In today’s economic environment, I like focusing on inexpensive, proven ways to boost the bottom line. A surprisingly simple way may be customer surveys.

According to research published in the Harvard Business Review, a simple customer survey asking for your customers’ opinions on how your company is doing can double their loyalty to your company. Since acquiring new customers is 10 times more difficult and expensive than retaining existing ones, this seems like a terrific use of marketing dollars—especially if they are limited.

Here’s a short write-up on this research study and issues associated with customer loyalty that I would like to share.

In a research study by Rice University Professor Dr. Paul Dholakia and Dr. Vicki Morwitz, published in “Harvard Business Review,” the experiment concluded that the simple fact of asking customers how a company was performing by itself proved to be a great customer retention strategy. In the research study, conducted over the course of a year, one set of customers was sent out a satisfaction and opinion survey and the other set was not surveyed. After a year, twice the number of people continued and renewed their loyalty towards the company in the group that took the survey.

The research study offered a couple of interesting rationales based on consumer psychology, behind this phenomenon:

1. Satisfaction surveys reinforce the customers desire to be coddled and reinforce positive feelings.

This stems from part of the human psychology that wants to "appreciate" a product or service they already like. The survey feedback loop is merely a tool to express this. The survey is a vehicle to "interact" with the company and reinforces the customer's commitment to the company.

2. Surveys may increase awareness of auxiliary products and services.

Surveys can be considered vehicles of communication - both inbound as well as outbound. Most people consider surveys as a data collection exercise. When conducting consumer surveys, they can also serve as a medium for disseminating information. It is important to note a few caveats here.

• In most countries including the US, "selling under the guise of research" is illegal.
• However, we all know that information is disseminated while collecting information.
• Additional disclaimers may be added to the survey to make users aware of this fact. Ex: "We will be collection your opinion and informing you about products and services that have come online in the last year..."

3. Induced Judgments

The very process of asking people their opinion can induce them to form an opinion on something they otherwise would not have considered. This is a very subtle and powerful argument. This argument is analogous to the “product placement strategy currently used for marketing products in mass-media like movies and television shows. One example is the extensive and exclusive use of the mini-Cooper in the blockbuster movie "The Italian Job." This strategy is questionable and should be used with great caution to avoid be critically rebuked.

 

Recognizing Buying Signs!

Let's take this opportunity to re-visit the art of recognizing and acting on buying signs.  We all have a good idea of what a buying sign entails but for our purposes, we will define it as when a customer gives you a sign that they are ready to buy.  It could be something like the customer saying, “When can you deliver” or something a little more subtle like, “I really like it but?”  Both of these statements should be immediate cues to the professional salesperson that the customer is ready to buy.

Today, though, I want to talk less about how to recognize a buying sign and more about the consequences of failing to.  I would like to share a story with you that a friend of mine experienced and later shared with me.  He was in the market for a new set of golf clubs, had been shopping around for two or three weeks, and had a good idea of what he wanted.  He finally found himself at a local sporting goods store and found a set that he really liked and began talking with the salesperson.

As the conversation progressed, my friend became increasingly convinced this was the set of clubs he had been looking for.  He tried them out by hitting balls into a net and confirmed what he thought, that he really liked the feel of the clubs.  He told the salesperson that he liked the set and asked about the price.  (Buying sign!)  The salesperson proceeded to tell my friend about the new shafts on the clubs.  My friend then asked if he could purchase a putter as a part of the set.  (Buying sign!)  Once again, the salesperson went back into the presentation.  This went on for a couple more minutes and finally my friend told the salesperson the he would look around and get back to him.

This salesperson missed a sale because he refused or just did not recognize the buying signs.  The salesperson did their job, they made the sale, but they failed to complete the sale.  He already had sold the golf clubs and then bought them back because of his inability to see my friend was ready to buy.  Do not give up a sale because you are trying to sell something to a customer that has all ready said, “I’ll take it!”