Are you really listening to your customers?, Solutions!, Onlines Exclusives, March 2004

ARE YOU REALLY LISTENING TO YOUR CUSTOMERS

By George Colombo, author of Killer Customer Care

You may think that you’re listening to what your customers have to say—but if you are like many business owners and managers, what you are not hearing is hurting your ability to provide first-rate customer care. Let’s take a look at how a couple entrepreneurs listen to their customers and you will see what I mean.

Our first entrepreneur owned a boutique that sold upscale women’s clothing. Terry wanted to establish a brand name and identity for his store in anticipation of creating a national chain. He knew how he wanted to position his chain in the marketplace and believed that his selection of merchandise would be critical to his success. To his credit, he spent a great deal of time in the store getting a feel for which fashions were hot and which were not.

Two or three times a week, however, a customer would ask him if he carried lingerie. He would explain patiently that he didn’t carry lingerie and then recommend a store in the area that did. Terry got frustrated with his customers’ apparently endless interest in lingerie. "If they want lingerie, "he’d sigh, "they should go to Victoria’s Secret." Apparently, they did. Terry never opened a second outlet and his vision of a national chain of upscale shops died when he shut his store only two years after it opened.

A different approach to listening is demonstrated by Sonny, an entrepreneur who focuses on specialty software. Developing software can be risky and expensive, especially for a small company. Sonny, however, established an enviable track record over the years. He almost never released a product that was poorly received.

Sonny’s secret for success was simple but audacious. Rather than investing money in speculative software development, Sonny would produce a mock-up package for a product he was thinking of introducing, then show it around to buyers at the handful of distributors that dominated the industry. If he couldn’t get enough orders to cover his development costs, the product idea was quietly shelved. Sonny would make some sort of plausible excuse to the distributors, cancel outstanding orders for the never-finished software, and move on to another more promising project. So, which entrepreneur do you think was listening to his customers more effectively?

The science (and art) of listening
These two examples hint at the importance of combining attentive listening with a willingness to act on what you hear. But, like so many other basic principles, the ways in which this concept translates into "real world" business practices can be tricky. The term I use for effectively listening to customers in a business environment is institutional listening. It is a specific set of skills that, properly executed, provides your company with the information it needs to consistently deliver exceptional customer care. There are six individual components of institutional listening:

• Purposeful listening
• Active listening
• Capturing what’s heard
• Aggregating what’s captured
• Analyzing the aggregated information
• Acting on what you discover

Purposeful listening: Remember the detective show Columbo? The killer would often betray his guilt with an inadvertent admission that would go unnoticed by everyone on the show except Lt. Columbo. He would instantly hone in on the mistake because he was listening with a purpose. He knew why he was listening and, as a result, would recognize an important clue immediately.

That’s the basic approach you need to take when listening to your customers. Valuable nuggets of information are often delivered as offhand remarks that would almost certainly go unnoticed if you were not listening purposefully.

Active listening: If purposeful listening is like being able to recognize a piece of treasure when you see it lying on the ground, then active listening is like a willingness to dig even deeper when only a small sliver of treasure is visible and the rest is buried under a pile of trash.

Customers often believe their input is unwelcome and unwanted, especially when they’re unhappy about something. As a result, they are reluctant to be forthcoming. What you’re likely to hear is an offhanded comment or a cryptic remark.

When you’re actively listening, you’ll not only recognize something significant when you hear it, but you’ll also know to dig deeper into a situation so you’re sure to understand what’s really going on.

Capturing what’s heard: Even if you do a terrific job at both purposeful listening and active listening, that’s not enough. You still have to systematically deliver the information you accumulate into the hands of managers who can use it effectively.

The trick is to make the transmittal process systematic. Every company, after all, passes information around casually. Management interactions with employees--ranging from performance reviews to water cooler conversations--are important but often inadequate. You need to deliberately create regular and reliable systems for exchanging information.

Finally, employees must not perceive that there’s a penalty for delivering bad news. When someone tells you that customers are complaining about some aspect of the products and services your company offers, don’t argue about the merits of the customers’ complaints. When an employee is telling you something you don’t want to hear, she is doing you a favor.

Aggregating what’s captured: When you capture any information about what is on the minds of your customers, the next element of institutional listening consists of aggregating that information in a useful format. As a practical matter, this means getting the information entered into a software program. For your employees who work in front of a keyboard, provide an easy way for them to enter information immediately. For employees who do not use computers regularly, get the information on paper and establish a procedure for data entry as soon as possible. Often, you can assign the job to employees who are already doing clerical work.

Analyzing the aggregated information: This is the part of the process that is not only the most important but also the most difficult to codify. It is part art and part science; but for all of its subjectivity, a few rules can make it more straightforward.

First, all your data can be divided into two categories: quantitative and qualitative. Quantitative information can be measured objectively and expressed as a numeric value. For example, if you are analyzing complaints, you can assign them to categories like "pricing" or "merchandise availability." Once it is accumulated, quantitative feedback can be graphed so that trends and/or anomalies are made as obvious as possible.

Qualitative information is subjective. For example, a customer might say that your newspaper ad was "confusing" or "misleading." This type of feedback can be summarized so that it is convenient to review.

Some feedback might fall into both categories. If a customer mentions to someone that your prices are higher than the XYZ Company’s and "XYZ always seems to have better prices than you," that feedback could be quantified as a price complaint. The rest of the remark could be listed in the qualitative summary that you create.

There is no magic formula for gleaning insight from the information you accumulate. However, if you’re like most businesses, you are probably not doing this analysis regularly. If that’s the case, then just the process of reviewing this information every week will be valuable.

Acting on what you discover: Finally, when you discover something in the course of your analysis, don’t let your new insight linger as a merely academic curiosity. The point of doing the analysis is to impact your customers’ experience with your business. Act on what you learn.

An important postscript to this primer on institutional listening is this reminder: Terrific customer care is not necessarily what you think it is, and it’s not even what the rest of your industry thinks it is. Truly superior customer care is whatever your customers think it is.

(Adapted from Killer Customer Care, Entrepreneur Press, 2003)

About the author:
George Colombo has been named one of the "10 Most Influential People in the History of the CRM Industry." He has been a thought-leader the fields of sales, marketing, and technology for almost fifteen years. His newest book is Killer Customer Care: How to Provide Five Star Customer Service That Will Double and Triple Your Profits, (Entrepreneur Press, 2003). He can be reached at (321) 276-4893 or www.killercustomercare.com.