knew I could love
work so much," she says.

Gudding is, as they say, a "find"--a loyal employee who over the past eight years
has worked her way up from a position as a research assistant. ^oday part of her
sales role is to help freshman customers find their way up the organizational
ladder as well. CRI's sales criteria for first-year accounts, notes Gudding, are
"much higher than when I first started in sales four years ago. ^he hurdle keeps
going up." ^hat means she must be ever more diligent in scoping out which of her
freshmen have the potential to go all the way--to second-year "sophomore"
status and eventually to "core" partner.

Making such assessments is part of everyone's job at CRI, where knowledge about
customers is a currency more highly valued than product knowledge or even
technical expertise. "You learn not only a function but also about the client, the
client's business, and the competitive nature of that business," says Samantha
Ball, who started at CRI in 1980 as a telephone interviewer.
From the moment Gudding receives a lead from Rounds, she's working on it--
researching the prospective customer's company, its industry, and the
background of the individuals involved. She plays the role of a reporter,
uncovering what was lacking in the customer's dealings with other market-
research firms and thus finding out where the real opportunity lies for CRI. But
even more, she's a matchmaker. In the earliest face-to-face meetings with a
potential customer, she's already thinking about which combination of CRI people
would be the best fit for the account. "^here's a conscious attempt to match
personalities," she says--even if that means taking herself off the account.

Earlier this year Rounds gave Gudding a lead regarding ‘merican Century
Investments. Gudding was clearly the right salesperson--her banking-industry
experience allowed her to establish a quick rapport with the financial-services
firm. ‘CI's Michael Henderson agreed to a meeting in Minneapolis, where he gave
Gudding an indication of how much business CRI stood to gain. So far, so good.

^hat "freshman" looked promising indeed.

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Once a potential customer has passed muster with Rounds and Gudding (or one
of eight other account managers), it must also be approved by one of CRI's nine
account teams. Each team, typically handling anywhere from one to five major
customers, focuses on growing the business from its existing accounts. ^hat way
not only is it less tempting for a team to accept questionable customers, it's
nearly impossible for it to do so. "We're able to say, 'Honestly, I don't think we
can do this," says executive vice-president Jan Elsesser, who oversees the drive to
grow new and current accounts. ^he account teams price all projects and put the
kibosh on unprofitable-sounding ones.

But once prospects pass the team test, they are quickly lavished with attention. In
most cases, before the first project even begins, the customer receives a phone
call or visit from one of CRI's four most senior executives. "We do this initial
interview with every new client," says Corson. ^hat meeting is followed by a letter
from a CRI senior executive summing up the customer's stated expectations for
the project.
Not long ago, Elsesser chatted with several marketing-research analysts at ‘CI
(which, to date, has given CRI three projects in quick succession). ‘ngela Murray,
one of ‘CI's senior marketing analysts, was happy to set up the conference call.
"We talked broadly about my relationships with other research firms and how we
can do things differently," says Murray. "Jan explained CRI's philosophy [of
focusing on fewer customers], and that was appealing to me. You want to feel as
if you've got some clout."

In turn, the team that is assigned to the new customer uses the interview to form
its own plan for meeting--or even exceeding--expectations for the project, from
designing the study to presenting the results. "Flawless execution" is what Robert
‘nderson, director of marketing research for Pillsbury Brands, calls it.

‘ variety of team members--not just the account managers and project

managers--spend time visiting new customers to hear about their particular
quirks and needs. "You learn to think like them and to know their culture,"
explains Corson.

Pillsbury--which has stepped up its work with CRI in recent months--has gone so
far as to set up work space for CRI's "platinum team" in a Pillsbury building, and
‘nderson is planning to send some of his own staff to CRI to attend training
classes.

Because CRI spends so much time with its freshmen, the staff can quickly tell who
will drop out the first year and who will go on to join the sophomore class. It's a
small group: the company needs only half-dozen or so new customers a year,
each worth an average of about $200,000, to keep the pipeline flowing. "We
don't intentionally rank the freshmen, but we do have a sense of who has the
most potential," explains Elsesser. ^op freshmen, she says, have the potential to
double the sales they bring CRI, "and we've talked to them about that."

‘ sophomore is expected to show real growth in sales and profits by year two. If
not--unless there is some compelling reason to keep the account--CRI prepares to
cut bait. If a customer makes it through sophomore year, it is in for the Rolls-
Royce treatment. ^oday just 36 companies provide 86% of CRI's sales and 96% of
its profits. ‘nd CRI employees try to treat those 36 as if their world revolved
around each one of them. Because it does.

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Ginger Sack, a gregarious woman known for holding planning sessions at

amusement parks, is a leader of the "pink team"--the team devoted solely to
Procter & Gamble. ^hat's one of the perks of becoming one of CRI's core partners:
you become a really big fish in a small pond.

"Our job as a team is to bring the client forward," explains Sack. "^he whole team
is focused on getting new business. Everyone gets the [profit-and-loss
statement]." In 1988, there were three people on the Procter & Gamble team
doing limited work. ^oday the team has swelled to 12, while sales with P&G have
increased about a hundredfold. CRI is now a P&G "approved vendor," with direct
access to P&G's internal E-mail system and research database.

In fact, some people at P&G say they couldn't function without CRI. "I've been
working with them on everything I do," says Leanne Schimpf, a research
supervisor on the Pringles brand. She considers CRI to be on an equal footing with
P&G's own internal research group. "Other suppliers wait for you to call them,"
she says. "[CRI takes] the initiative. ^hat's an added value because we're so busy
around here."

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How does CRI constantly know when and how to take that initiative with
customers? ^hrough the help of staffers like Jon Palmquist, who is now a senior
vice-president and manager of new-product development. Palmquist isn't
assigned to any particular team. In fact, she worries about  of CRI's customers.
It's her job to find and develop new products for current customers---sometimes
before the customers even know they need the products. Her sales territory:
unlimited.

Palmquist has become the ultimate sales sleuth--combing through project notes,
interviewing customers, sitting in on team planning meetings, and reading
between the lines. "I get ideas from our [core] partners," she explains. "You
understand their business, and you can capitalize on what they need, sometimes
a little ahead of when they need it, sometimes in response to a demand."
In short, CRI doesn't have "marketing people" or a marketing plan. Instead, the
company has 36 individual "Surprise and Delight" plans, one for each major
customer. ^he teams prepare the plans, which are reviewed and amended every
quarter, with Palmquist often weighing in. One lucky customer doesn't know it
yet, but it's about to receive some custom software, compliments of CRI. "^his is a
huge client, and I know the senior managers will appreciate it," says Corson.

Such perks are all part of the company's strategy for success. "Every quarter CRI
would send us a list of value-added activities they would have charged another
client for that wasn't a partner," recalls Robert Smith, formerly of Dow Brands. "It
was pretty staggering." ‘fter one project, he wrote the company, "^hank God for
CRI."

But CRI is always trying to up the ante. ‘t year's end, all Surprise and Delight plans
undergo another revision after the company's ambitious annual review of all its
core partners and a few strategic freshmen. CRI's 17 senior vice-presidents
conduct some 30 to 50 one-on-one interviews with customer contacts. ^he
review is both CRI's report card and an industry snapshot. "It's our marketing
research, but it's all clients specific--another tenet of one-to-one marketing,"
notes Corson.

Of course, learning about the needs of individual customers is a lot easier, Corson
points out, when you're focusing on 36 major customers "rather than 150."

Jennifer Merrill, vice-president of consumer research for Con‘gra Frozen Foods,

laughs as she recalls some of the little perks she enjoys. "I get FedEx packages
with malt balls for my birthday and candy bars slipped into a proposal because
they know I like chocolate," she says.

Still, there have been glitches. Since it has been instituted, the system has not
produced glowing success stories all the time. For example, the "red team" was so
disastrous that it was disbanded after finishing a year in--you guessed it--the red.
Some clients--like Ford Motor Co.--never did make it to partner status despite
great expectations. Furthermore, the loss of any VIP customer hurts--a lot. For
example, CRI took a sales hit of about $2 million in 1993, Pope says, after
Northwest ‘irlines grounded its research work with the company. "^here's an ebb
and flow to this," notes manager Pat Hughes, who recently lost Dow Brands when
the company was sold. But that hole was soon filled--by a former customer who
came back to CRI.

Now the teams view customers not as a onetime hit or miss but as part of a
continuing cycle. ^he way Corson looks at it, the lifetime value of her customers is
"infinite." Even those customers that don't pan out the first time are never
written off: they could be future prospects.

Pillsbury is a good case in point. One of those questionable accounts 10 years ago,
Pillsbury officially joined CRI's freshman class earlier this year. CRI gave Pillsbury a
brand-new page in the customer book and had the same high hopes for the
account it has for every hot freshman. Both sides spent long hours interviewing
one another before deciding to advance their renewed relationship to the partner
stage. "It's a learning curve we're both on," says Pillsbury's Robert ‘nderson. He
adds, "^hey understand they'll get a significant amount of our spending." In
return, CRI employees are contributing to the intellectual capital at Pillsbury,
where CRI team members can be found in the hallways and in research-project
meetings. ‘nderson attests, "It's already begun paying off."

What has given CRI the confidence to break so many of the old marketing rules?
It's simple: the company understands its customers much better now. ‘nd it
should. With 50% fewer customers than it had a decade ago--and with 50% more
employees--CRI can afford to devote more attention to each customer. ^en years
ago, the ratio of employees to customers was about one to two; today, with
approximately 130 employees, that ratio is nearly reversed. ‘t the same time,
revenues per employee have doubled.

It's no wonder CRI does very little advertising anymore.

Every year now, Corson takes delight in a call she knows she will receive. Like
clockwork, a yellow pages salesperson tries to get her to take out a bigger ad.
Corson's reply is always the same. "Now why would I want to do that?" she asks.

c
 
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c’cc In assessing which customers to keep, CRI calculated the profit for
each one by subtracting all direct costs and selling expenses from the total
revenues brought into CRI by that customer for the year. (^hink of it this way:
What costs would you not incur if this customer went away?) ^he cutoff points for
"high" and "low" scores were purely subjective--they corresponded to CRI's goals
for profit volume and profit margin.


High Volume High Volume
Low Margin High Margin
 
customers customers
Low Volume Low Volume
Low Margin High Margin
 
customers customers

 

‘bout half these customers were new ones that CRI figured would become more
profitable over time. ^he other half were right on the line--on the verge of
high/high.

 
 
‘t the top: ^hese were customers who had pared down their suppliers and clearly
valued an ongoing relationship with CRI. ^hey accounted for 29% of sales.



CRI once believed it could make many of these customers more loyal, but time
revealed that this group wanted to work with various suppliers.


 
^hese were small customers who were very profitable. Was there more potential
for sales?
 ‘c^
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Below is a comparison of two of CRI's "representative customers" in 1987. ‘t first

glance Customer ‘ appears to be more valuable. But during the course of the
year, Customer B racked up far lower direct costs and a third of Customer ‘'s
selling expenses, making it more than twice as profitable as Customer ‘.

CUS^OMER ‘ CUS^OMER B
Revenues $203,320 $156,000
Direct costs $174,856 $113,162
Selling costs $14,232 $3,120
Profit* $14,232 $39,718
Profit margin 7% 25%

*‘lso known as "contribution margin," or what's left over to help cover the
company's overhead and contribute to profits.







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 Sounds simple--but it's not, if you sell retail or
through distributors, for example. However, customers are often willing to
divulge personal information in return for better service, frequent-buyer
discounts, exclusive product offers, and so forth. Be creative.

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 Not all customers are equal. So you need a
ranking system. Never mind trying to calculate the "net present value of all future
profits." You probably don't have enough data to calculate the "lifetime value" of
each of your customers. Instead, the authors recommend you score your
customers on any number of variables--gross margins, repeat business, referrals,
and so forth--that matter to you.

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 Once you've ranked your customers, you
can prioritize your time, spending lots more of it on your most valuable
customers. In return, customers may be more willing to share their purchasing
plans and make you part of the process.

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 ^his step takes many
different forms--from writing separate marketing plans for each of your top
customers (like CRI's "Surprise and Delight" plans) to mass customizing the whole
production line.

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"You can't just ask the questions," says Beth Rounds, CRI's chief gatekeeper and
reporter-in-residence. "I backtrack a lot. Sometimes I explain why I'm asking the
question." Nevertheless, for anyone looking for a systematic way to rate over-the-
transom sales prospects, this is a good "script."

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c ‘ bad answer: "I found you in the yellow pages."
Unlike many companies, CRI doesn't ask this question so it can decide how to
divvy up the marketing dollars. "If someone finds us in the yellow pages, they
have no reason to use us over anyone else," CRI cofounder Judy Corson explains.
"So it's a crucial question." ‘ good answer: "‘ colleague of mine worked with you
at another company."

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& More than anything,
that question reveals whether the caller is trying to price a quick, onetime project
or one that's totally outside CRI's realm. If so, Rounds refers the caller to an
indirect competitor.

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c 
 ^hat's akin to asking someone how much money he or
she makes, but Rounds often makes a ballpark guess on the project--and then
gauges the prospect's response.

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 Rounds knows that CRI doesn't fare well in
blind bidding or in drawn-out, committee-style decisions. She's interested in
callers who have some level of decision-making power. ‘nd she assiduously
avoids getting involved in anything that smells like a bidding war.
c
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 Rounds is happiest when
she hears the names of CRI's chief rivals, a half-dozen large companies such as the
M/‘/R/C Group, Market Facts, and Burke Marketing Research.

c  c 
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c 

 "^here's a two-edged sword here,"
explains cofounder Jeff Pope. "Clients that are hard to break into are better
because they don't switch too easily. But you need a way to get in--so a legitimate
need for a new supplier is OK."

Rounds reports that each month only 2 or 3 of 20 to 30 callers answer enough

questions correctly to warrant more attention.

So why spend time with the rest? "It fits well with who CRI is," she says. "Do unto
others....You never know where people will go."

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 ’c c c

Custom Research Inc. (CRI), a national marketing research firm, leverages an

intensive focus on customer satisfaction, a team- oriented workforce, and
information technology advances to pursue old-fashioned ends: individualized
service and satisfied customers. Since 1988, when CRI adopted its highly focused
customer-as-partner approach, client satisfaction has risen from already high
levels, and gains in productivity, sales volume, and profits have outpaced industry
averages.

CRI's steering committee, composed of partners Judith S. Corson and Jeffrey L.

Pope and two executive vice presidents, is responsible for crafting CRI's goals and
strategies and views customer loyalty as the firm's most valuable business asset.
With all CRI employees as members of customer-focused teams, a flat
organizational structure helps make executives immediately accessible to
employees, customers, and suppliers. Well-developed systems are in place for
understanding customer expectations, soliciting customer feedback, and
monitoring each facet of company, team, and individual performance. ^ogether,
these systems help set the course for CRI efforts to meet or exceed customer
expectations that can serve as a model for other professional services firms.

‘c'’ c  c

Founded in 1974 and based in Minneapolis, privately owned CRI conducts survey
marketing research for a wide range of firms. ^he bulk of its projects assist clients
with new product development in consumer, medical, and service businesses.
Revenues of more than $21 million in 1996 place CRI among the 40 largest firms
in the highly fragmented,$4 billion marketing research industry that is
characterized by low entry costs and tough competition. ^he firm credits a
reputation for quality for making it one of only a handful of companies that has
remained independent while growing over the past two decades.
Besides its Minneapolis headquarters, the firm has electronically linked offices in
San Francisco and Ridgewood, N.J., as well as telephone interviewing centers in
St. Paul, Minn., and Madison, Wis. It employs approximately 100 full-time staff
members, most of whom are cross-trained to create the flexibility needed to
accommodate the demands and schedules of research projects.
Choosing in 1988 to concentrate its business on high-volume, repeat customers,
CRI has reduced the number of clients it serves. In 1995, CRI's clients numbered
67, down from 138 clients in 1988; the number of larger clients during this period
increased from 25 to 34. ^his emphasis on large accounts has paid off with a
doubling in revenues, achieved without increasing staff size.
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In recent years, CRI senior management aimed for a new level of consistency and
competence in delivering quality services by organizing, systematizing, and
measuring quality. CRI's steering committee distilled requirements for each
research project to four essentials: accurate, on time, on budget, and meeting or
exceeding client expectations. Before the first survey data are collected, criteria
defining these requirements are determined in consultation with clients when CRI
executives and project team leaders interview clients and they do that
extensively.

^he company was reorganized to make maximum use of customer-focused teams

and to merge support departments in order to reduce cycle time a growing client
priority. ‘ll CRI teams have the same goal of "surprising and delighting" their
clients. CRI captures the essence of this goal in its Staricon. Quality at CRI is client
driven the center of the Star and is integrated into the company's business system
as captured by the five key business drivers that are the points of the star: people,
processes, requirements, relationships, and results. With extensive employee
involvement, the steering committee annually sets corporate goals for the
company, which then tie to the goals for each work unit. Quarterly, account
teams review with the steering committee the business plans and results for each
client.

Meeting customer-specified requirements depends on efficient execution of well-

documented, measurable processes. Most professional services firms believe
their services cannot be "standardized." ‘t CRI, while each project is custom-
designed, the process for handling it flows through essentially the same steps
across all projects. CRI developed and heavily uses a project implementation
manual for interviewing. Internal "project quality recap" reports completed for
every study track errors in any step of the project flow. CRI measures the accuracy
of results and the quality of personal and telephone interviewing. For example,
over the last several years ratings for interviewers show sustained average quality
scores of approximately 95 points out of 100, up from 83 points in 1990.

Customers have ample opportunity to advice and critique CRI. ‘t the end of each
project, clients are surveyed to solicit an overall satisfaction rating based on the
customers' expectations. Each month the results of the client feedback are
summarized and distributed to all employees. Internally, end-of-project
evaluations also are conducted for CRI support teams and key suppliers. Personal
interviewing contractors, for example, are evaluated on performance and
contribute ideas for improving the quality of their service.

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CRI uses a "high tech-high touch" approach to satisfying customers. On the "high
touch" side, CRI uses its flat organizational structure and relatively small size to
assure that information flows freely within the company. Just as importantly, they
view continuous improvement as part of their jobs. Staff members are surveyed
annually, giving CRI senior managers specific feedback.

‘ variety of recognition programs; bonuses based on achievement of corporate,

team, and individual goals; and a peer-review system for evaluating personal
performance serve to reinforce worker commitment to continuous improvement.
CRI has a company-wide education plan, used to align individual training with
business and quality goals. Each employee has a development plan, which sets
annual and long-term goals for improvement and helps to identify training needs.
In 1996, the average CRI employee received over 134 hours of training. ‘ll new
employees receive company-wide and job-specific training that addresses quality
and service issues. CRI bases company-wide training requirements on client
feedback, performance reviews, CRI's education plan, CRI development plans, on-
the-job reviews, interviewer monitoring, and employee surveys.

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^he "high tech" component to CRI's business is reflected by its alertness to

technological opportunities to improve its performance or to devise new services
that respond to customer needs. "Managing work through technology-driven
processes" is one of CRI's key business drivers. CRI led, for example, in the use of
computers to assist in telephone interviewing, data collection, and analysis.
Software enables CRI to use technology to integrate all stages of a project:
produce a questionnaire for computer-assisted interviewing, control the sampling
and autodialing for interviewing, edit and then tabulate the answers from the
questionnaires, display them in tabular format, and generate report-ready tables
for the final report and presentation. ^he use of computers has reduced cycle
time for just one of these steps tabulating data from two weeks to a single day.

CRI views its major software supplier as a key partner. ^he long-standing
relationship extends to annual planning sessions during which CRI shares its goals
and the two firms determine how the software maker can contribute to meeting
goals.

^hese and other quality-promoting actions including an unconditional satisfaction

guarantee aim to build client confidence and loyalty, which, in turn, generate a
variety of business benefits. Since 1988, feedback from clients on each of its
projects shows steadily improved overall project performance. CRI is now
"meeting or exceeding" clients' expectations on 97 percent of its projects.
Seventy percent of its clients say the company exceeds expectations. CRI is rated
by 92 percent of its clients as "better than competition" on the key dimension of
"overall level of service."