Our business helps clients improve the service experiences they provide to their customers. When we start working with a new client, it is always an interesting experience. Typically, the first concern is being flooded by disputes through our interviewers in the course of following up with customers. “Will our staff be able to handle them?” lamented one senior manager. In another case, after three months of surveying, an executive vice president of a company came into the office of our contact and questioned the validity of the numbers. In his words, “Our customers don’t like us this much!”
I could continue with many other examples, but the plain truth is many company managers are not aware of what their customers think (and feel) about their products and services. This unawareness is especially true in the B-to-B environment because the customers number into the thousands instead of the millions, like B-to-C markets. Furthermore, in a B-to-B company, the business is concentrated with a small number of customers. This small customer number creates the feeling that:
“we know what our customers think about our business, good and bad.”
The reality is much different. The senior managers interact with senior managers at their key clients. Too often, there is limited interaction at lower levels in the customers’ organizations. Smaller customers are lucky to get any attention from anyone!
Other reasons that keep managers from getting a full picture of what customers really want fall into four categories:
- The squeaky wheel gets the grease. The individual in the organization that can create the most attention for his or her customer wins! If there is an issue and it is the major account for a salesperson, they do their best to address it. You can’t blame them, but I have observed that the real customer problem is sometimes not nearly as severe as the salesperson suggests (I could substitute many other titles here). But through years of training, managers have too often learned that the “squeaky wheel does get the grease.”
- Negative noise is louder than the positive. One of the puzzling things I have noticed in many organizations is the bias toward the negative. The story of the senior manager who could not believe the company’s customers rated their service experience reasonably high illustrates my point. He could not believe the results because he heard much more about the serious problems with products and service. There was no countervailing information source that gave him a broader and more balanced perspective.
There are several reasons we focus more on the negative than the positive. The first is the one I just noted—no broad perspective view on what customers think. Second, dealing with a knotty customer problem, while perhaps unpleasant, is often very satisfying when a solution is found. Immediate gratification is realized. Thirdly, our focus on the negative may be rooted in our evolution. “Neuropsychologist Rick Hanson, Ph.D., author of Hardwiring Happiness: The New Brain Science of Contentment, Calm, and Confidence, states that research in neuroscience is showing that we’re all hardwired to register and remember negative events more quickly and deeply than positive ones.”[i]
- Messengers have agendas. No surprise here. People do have agendas. News, positive or negative, can be used to help justify an investment or an extra spend in marketing. In the absence of a factual, broad-scale view of what customers think, messengers with agendas can influence the results.
- Even with a formal process, you may not be hearing from a good cross-section of your customer base. In some cases, we work with companies that had a customer feedback process in place. Sometimes, it was as simple as a postage-paid postcard (yes, they still have such things). In other cases, it was a mail survey or perhaps an electronic survey. Our experience with electronic surveys is there is a slightly negative bias in the response. In other words, those customers that are toward the unhappy side of the scale are more likely to respond.
To illustrate my point, consider the findings from a recent study published in the Academy of Marketing Science Journal. The researchers chose companies that participate in the American Consumer Satisfaction Index (ASCI) and surveyed a sample of front-line managers in some of the participating companies. They wanted to compare what the managers thought of the quality of their products and services versus what the ASCI results showed. The findings were striking and concerning. When compared with the ASCI findings, managers overestimated:
- Customers’ perceived value of the firm’s products and services,
- Customers’ satisfaction, and
- likelihood to repurchase[ii].
Remember, these results are in companies where they have a formal survey process in place. In those that do not my suspicion is that managers’ perceptions are even more disconnected from customer reality.
What do managers know about how their customers? It appears there are significant disconnects from what front line managers think about the quality and value of their company’s offering versus how customers see things and this is in companies even with a formal survey process in place. This disconnect may have more to do with the needed information not getting to those frontline managers who can see what customers think and identify ways to improve. In the absence of a formal survey process, it likely means that managers are indeed “flying blind” in understanding what customers think about their service or products.
[ii] “Do Managers Know What Their Customers Think and Why?,” Hult, Morgenson, Morgan, Mithas, and Fornell, Journal of the Academy of Market Science, 2016