Capturing Customer Feedback

At the Gartner CRM conference in

Scott Nelson of Gartner said in his keynote that companies were still woefully inept at harvesting and using feedback from customers to improve their marketing.  I believe the words on his slide were something to the effect that  “Organizations continue to fail to understand the value of customer feedback, discarding most information collected from customers.” (Actually, I’m sure those were his words, because I have see his slides on the CD that was provided to conference attendees.)

Later, in his talk on customer experience, Gartner’s Ed Thompson, one of my very favorite commentators on things CRM, quoted a 2005 study by Respond that proved Scott’s point. This study said that while 95% of surveyed firms collect customer information, just 45% alert their staff, and only 35% use the insight in any way. Only 10% actually “deploy” a change or policy based on customer feedback, and only 5% of firms tell customers that they used their feedback.

Sorry, folks, I don’t think life is ever going to get simpler than it is today for businesses using customer data. As time goes on, there will be more and more customer feedback either to discard or to use, and more and more customer insight either to ignore or to act on. 

Thompson’s message was that what we should be doing, to get hold of this monster now, is inventorying all the possible sources of customer feedback at our firm. He said that a Fortune 500 company might have as many as 200 different sources of customer feedback, ranging from different types of actual market research to inbound emails, over-the-transom comments and complaints, and sales meetings. We’d suggest adding a feature to that inventory. For every form of customer feedback or input, try applying a rating for (a) the cost-efficiency with which it is accurately captured, and (b) the effectiveness with which your company actually uses that feedback.

Chicago

Comments

[Kevin Hillstrom]

Did Scott Nelson of Gartner share with everybody how effective his organization is at capturing Gartner customer information, and did he share if his firm's techniques improved Gartner's marketing?

And at your company, do you apply ratings for the cost-efficiency with which customer information/feedback is accurately captured, and the effectiveness with which your company actually uses the feedback? If so, can you share what you have learned, and how you have used the information to improve 1to1's bottom line?

[Don Peppers]

Kevin: Do I detect a bit of irony in your comment?

I can’t speak for Gartner, but I can tell you that my firm, Peppers & Rogers Group, very definitely spends time and effort encouraging and capturing every bit of customer and prospect feedback we can manage. And we track it relentlessly. Our newsletters and publications reach over 200,000 professionals around the world every month, and we go to great lengths to try to stimulate feedback. We know which of our vehicles – and what types of articles – tend to do the best, and we track not just feedback we get, but the leads generated by it and the consulting or speaking engagements initiated as a result. Nevertheless, I still think we could do a better job at it. I’d like us to do better.

The truth is, however, this isn’t a fair comparison because we have a big advantage over most companies, even large database marketing businesses like Eddie Bauer and Lands’ End, for two reasons. First, we’re a high-end professional services business, so our customers and prospects number in the thousands, at best, and the ones we focus on have potential values in the hundreds of thousands of dollars each. So we can afford to put a lot of manual elbow grease to the task, and we do. We can pretty much eye-ball the big opportunities without needing much by way of analytics. But second, it is the nature of our business that we “sell” intellectual content and thinking. That’s our value proposition. And the only way we can make that sale to any particular client is by engaging them in a highly interactive, consultative selling process.

By the way, I see you have a brand new book out, Hillstrom’s Database Marketing, and I just bought the last copy in stock (currently) at Amazon – so it must be doing well. I was also pleased to see that when the order was processed Amazon recommended Martha’s and my book, Managing Customer Relationships, also.

[Kevin Hillstrom]

Excellent. Your response conveys authenticity and transparency.

It can be frustrating to hear experts tell you that your business fails to utilize information appropriately, and that you need to improve your processes. Each company has its own culture, making various strategies difficult to implement.

It can be liberating to hear experts tell you the successes and failures their own organizations have experienced trying to utilize information properly. You feel like you and the speaker are going through a similar experience. You feel like you can trust the speaker.

Thanks for articulating that you experienced successes, and have opportunities to improve.

And thanks for purchasing the book! What a pleasant surprise.

[GrahamHill]

Don

Interesting post. I wholeheartedly agree that most companies do not use the information so expensively gathered about their customers to best effect (and I don't mean just customer feedback).

Much of this is due to structural problems in how companies are organised, how they operate and how employees go about their daily business. George Day covers many of these difficulties and how to overcome them in an insightful article on "Aligning the Organisation with the Market" in the current Sloan Management Review.

(Day's article also pours cold water on some of the conclusions reached by Peter Kim in his recent Forrester report on "Reinventing the Marketing Organisation", showcased in earlier posts on this blog.)

There are changes in customer-facing business afoot that will make this problem significantly worse. Namely, the move towards increased customer involvement in general and customer co-creation in particular. Once customers are invited to be involved in open innovation, in generating media, in word of mouth recommendation through their social networks and in self-service, the number and complexity of customer data points expands exponentially. And customers expect the compainies who have invited them inside to take note and respond accordingly.

Quite a challenge I think you would agree.

Graham Hill

[Philip Moore]

Thanks for a great idea.

We have an infrastructure and reporting tool to accumulate analyze and report on the customer feedback collected through surveys, letters, emails, and inbound phone calls. But we don't use the tool to record inputs from associates who interact with customers in the sales or after-sale service transactions.

The challenge, it would seem, is to sufficiently standardize the inputs to allow for analysis without reducing the likelihood of catpuring important insights. Does anyone have stories to share about how they tackled this challenge?