lLe needed evolu-tion in

fharke-tiw r e s e a r c h
is respec-tiw relationships
witC, cus-tofhers.

Author’s Note: Each year we conduct numerous “customer listening groups” for

our clients. These discussion groups

_ focus on what it’s like to be a customer, the
good and the bad. Over the years, , we‘ve collected the customer reactions and
observsations, 1which we’ve inserted into this article (in itatics). We think they issue
a wake-up call to our industr y. We only wish the reader could not only read them,
but also hear the passion and frustration v vith which they’ve been voiced

For almost 20 years, U.S. businesses have been measuring the

satisfaction of both their employees and their customers. Using the mail,

the telephone, and now even the Internet, they’ve sought feedback from

customers to help direct their improvement efforts toward the issues their

customers identify as most important. Their goal has been to increase their

competitive position by being better attuned to customer and employee

needs. Not surprisingly, the people and firms tapped to administer these

surveys have come from the marketing and survey research disciplines.

That selection seems quite logical; after all, these are the people trained in

drawing statistically appropriate samples, writing questionnaires, inter-

viewing, and in analyzing and reporting of findings.

By Doudas R. ?ruden and Terry 6. Vavra

 Focussing on the needed information, customer and
employee satisfaction efforts have been approached by busi-
nesses as measurement initiatives. In fact, we believe that per-
spective is substantially shortsighted Although assessing the
“pulse” of the customer franchise or employee community is the
driving motivation, chances are the customers or employees con-
tacted might view the outreach as far more pervasive. This might
be one of the only times a customer will be asked for his or her
opinion, and this might be the employee’s one opportunity to
make some suggestions or to offer a process improvement. The
special regard in which customers or employees hold the survey
means the researcher probably should conduct the research
somewhat differently than if he or she were contacting con-
sumers at large. Measuring customer and employee satisfaction
requires a very different philosophy, even a different mind-set
from marketing research We emphasize this distinction by
describing such projects as customer research.
Customer research is not simply conducting marketing
research among populations of customers. Traditional marketing
research is focused on the efficient capture of valid and unbiased
information. To do so, marketing researchers have relied on
many of the tools developed in survey research. But they have
mistakenly extended these tools and the ethical precepts of sur-
vey research to their projects conducted among customers and
employees There are substantial differences between consumers
and customers, and this naive extension threatens the survival of
the customer and employee satisfaction industries. We’ll share
our philosophy of customer research and we offer some verbatim
comments from customers we’ve interviewed to illustrate this
perspective The figure on pg. 17 provides an overview of what
we consider the primary distinctions to be drawn between cus-
tomer research and traditional marketing research.
DATA C APTURE
The most basic difference between consumers and cus-
tomers-and one that drives much of research practice-is
found in the objectives of the project. Traditionally, marketing
researchers have approached consumers with only one purpose
in mind: to collect information. They expect those consumers
they sample to respond because they’ve been asked to do so
(and in many cases have been paid for their time). A customer
researcher realizes that the interview or questionnaire he or she
is administering might be one of the few direct contacts cus-
tomers ever have with the sponsoring company. As such, the cus-
tomer researcher recognizes that his or her research effort can
and should serve two goals: I) to collect valuable information,
and 2) to help strengthen whatever relationship exists with those
customers selected for survey participation
I was very pleased to be asked my opinion, I felt it was
about time they talked to me, and I was eager to help their
marketing effort.
If communication is recognized as an important goal of all
customer research, the people conducting these projects must
become sensitive to the multiple aspects of the survey process
beyond simply asking questions and collecting data. The ques-
tionnaire’s appearance or the verbal introduction to the tele-
16 Summer 2000
phone interview can be quite revealing to customers. They can
suggest to customers the degree of esteem with which the com-
pany holds them and provide valuable clues about the impor-
tance of the survey to both the company and the customer.
And look at the way some of those questionnaires are
printed-even the quality of the paper they’re printed on.
(/t’s like toilet paper.) What does that tell me about the
importance they attach to the survey?
Clues describing the extent of the “relationship” the cus-
tomer might have with the company are ever present throughout
the survey process. A poorly printed questionnaire or unprofes-
sional interviewers might suggest the organization doesn’t
regard the effort as very important. More specifically, the type of
salutation used (a generic “Dear Valued Customer” compared to
a personalized “Dear Mrs. johnson”) can indicate how well the
company really knows its customers. The degree of personaliza-
tion also might indicate the company’s respect for and valuation
of the customer. Similarly, asking basic, classificatory questions
such as “Which of our products do you own or use?” or “How long
have you been our customer?“-while permissible in mass-mar-
ket, marketing research surveys-can reveal a total lack of knowl-
edge about customers as individuals when asked of them in a
satisfaction survey.
Considering how long I’ve done business with them, I thought
they should know me by name, not “Dear Customer. I And by
now they should know which of their products I buy. But I
seem to be only a number to them.
To avoid such problems, customer researchers require
an intelligent “customerbase” as the driver of their customer sat-
isfaction research process. This database can identify for the sat-
isfaction measurement process: customers’ names, what prod-
uct(s) or service(s) they buy, where and when they last bought,
and generally much more. This background is the kind of basic
information any of us might expect a company with which we
spend considerable sums of money to know. As customers, we
generally will allow an organization to know and maintain such
information because we perceive it’s in our best interests. Such
knowledge helps a company offer us more relevant products and
services at more appropriate times. But in this age of concern for
personal privacy, the customer researcher knows he or she must
honor the confidentiality of the information customers volunteer.
Selling databases containing proprietary information (for
momentary incremental revenue) is not only foolish, it borders
on the unethical.
I worry that these companies will sell my name to others.. . I
don’t want that, but I would like a way to talk to companies
I like.
Recognizing consumers’ increasing distrust of business and
their concerns for personal privacy, the customer researcher
knows he or she must earn customers’ trust. So information is
requested a little bit at a time. And only the most relevant infor-
mation should be requested. Syndicated registration systems
often turn off customers because they incorporate a standard
battery of questions.
Differences Between Customer Research and Marketing Research

Data collection and communication Purpose ma colktlon only

Census How rnany are included tampla
Population is precious - needs retaining View of the population Population infinite-no concern
Offer opportunity to help improve Offer financfai incentive -
product/service - high participant low participation
involvement How participation is encouraged lnvoivsment
Keep data dlsaggregated - at Aggregated data -
participant level How information is analyzed sample avwages
Information is linked to specific
individuals, necessary for follow-up Identification of participants information collected anonymousty
Fix product/service and remedy
individual participants’ problems End result Identify probiems/swiee problsms
Requires follow-up -response to issues, No follow-up,
questions Need for follow-up from survey participation considered unethiaal

And why would they need to know if I read the Bib/e? What tomers Understanding the lifetime value of a retained customer,
does reading the Bib/e or cooking have to do with the new customer researchers know they’re dealing not with just a group
camera I just purchased? of consumers, but communicating with individuals who are the
lifeblood of the company sponsoring the survey And customers
As customer researchers prove the value to customers of are not an easily replenished commodity
their having shared information, they earn the customer’s trust,
I’ve been buying their product for years; don ‘t they have any
and then can ask for more information. As this information is
consideration for how much money I’ve given them?
accumulated, it should be maintained at the individual customer
level so future interactions and future surveys might be even
more personalized from such updated information PU R P O S E
The end point of a traditional marketing research study is
A TTITUDE T OWARD SURVEY PA R T I C I P A N T S reached when the unbiased, clinically pure report is turned over
Trained in the world of opinion polls and advertising tracking to the client Unfortunately, the data often will have been
studies, marketing researchers revere cooperative respondents but “cleaned.” (This might mean some respondents, whose scores
only as sources of information. Unless a marketing researcher is fall significantly outside the scores of most respondents, might
assembling a panel for ongoing follow-up, he doesn’t want or be purged from the data. Removing such “outliers” is a typical
expect to contact or hear from survey respondents again. Not ever. statistical process to help make data “cleaner,” removing the
That’s because respondents for marketing and survey “noise” of disparate scores, and making responses more inter-
research are usually just a small sample of a virtually infinite pool nally coherent.) Measures of central tendency (means] will be
of consumers who can be sampled and interviewed. Although calculated to summarize the general feelings of the customer
they would be reluctant to admit it, marketing researchers gener- body. Satisfaction drivers will be identified at the “total cus-
ally consider individuals within their samples an expendable tomer level ”
commodity. If one responding consumer is lost, another con- The customer researcher is no less interested in producing
sumer easily can replace him or her. compelling results. However, in addition to desiring to identify
the needed companywide additions and changes, the customer
You fill one of those [satisfaction] questionnaires out, and
researcher also recognizes the sovereignty and importance of the
do you ever hear from the company again? It’s as if the
reported problems and concerns of each participating customer
questionnaire is sucked into a black hole in space-never to
It must be assumed that a primary motivation urging customers’
be seen or heard from again!
participation in a satisfaction survey is the hope that their situa-
But the customer researcher must recognize the importance tion with the company will be improved (either by bringing cur-
of each and every respondent, knowing that as current customers rent problems to light, or by providing guidance for the develop-
they’re a “precious” entity. That’s because businesses turn their ment of more relevant products and services in the future).
profits based on how long they retain customers and how much
I think the reason they’re conducting their survey is to give
additional goods and services they’re able to sell to current cus-
people like me a chance to tell them what they should
tomers. Customer researchers understand they can’t afford to
be doing; I like knowing they’re willing to listen to their
jeopardize the relationship their company has with its cus-
customers!
 So rather than eliminating respondents who voice extreme
ratings-either negative or positive-the customer researcher
examines them first, on a case-by-case basis. His or her goal is to
see what can be done to rectify the problems of the dissatisfied,
how the delight of the satisfied can be acknowledged and ulti-
mately leveraged. Good satisfaction programs will issue “red flag
reports” on each highly dissatisfied customers. These reports,
distributed within 24 hours of the questionnaire being returned,
alert operational people to the need to attend to a customer
immediately to turn an unfortunate experience around. But rare
is the marketing research program that includes such processes.
The pain of dissatisfied customers is minimized even more
when the data are aggregated, which “buries” distraught cus-
tomers among the more satisfied. True, it may be reassuring to
some company executives to note that fewer than 3% of all their
customers are “extremely dissatisfied,” but this aggregation of
data almost indemnifies one from having any person-to-person
responsibility for attempting to fix unpleasant situations The
traditional marketing research perspective almost never includes
the resources or the authority to revisit dissatisfied customers to
attempt to correct problems and resolve disputes Part of why
this is never done has to do with participants’ identities.
A NONYMITY
Most traditional marketing research studies not only strive
to protect the identity of every respondent, but also suffer from
the belief that research should be conducted on a “blind basis,”
keeping the name of the study’s sponsor a secret. While biases
certainly are introduced, we believe the customer researcher
stands to gain more than he or she loses by openly identifying
the sponsor of a survey. Without this open sponsorship, some
aspects of the customer’s purchase behavior that need to be
probed could not be reasonably approached in the interview. It’s
also less easy for a company to increase customers’ understand-
ing of its commitment to customer service and satisfaction if it’s
not openly credited for the satisfaction initiative.
We all worry these days about giving out personal informa-
Con.. .I’m not sure I’d do it. It depends; if I knew how they’d
use what I to/d them, and if I thought I could really trust
them, then I might. I’d have to wait and see.
Identifying the survey’s sponsor can prompt certain expecta-
tions on behalf of participating customers. They’ll know the com-
pany is interested enough in their well being to monitor their
satisfaction. But if they’re at all dissatisfied, then they also prob-
ably will expect the conscientious company to solve the prob-
lems they’ve identified, and/or to fix or change inappropriate sys-
tems or behaviors. So if a customer responds, he or she is likely
to believe some corrective action will occur.
Correctly executed customer research programs always will
incorporate some form of acknowledgment for the customers
who have participated. This may be as inexpensive as a mass-
mailed “we received your response, thanks for your help” post
card, to a highly personalized letter addressing specific issues
that a participating customer raised. The most important point is
closing the loop. Without some form of acknowledgment, many
customers will believe that no one took the time to read their
responses or to listen to their needs and suggestions.
18 Summer 2000
How much could it cost them to simply say “We received
your response, thanks for tilling it out?”
Nowhere is acknowledgment more important than in the
cases of both extremely dissatisfied and extremely satisfied cus-
tomers. These customer groups are highly motivated, and they
need to be responded to. Dissatisfied customers need to know
someone has heard their problem. They’re asking for help. A
response can reassure them of their importance to the company
and begin the “healing process.” Highly satisfied customers are
motivated, too. They feel the need to affiliate with a marketer by
expressing their pleasure in being a customer. A failure to
respond to these customers’ comments will dampen their ardor,
possibly diminishing their willingness to advocate the company.
I described my problem in detail-and to/d them how impor-
tant it was to me that they fix it. That was six months ago, I
haven’t heard from anybody at the company!
But what about the vast majority of reasonably satisfied cus-
tomers who express moderate levels of satisfaction? Why should
organizations bother responding to everyone? If customers take
their time to answer the questions, they should be thanked. But
this means customer researchers require far more sophisticated
contact-management programs overseeing their execution of
projects. Customer researchers must not only know which cus-
tomers have responded so they can acknowledge participation;
they also should know the particular delights or problems of
each participating customer. Questions, issues, and problems
must be maintained at the level of the individual customer.
Otherwise, the sponsoring company will not only have missed an
opportunity to retain the customer, but by creating an unfulfilled
expectation, might even have intensified the customer’s angst.
And I was so impressed! Two days after I mailed the ques-
tionnaire, someone actually called me! Imagine that, they’d
actually read my questionnaire! They to/d me how to get the
missing piece. They were so nice. I’d buy again from that
company in an instant!
At the very least, each customer participating in a customer
satisfaction study is owed some follow-up. Whether it is an
issue-specific action plan for improvement or a simple, “thank
you for participating” note, an acknowledgment closes the loop.
Without such evidence that a returned survey has been read, cus-
tomers are far less likely to participate in future waves of a com-
pany’s satisfaction survey.
S AMPLE S I Z E
Traditional marketing research is very precise in its estab-
lishment of the sample. The goal is to capture enough responses
to be statistically valid at the desired confidence level without
being guilty of overkill and “squandering” a project’s budget
through costly samples of excessive size.
Viewing customer research as an opportunity to build a
closer relationship, and as one of a very limited number of oppor-
tunities to unearth customer questions, problems, concerns and
dissatisfactions, the customer researcher’s goals are almost the
opposite. A customer researcher tries to reach as many customers
as possible within his or her budget. In a business-to-business
customer satisfaction survey, for example, that might mean con-
tatting every customer at least once per year. In more mass-mar-
ket product or service industries, the best that can perhaps be
done is to sample moderate value customers while conducting a
complete census of the most valuable customers.
Knowing that there is much more at stake than just deliver-
ing a statistically sound report, the customer researcher wel-
comes the opportunity to extend the opportunity for a survey-
facilitated “dialogue” with the company to as many current
customers as is financially feasible.
FREQUENCY
The majority of satisfaction studies conducted in a market-
ing research mind-set are executed on an annual basis. Last
year’s survey form is resurrected (perhaps the attributes are
reviewed and revised). It’s administered, results tabulated, and
they’re compared with last year’s aggregate results
I look forward to their survey, because I’ve seen positive
changes from previous year’s surveys. So I offer my ideas
for how they can better serve me.
A customer satisfaction survey, however, really should be
used to understand and respond to the ever-changing needs and
requirements of customers. Such surveys are an opportunity to
detect systematic problems before they become the cause of
customer defections. They also should offer a continuous read-
ing of the impact of changes that have been made. But conduct-
ing the survey in a single wave, once a year, is probably too infre-
quent to satisfy either of these needs. Customer researchers are
most likely to divide their customer base and conduct their sur-
vey on an ongoing (weekly, monthly, or quarterly) basis.
RESPECT FOR PARTICIPATING CUSTOMERS ’ TIME
Marketing researchers’ strategies for contacting respondents
are oriented to maximizing completion rates, not the satisfaction
levels of those interviewed. This means if Saturday evening pro-
duces the most interviews, then the marketing researcher’s field-
work will be concentrated on Saturday evenings. Customer
researchers face a harder goal. They must deliver reasonable
cooperation rates, but they dare not impose on customers during
inappropriate parts of the day or weekends.
Marketing researchers are resigned to offering incentives to
help boost cooperation rates for their surveys. But their incen-
tives (a quarter, a one-dollar bill, or a lottery ticket) actually can
be an embarrassment in a customer survey, especially if there is
any possibility the incentive will be interpreted as “fair compen-
sation” for the customer’s effort in completing the survey. It’s
always appropriate to position an incentive as a “token of appre-
ciation,” establishing the fact that the customer’s opinion is
essentially priceless.
And guess what they taped to the letter? A dollar! Can you
imagine? A dollar, as if I should be thrilled to get a dollar!
folded it up and sent it back to them in the envelope they’d
enclosed! All they would have had to have done was to ask
me, but they thought they could buy me!
In the realm of customer research, an incentive stronger
than money, usually is the customer’s hope of bettering the prod-
uct or service he or she receives. But be prepared to improve the
customer’s situation as a result of survey findings, since such
promises are likely to increase customers’ expectations.
But there’s another opportunity for customer researchers
that marketing researchers wouldn’t be as free to use. Branded,
or logo, merchandise often is favored by customers who appre-
ciate a brand. Wearing a Motorola cap would be a desirable way
for some customers to show their respect for the Motorola orga-
nization. Sporting a Mercedes-Benz polo shirt gives Mercedes-
Benz owners the opportunity to tell the world they drive a
Mercedes-Benz. Such branded merchandise can be a very attrac-
tive incentive stimulating cooperation. At the same time,
this merchandise can function to strengthen the relationship
bonds as well.
SUMMARY
As marketing evolves to recognize the importance of rela-
tionships with customers and suppliers, it’s time for marketing
research professionals similarly to embrace the importance of
relationships as we practice our skills. We need to modify our
practices and beliefs to create an additional arm of research-
customer research. We’ve identified some of the basic changes
we have to make in the way we conduct marketing research
among populations of our customers and employees:
l Showing respect and appreciation for customers and
employees in the way we approach and interact with them.
l Establishing procedures to respond to and solve
problems voiced by individual responding customers
and employees.
l Acknowledging participation in our surveys to reassure
customers and employees that their information actually
was attended to and to increase the likelihood they’ll will-
ingly participate in future surveys.
Unless satisfaction measurement begins to assume a more
personalized front with customers and employees and shows
how it can actually strengthen relationships with businesses, it
may be doomed. While the marketing research discipline will
continue to fill many information needs, customer and employee
satisfaction measurement must be managed with the totally dif-
ferent mind-set of “customer research.” l
Douglas R. Pruden is senior vice president of Paramus, N.l.-
based Marketing Metrics Inc. and is the project leader for the
Mercedes-Benz USA Customer Relationship program conducted
by Marketing Metrics. He is a frequent speaker at industry confer-
ences and specializes in retention-marketing practices.
I
Terry G. Vavca, Ph.D. is president of Marketing Metrics Inc. and
is author of Afterrnarketing and Improving Your Measurement of Customer
Satisfaction and is currently writing (with Tim Keiningham) TCle
Customer Delight Principle He has spent the last eight years advising
businesses about the dangers of improperly conducting customer
and employee satisfaction surveys.
ma&et& research 19