Don't be a customer mind reader. Ask them!
By Jenny C. McCune • Bankrate.com

Small-business owners spend a great deal of energy guessing what's on customers' minds.

Stop! Instead, just ask them. They will tell, especially if your questions are in the form of an effective survey.

"Surveys are vital to get a true pulse of customers' opinions, attitudes and perceptions of your small business," says Linda Mastaglio, owner of Thoughts, Words & Images, a Van, Texas, firm that helps clients conduct consumer polling and surveys.

Start by figuring out what you need to know. Rather than scatter shoot, determine exactly what customer insights could help you better run your business.

"With a survey, you need to have a specific goal in mind, an actionable goal, not a 'Gee whiz, wouldn't it be great if we knew X or Y?'" says Ruth Stevens, president of eMarketing Strategy, a customer retention consultancy in New York.

Mastaglio says the appropriate questions can help you find out:

1. Whether your marketing efforts are working.
2. How customers perceive your service.
3. How customers view your company in comparison to the competition.
4. Ways you could add value to your current services.

In addition to getting inside the hearts and minds of your customers, surveys can shore up customer loyalty and boost retention, says Stevens.

When Stevens worked for Book of the Month Club, she sent out a questionnaire every time a member quit. The survey asked the basic questions about why the customer was leaving, but it also was "a thinly disguised attempt to get them back." An attempt that usually worked, Stevens adds.

Survey specifics
After you've determined a general line of questioning -- a survey on customer ordering or a questionnaire about what customers would like to see in a new product -- keep the actual survey "short and sweet," says Chad McClennan, CEO of The Customer Group LLC, Chicago.

"You've got to be specific enough that the results are actionable," McClennan notes.

He also recommends that surveys be short, five rather than 50 questions, and they be designed so they can be quickly and easily filled out.

A company also needs to pinpoint exactly who should be surveyed. Experts recommend segmenting customers. The idea behind segmentation: You ask the right folks the right questions and get the right answers. For example, if you want to know what the ordering experience is on your Web site, you'll need to question Internet customers, not telephone purchasers.

Segments can vary. They can include new customers, customers who haven't bought recently or customers who have changed to another vendor. Marc Drizin, a vice president with Walker Information in Indianapolis, Ind. recommends going after the 20 percent of your customers that make up 80 percent of your business.

Getting the word out
OK. You picked your questions and know which customers to ask. Now you must determine how to distribute the survey.

Most experts recommend multiple outlets. Have a survey on your Web site, conduct regular phone or direct mail surveys and ask people their opinions when they stop by your store. Of course, distribution may also be a matter of how best to reach the people you want to survey. If you need to get feedback from mail-order customers, then a direct mail survey is your best bet.

You also must decide whether to reward survey takers. eMarketing Strategy's Stevens falls squarely in the "do not incent" camp, at least not for the first round. She advises small businesses to try surveys without offering rewards. If you don't get enough responses, then try to lure them in with a discount or another incentive, such as a small giveaway or a larger gift given to a randomly chosen respondent.

By contrast, Denise O'Berry, president of the Small Business Edge Corp. in Tampa, Fla., views incentives as a way to boost the number of responses and to reward customers for taking the time to fill out a form. "Giving incentives makes you seem more serious about it," she says.

Timing is everything
Another big question is how often to survey customers. The answer varies by company, its needs and its resources.

Ongoing surveys are the best, Walker Information's Drizin says, but sometimes that's not practical for smaller firms. At a minimum, try to conduct a survey at least once a year, more if your company can handle it.

Annual surveys do have a big drawback: lack of timeliness.

"Surveys are a lagging indicator," the Customer Group's McClennan says. "They show problems that exist, not a problem that is looming. If you do a survey once a year, then you may have a problem that's been ongoing and causing damage for the entire year."

And keep in mind that a little surveying can go a long way. Don't abuse your customers by requesting feedback at every opportunity. They'll burn out. At best, they'll stop responding to your surveys. At worst, they may respond by finding another, less inquisitive supplier.

"Surveys are a critically important tool for gathering information about customers' needs and customers' values, but they must not be abused," Stevens says. "If they are too frequent, written in the wrong tone, or are too hard to fill out, they can serve to annoy and turn off customers, exactly the opposite of their intent."

Turning answers into action
Finally, once you get your answers, put them to use. If you fail to take customers' advice, not only will your survey be a waste, but you may irritate clients.

"A key to success with a survey is to use the information to improve your organization, its systems, and its products," says O'Berry.

McClennan agrees. Failure to act on the data you collect can almost be worst than not surveying at all. "So often it's garbage in, garbage out," he says. "It's worse to ask and do nothing than to not ask at all," he says.

"Whether you have five or 5,000 customers, you need to include them in your product-development efforts," Drizin says.

Such inclusion is probably more important to a smaller firm with only a handful of customers. Surveys ensure that the opinions of this small, but important, client base are heard and that your company delivers what customers need and want so they keep coming back.

"If you look at leading businesses across industry, I can't think of any that aren't diligent in their pursuit of customer feedback," McClennan says. "If a business chooses not to survey its customers, it does so at its own peril."

Jenny C. McCune is a contributing editor based in Montana

-- Posted: Sept. 25, 2002