Check yes or no: Will a survey help
you improve customer satisfaction?
By Kara Stefan • Bankrate.com

There are more ways than ever for small business owners to ask their customers that all-important question: How are we doing?

Customer satisfaction surveys have been a standard part of many businesses for decades, often in the form of a card propped up on a hotel mirror or slipped in alongside a restaurant bill.

Today, though, the traditional survey methods -- written surveys, telephone surveys and focus groups -- have been joined by high-tech options such as interactive kiosks and Internet surveys.

Here are the major types of surveys, their advantages, drawbacks and costs.

Written survey
A written survey can be issued either through direct mail or at the point of purchase. The advantages are that it provides for anonymity and may be completed at the customer's leisure.

Written surveys are designed to solicit numbers -- what do the customers like and dislike, and how much? What is the demographic profile of the customers?

To keep response rates high, they should take no more than 15 minutes to complete.

These surveys can be costly. How much the survey costs is related to your sample size and whether you survey your existing customers at the point of purchase or reach out to new ones via the mail.

You have to expect a low response rate, so you mail out perhaps 1,000 surveys to get 100 responses. A ballpark estimate for a mail survey of 1,000 customers is $5,000 to $10,000, with printing, postage and handling eating up 60 to 70 percent of your total cost.

Telephone survey
If a business owner needs to get a glimpse into customers' opinions and subjective feelings, a phone survey is the way to go. Phone surveys can go beyond the numbers because customers in conversation with a well-trained surveyor will elaborate on their responses.

Leeza Raffel, president of Communications Solutions Group in Jenkintown, Pa., suggests the following process to help streamline a telephone survey and maximize responses:

• First, send a letter to customers informing them of the upcoming survey so that they don't misinterpret the call as a solicitation.
• Call ahead to schedule a more convenient block of time for the actual interview.
• Ask questions designed to stimulate both qualitative and quantitative data.

Sheb True, a marketing professor at the graduate facility at Kennesaw State University in Atlanta, estimates that a basic phone survey should cost around $10 to $12 for every completed call.

The latest trend in prepaid calling cards has spurred yet another resourceful way to gather survey information. Marshall Hospital in Placerville, Calif., in conjunction with MHA Communications, mailed phone cards to patients that, when activated, asked the callers to respond to six brief questions regarding the quality of care received. The survey yielded an impressive 38 percent response rate.

MHA President Rick March says this type of phone survey can cost as little as $3 to $5 per response -- a price that includes the survey, the response cards and the long-distance incentive gift.

Focus group
A focus group is a panel discussion of a dozen or fewer consumers who get together to analyze a particular service, product or idea.

The big advantage of focus groups is that they give an in-depth look that can help a business owner decide whether to tinker with or even scrap a concept. Sometimes, there's no substitute for watching a consumer grapple with a new product's prototype or seeing a consumer's face while reacting to an idea.

Discussions are led by a moderator who probes and clarifies to wring the maximum amount of information out of the subjects, who are paid $50 to $200 for their time.

When he's moderating a focus group, True uses computers to allow management to quietly guide the discussion. "I link up two laptops and pretend I am taking notes while moderating the session, when in fact the system allows my clients to send me direct messages while watching live videotape from another room. They can tell me to move on, not dwell on a particular topic or delve further into the answer given by the woman in the green dress."

The costs can vary widely, but for a focus group with a dozen participants and a third-party moderator, expect to pay at least $3,700.

High-tech surveys
Computers have inserted themselves into this area of commerce, as they have in most others. They show up in two major ways -- point-of-sale survey devices and online surveys.

The devices are fancy versions of the "How are we doing?" cards that motels and restaurants have distributed for years. In-Touch Survey, for example, offers information kiosks and electronic clipboards that let consumers fill in their opinions.

The advantage for business owners is that the data can be tapped into and analyzed almost instantly. How did the customers like the veal special? Click.

Customer opinions can also be sorted and compared to industry norms.

Online surveys take advantage of the Internet's speed. Some surveys are done through Web pages; others are e-mail based. To get more information from consumers, it's common to offer an incentive, such as a chance at a prize.

At $2 to $6 per response, Internet surveys save big over traditional mail and telephone surveys. However, the surveys measure only the responses of people who are online, and they may not have the same opinions as the population as a whole.

Make surveys ongoing
Surveys should be part of an ongoing customer satisfaction program, the experts say. True suggests sampling 25 percent of your customer base once a year. That way, you only burden a customer every four years, while continuously gathering information.

Finally, find a survey method that reaches beyond your current customers. "A common pitfall with customer satisfaction audits is the sole focus on current customers," True says. "In order to gain market share, companies need to assess why consumers don't buy from them, as well as why they do."

Kara Stefan is a freelance writer based in Virginia
To comment on this story, please e-mail the Bankrate.com editors

-- Posted: Dec. 23, 1999