Innovative Express
"Improving effectiveness by making the complex simple and making the simple work!"
September 2007
In this issue:
I hope this newsletter finds you well.
I am just returning from facilitating a two-day workshop in Malaysia. Kuala Lumpur is a very charming, modern, clean, and multi-ethnic city. The local Malays, who are majority Muslim, live in close harmony with the Chinese and Indian populations. I happened to be there during the celebration of the holy month of Ramadan during which Muslims fast throughout the day and break their fast only for dinner after about 7 PM. In the sign of how we have become a global marketplace, I had a long and enjoyable conversation with the limo driver on the way to Kuala Lumpur airport about the emerging major league baseball playoff picture!
The title of the workshop was Corporate Strategy Management: How to Formulate Strategies in a Competitive Environment. The attendees were from different industries such as banking, telecommunications, beverage, tobacco, insurance, financial services, and trade development. We covered a lot of ground in areas such as competitive intelligence, creating an early warning system, competing on price, differentiating yourself, meeting and exceeding customers' needs, and developing brand leadership.
Speaking of customers, this month's newsletter is about how things such as customer satisfaction surveys that make perfect sense on the surface can be highly misleading in real life.
Inspired to agree, disagree, or otherwise comment? Have an interesting or humorous story to share? I hope that you will let me know your thoughts.
Abhay Padgaonkar
President, Innovative Solutions Consulting, LLC
Quick Update
As most of you know, I have been writing a lot of articles. For the first time this month, I collaborated and co-wrote an article with a colleague and fellow IMC consultant Lisa Koss on "Dealing with Diversity Dilemmas."
The article appeared (with our pictures and all) in The Business Journal in a special diversity section to coincide with the 2007 Workforce Diversity Awards! The article deals with gender, culture, work style, and age dilemmas and offers possible approaches to address them. It was fun working with Lisa, discussing different ideas, and combining our separate thoughts and work into a seamless single article.
The article was also accepted by the reputable HR.com website for publication during the first week in October.
Steering Clear of Satisfaction Surveys!
Most companies have realized by now that customers are the lifeblood of their business. And the happier the customers are, the more loyal they will be, and the more loyal they are the more the cash registers will be full. What better way to find out than ask them, right?
Wrong!
In that context, I wasn't surprised that on my trip to Malaysia, the flight attendant requested that I fill out a Survey of International Travelers. This was more than just a survey; it was a 16-page bilingual (English and Chinese) booklet! The survey was commissioned by the Office of Travel & Tourism Industries in the International Trade Administration inside the US Department of Commerce! Phew! That is bureaucracy three-deep if you were keeping track.
The instructions proudly announced that "the information collected in this survey is used by airlines, travel agents, hotels, government travel offices, and other travel planners and providers to understand you, the international traveler, and thereby take steps to improve your international trip." Sounds pretty sincere and impressive, doesn't it? This gem of a survey had 29 insightful questions spread over 7 pages to gain just such insights. Here are some examples, not including demographic questions.
- Did you make a connecting flight? (Yes/No)
- How did you obtain the information to plan your trip? (12 choices)
- With whom are you traveling now? (6 choices)
- Are these one way tickets? (Yes/No)
- What types of transportation did you, or will you, use when reaching your destination on this trip? (9 choices including Motor home/camper)
- "Where are you sitting today?" (3 choices including First Class) followed by "What type of airline ticket do you have?" (8 choices).
I hope you know what I mean. My reaction was "Who cares?" Obviously, some gnomes in the department of commerce, three levels deep do.
Had I bothered to fill out the survey, my answers would have been pretty simple actually. The check-in lines were too long, the seats were specially designed to be back-breaking, the food utterly lousy, and the security process a little too personalized for my liking. (I was "randomly" selected for the pat-downs!) Next question?
The survey instructions admonished in bold, capital letters that "ONLY ONE RESPONSE PER FAMILY GROUP, PLEASE." As if, that would really screw up this highly sensitive, highly scientific effort. Give me a break! I only shuddered to think what the multi-year Department of Commerce contract was worth to prepare, collect, tabulate, analyze, report, and distribute the results of this meaningless survey and to say that here was the gospel straight from the international travelers' mouths. I didn't really let it bother me that at the bottom right hand corner of the survey it said: "OMB No. 0625-0227 Expires 7/31/2005."
In case you are thinking that this colossal waste is only the fiefdom of wasteful government, think again. I have seen similar corporate surveys that miss the forest for the trees---only administered online, as if that in itself makes all the sins disappear.
In "The Top 10 Reasons You Don't Understand Your Customers" (Harvard Management Update, 2006) Fred Reichheld has this to say: "Far from informing companies of what their customers truly value, they are becoming a major reason that organizations misunderstand their customers entirely."
Although created with good intentions, customer satisfaction surveys are fraught with problems. One of my favorite sayings is "The Road to hell is paved with good intentions." Reichheld mentions several reasons including, too many questions, the wrong customers respond, the right employees never hear the problems, many surveys are sales calls in disguise, survey scores don't link to a company's performance, surveys confuse transactions with relationships, surveys actually dissatisfy customers, and manipulation wrecks surveys' credibility.
He says that the biggest problem is that a detailed analysis of individual customers typically finds that 60%-80% of customer defectors score themselves as "satisfied" or "very satisfied" on surveys preceding their defection. Oops! So rather than worrying about satisfaction, Reichheld recommends that you hang your hat on advocacy by asking the "ultimate question"- and that is: "How likely are you to recommend this company to a friend or colleague?"
Only if they respond with a 9 or 10 are they passionate advocates. If not, they are passively doing business (7s and 8s), and everyone else is a detractor! He recommends that "you call the profitable customers who are happy, and understand what you are doing right so you can do more of it; call those who are unhappy, and you'll learn what it takes to improve your offering and sustain profits, which is where the hard work begins."
A few years ago, I conducted objective, third-party relationship reviews with Fortune 500 customers of a global, blue-chip company client. These interviews, many of them in person, tested for emotional connections by asking open-ended questions covering the holistic relationship. Because these relationship reviews were personalized, the participation rate was over 90%. Most importantly, the interviews collected rich and honest information that was impossible to collect through mass surveys. These finding were used to transform an internally-focused culture and to develop healthier client relationships.
Bottom Line: Stop pretending that you care for the customer and start acting like you do by ditching the customer satisfaction survey.
Personally Speaking...
One of the above in-person interviews I did was with a well-known Pharmaceutical client of my client. The key contact said in typical New York bluntness that my client was wasting their money by hiring me to do the interview.
After I picked myself off the chair, I managed to ask her what she meant. She responded, "No matter what you go back and tell them, nothing is really going to change!" And then she went on to read me the riot act on all the misdeeds over the years. I heard her out and let her vent.
Of course, I relayed the information back to my client the moment I stepped out of the office.
Unfortunately, it was a case of "too little, too late." The Pharmaceutical client left my client in the next few months. Of course, the writing was on the wall as far as I was concerned, but I couldn't help but wonder what would have happened had I gone there a year earlier.
Bottom Line: If you are not truly listening to your customers, you can't know what they are thinking.
Disclaimer: "This written advice is absolutely intended to be used, and if used under expert supervision is known to improve organizational and individual effectiveness substantially."
© Abhay Padgaonkar 2007. All Rights Reserved.