HOW CUSTOMER FEEDBACK DATA IS JUST AS IMPORTANT AS FINANCIAL DATA – liveinsure.in

As business leaders, we all know the importance of keeping your eye on the numbers — whether those numbers are KPIs, dashboard metrics, or financial numbers. But are you also keeping abreast with customer feedback data?

One of the 10 Rockefeller Habits that top-performing companies employ is ensuring that the reporting and analysis of their customer data is as just as frequent, and accurate as financial data.

I’ll go through the key highlights of collecting, measuring, and analyzing customer feedback as covered in my books, Mastering the Rockefeller Habits and Scaling Up.

The Importance of A Regular Customer Feedback Loops

A customer feedback loop is a rhythm of gathering information on how your customers perceive the product or service your offer. The data you collect will be used in weekly meetings and strategy planning sessions in order to determine future actions.

I didn’t realize how simple yet powerful a system of collecting customer feedback could be until I met Michael Dell. When Dell Computer was just a baby called PCs Limited, Michael had his employees keeping weekly lists.

He urged them to write down every problem, complaint, concern, issue, idea, or suggestion that had either crossed their minds or had been reported by a customer that week. On Thursday afternoons these lists were turned in, and Michael took them home to read and to search for the patterns and trends that would emerge over several weeks and months of collecting employee and customer concerns and suggestions.

On Friday morning, he’d call everyone together for what became known as “the hour of horror.” Employees would gather around and brainstorm solutions to some—but not all—of the problems.

Being selective was smart because Michael Dell understood the concept of compound interest. He knew that if you solve just one percent of your problems or make a one percent improvement in your products and services each week, you’ll gain greater and greater yields from the solutions with each passing year.

If, on the other hand, you aim for solving too many problems, you’ll only have a hassle on your hands! Instead of being your key productivity-enhancing tool, it’ll become just another drag on everybody’s time.

Let’s look into how you can execute a customer feedback loop in your organization by looking at the different types of customer feedback data sources to gather information.

Why is customer feedback important?

Customer feedback is important because it serves as a guiding resource for the growth of your company. Don’t you want to know what you’re getting right — and wrong — as a business in the eyes of your customers?

Within the good and the bad, you can find gems that make it easier to adjust and adapt the customer experience over time. In short, feedback is the way to keep your community at the heart of everything you do.

The 4Q Conversation

There needs to be equal accountability in your Executive team for customer conversations. This means that every – and I mean EVERY – member should speak to a customer at least once a week. The info gleaned from these conversations should feed into your weekly Level 10 Executive meetings. Rockefeller Habit #6 suggests a ‘4Q conversation’ face-to-face or via phone/zoom. The four questions are as follows:

– Q1 How are things going at the customer’s end (business, not personal)?

– Q2 What’s going on in their industry?

– Q3 What do they hear about your competitors?

– Q4 How are you doing as their supplier?

What are you trying to do here? You want your customer to give you unbridled feedback on how you’re doing relative to your competitors and trends in their marketplace. You’re building a culture that actively seeks criticism so you can constantly improve.

When there’s an Executive meeting, everyone around the table is an equal partner in conversations about customers. If you had five people on the team, that’s 52 pieces of feedback per person per year – over 250 data points! Just think about how much insight you’ll gain into your customers and their unique problems. Knowledge is power here.

Using NPS to Generate Customer Conversations

Another way to approach this might be to use your NPS feedback to generate the calls. We did this at Rackspace and Peer 1. One of the great things about NPS is you do a sub-set of your customers weekly. Very different to traditional customer sat exercises that survey customers annually and are pretty useless as a result. Within a typical week, you may have a few clients who’ve given you a score less than a 9 or 10. There may also be text comments.

We found it worked well if the person or group that owns the NPS survey arranged a call with an Executive to discuss the score or text comment. This gives you a way in to talk about any issues that have cropped up. You can then broaden out into a 4Q conversation. Customers never fail to see these calls as proper ‘wow’ moments – an Executive has taken the time to call them. And you’ll gain some valuable intel for your meetings.

Whenever we had these conversations, we found that 60% of our customers were dealing with at least one of our competitors. This was always good information to share and learn from. Similarly, these conversations would often uncover a sales opportunity. We ran a book tracking which director had generated the most additional income off the back of these conversations.

Building a Personal Network

Maybe you’re facing resistance from functional heads who haven’t traditionally spoken to customers. HR or Finance Directors, for example. Make it clear that they must pull their weight to be on the top team.

When I see it work best, time slots are allocated to these calls in everyone’s diaries. A PA or someone in the NPS team books the call in for you. Maybe Tuesday at 10am is your regular customer slot. With the diary booking, there’s a bit of data about the customer, how long you’ve worked with them and contact info to give some background.

There’s real value to be had from an HR or Finance Director ringing a client. Maybe they talk to the CEO to offer support to the opposite number on the customer’s team. If you’re the HR Director, you might be talking to them about their ability to attract and retain talent. In that conversation, you might learn about their off-shore operation in Bulgaria. That’s news to you! You wouldn’t have discovered this if you didn’t talk to them.

The 80:20 Rule

Not all customers are created equal. So spend time segmenting them. Roughly 80% of your profit likely comes from only 20% of your customers. It’s these profitable customers that you need to be calling most often. When I was MD at Peer 1 in Southampton, we had 13,400 customers globally. After analysis, we realised that 60% of our revenue came from the top 5% or about 500 customers.

We knew we needed to double this small group of customers, as this would double our business in only three years. So we were laser-focused on ensuring they had the highest level of care and attention. The pulse we were taking was the right one. Be careful of this. Businesses have a habit of treating all customers the same. You need to be strategic.

Build a deep network across these high-value customers. It will make it much harder for them to quit. And you’re likely to uncover further business to expand the account.

Setting the Right Strategy

Strategy is hard. It requires a firm handle on the identity of your core customers and complete clarity on the unique problem you’re solving for them. How can your Executive team know this without talking to customers often? If you’re sitting in a strategic meeting as the HR Director, this is your opportunity to validate what you think your strategy is and whether it’s landing with customers. Instead of being a passenger, your input should be based on what you’ve heard.

Steve Blank, who created the Lean Startup movement, said, ‘The answers to your questions are not in your office.’ You must get out there and find out what’s important to your customers. The clients that we coach that make this a priority find this clarity. They understand their customer’s challenges, how they compare with their competitors, and their market positioning. There’s no stopping them! Their stratospheric growth speaks for itself.

Invest in Your Customer Service Team Today

There’s a strong, data-based case for the positive, multi-layered impact that great customer service can have on a business. The proof is in the research and the results: one significant aspect of a thriving business is to put effort and resources into recruiting and training top customer service talent.