An important goal of a customer advisory board is to provide an excellent source of quantitative and qualitative data that goes beyond checkboxes on surveys or conversations over coffee.
Posted Aug 30, 2004
Q: My best customer just left for a competitor, citing better responsiveness. We survey customers every month, and our account managers meet with them quarterly. So, I thought I had a good pulse on what my customers are thinking. What happened?
A: Sounds like your blind spot was to rely too heavily on forms of direct feedback. Customers don't always say what they mean and mean what they say. Take a cue from social psychology. Businesses comprise people, and people demonstrate their wants and needs through what they say and what they do. If you weren't monitoring your customers' behavior, as well as their communications with you, you were missing major clues. Gauging customer needs and requirements requires collecting information from multiple channels. Plus, your analysis must consider business factors outside the realm of your organization's interaction with the customer. In business, as in personal relationships, what's motivating someone isn't always obvious or directly connected to the issue at hand.
One useful CRM tactic is a customer advisory board. In addition to being a relationship tool, an important goal of a customer advisory board is to provide an excellent source of quantitative and qualitative data that goes beyond checkboxes on surveys or conversations over coffee.
You don't need to be a psychologist to analyze your customers, nor do you necessarily need complex systems. You do, however, need to proactively collect data and seek feedback. A CRM program can help by tracking the number of transactions, pricing, service calls, complaints, etc. You also will want some data from accounting on payment history, operating expenses specifically tied to each customer, etc. In other words, you want some sense of profitability.
By meeting with your customer advisory board on a monthly or quarterly basis, you can bounce ideas/concepts by the members and get immediate and direct customer feedback. The board will also help you keep track of what is happening in the marketplace, and will enable you to address issues before they become significant problems.
Technology can generate reports about all this, but it can't give you insight. That's why you need those surveys and those meetings with account managers, too. And they need to look beyond the day-to-day dealings of the account and into the customer's business. A customer who loves your value-added service may still feel compelled to shift to a competitor with lower pricing, especially during a cash crunch caused by her own customers' economic woes.
The goal of your analysis must be to formulate retention plans--one for every customer, not just the ones at risk. Why? Because this planning process means you continually will be working at raising customer satisfaction and increasing profitability. Retention plans are a great guard against the tendency to listen to only what we want to hear from the customers that like us.
Populate the board with a mix of customers to ensure you are getting a more comprehensive perspective. It's a powerful way to make both your best and toughest customers part of your plans to keep them around.
About the Author
Bill Capraro is CEO of CIMCO Communications, Inc., an integrated communications services provider based in Oakbrook Terrace, IL. With more than 20 years of executive and managerial experience in the Internet, telecommunications, and data communications industries, Bill has a demonstrated track record in building successful companies. Prior to founding CIMCO he served as general manager of a privately held payphone company. Mr. Capraro is a graduate of Northwestern University's Kellogg Graduate Management Institute and holds a BA from St. Mary's University of Minnesota.
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