The Best Source of Leads? Your Customers
Surveying customers uncovers leads and demands for new products and services, and creates a roadmap for staying ahead of the competition.
By Michael T. Casey
Customer surveying has gone in and out of vogue about as many times as bell-bottoms. And with each rise, it has improved slightly. For decades, surveying customers was time-consuming or costly, or both, and more often than not, produced results that were outdated, statistically invalid or too vague to act upon. Robust surveying was a luxury that most didn’t indulge in. The Internet and widespread use of e-mail, however, have changed all that, making truly meaningful customer surveying fast, inexpensive and easy to manage, in short, an important business growth tool accessible to businesses of any size in any industry.
Surveying is best practice
How do customers feel about the quality of your franchise company? Turn-around time? Pricing? Customer service? How does the franchise compare to competition in each of these areas?
As a business owner, one often has “a sense” of what the business does well and what needs to improve, but without hard data to confirm or refute these suspicions, it’s difficult to know where to focus time and money to build the business. Changes in business strategy, the market, and the competitive landscape all affect business performance and customers’ opinions of the brands. And until customers are asked directly, a franchise system is left guessing as to where its strengths and weaknesses really are.
At the heart of surveying is opening the lines of communication with the people who count most, customers, and doing something that can be very hard: subjecting oneself and the business to criticism. Difficult as it may be, though, listening and responding to customer’s likes and dislikes are some of the most effective ways to profitably grow a business.
Clay Johnson is the owner of The Goddard School of South Kingstown, Rhode Island, an early education franchise. Johnson opened his location recently and while most things were going smoothly, he had a hunch that some areas needed his attention so he decided to ask. “Parents gave us a lot of poignant feedback, including that parent-teacher conferences, which we view as a critical juncture for us to connect with parents, were not going as smoothly as parents would like. It was a reminder to us that our teachers are highly-trained to work with children, not parents, and that we need to prepare our teachers for the customer relations aspect of their job, which in some ways is just as important as the teaching portion.”
There are a number of business events that can, and probably should, prompt owners to reach out to their customers for feedback. Don Snyder, owner of an Allegra Print & Imaging, a 400-location franchise, felt that need following some significant changes in his Orlando, Fla. shop. After making a major shift in strategic focus, purchasing capital equipment and overhauling his graphics department, Snyder wanted to let the dust settle to “open up the lines of communication and make sure we were going in the direction our customers wanted us to go,” before he took the next step of revamping production.
Companies Need to Communicate Regularly with Customers
As relatively-new owners of an Allegra Print & Imaging location in Ontario, Mark Dalton and Steve Allen were also looking for input. Dalton explained, “We bought the Stoney Creek Allegra about a year ago, and while there was an established customer base, we wanted to get a better sense of what we were and weren’t doing well, to establish a base line for improvement, and to stay in step with our customers’ changing needs.”
In addition to identifying business strengths and weaknesses, timely, specific customer feedback also allows a franchise company to address issues before they grow into problems. When customers have an easy way to share their feedback, the threshold for complaints drops. Business owners often receive more complaints, but about smaller issues. Frustrating as that may be initially, it positions owners well to take care of concerns, real or perceived, as they surface, rather than wait until they bloom into full-blown crises.
Customer Satisfaction is Good. Customer Loyalty is Profitable.
Surveying customers and responding promptly to their input not only strengthens business performance, but sends a clear message: We appreciate your business and are working hard to keep it. What better way to build customer loyalty? And given that retaining customers and expanding business within the current customer base is 10 times more profitable than finding new customers, responding to customers’ needs is the fastest way to build customer loyalty and profitable repeat business.
Companies need to communicate regularly with customers and harness their feedback to drive change, so the franchised business is better aligned with them, and they, in turn, are better aligned with it. David Spengler, sales and marketing manager, Thrifty Car Rental and Thrifty Airport Valet Parking, DTG Operations Northeast, recently began e-mailing a short customer satisfaction survey to his Frequent Parkers/Medallion Club Members, his most regular customers. As Spengler explained, “The response rate was over 18 percent and while almost 80 percent considered themselves “more than satisfied,” about 10 percent responded that we failed in our mission during their most recent parking event. One issue cited was that our staff sometimes left muddy footprints on the floor mats, a real annoyance for customers, yet so easy to address. We immediately implemented a paper mat program and reviewed the survey results with our staff.”
Our most recent survey prompted this comment from a customer: “My last visit did not go smoothly, but I am pleased to see you are back on your game.” Keeping those lines of communication open reinforces loyalty, which in turn fosters a certain “forgiveness factor” that gives us the opportunity to turn a customer’s experience around well before we’re in danger of losing him or her.” And when customers are that pleased, odds are that they will share their experiences with others.
Surveying Builds New Business
Do customers know about every product and service the brand offers? Are they interested in others? What do competitors offer? One of the most under-recognized uses of surveying is as a business growth tool. If one asks the right questions, surveying generates leads and uncovers demand for new products and services.
Surveying Also Serves As a Market Analysis Tool
Goddard School owner Johnson likes the up-sell angle of his parent surveys, “We found that only 20 percent of parents knew about our summer program. By simply asking that question, we increased awareness, without having to produce fliers or ads. Our surveys also produce a fantastic collection of testimonials that we can use in our literature and on our Web site.”
Similarly, Don Synder uncovered several new potential revenue streams with his customer surveys. “As our customers were completing the survey, a few of them actually called me with questions about terminology used in the survey. That indicated to me that there are opportunities for us in finding ways to educate our customers on printing and graphic design.”
Surveying also serves as a market analysis tool, giving owners a means to “test the waters” when evaluating a new offering, as Allegra’s Steven Allen found. “We had been considering adding full-color variable data printing, but when 50 percent of our customers indicated that they were interested, that made our decision for us. And as the first printer in our region to offer it, we should be well-positioned to grab market share quickly.”
Signs Now is a signage and graphics franchise with about 200 locations around the world. Dan Phillips, owner of the Evansville, Ind. location, also found growth opportunities in his survey results. “We learned that 60 percent of our customers want pick-up and delivery, something that several of our competitors offer, and that our larger accounts, which are a big part of our business, want it the most. That’s important information to know and to act upon. We also learned that about one third of our customers would buy creative services from us. I’ve always felt timid about asking for that business, but now I’m swayed the other way and am planning to make creative a new part of our business.”
Surveying often uncovers growth potential right at a franchise’s fingertips through products and services that customers just don’t know are offered. Phillips was surprised to learn that almost 40 percent of his customers want promotional items and didn’t know that he offers them. “Now my staff knows to ask customers about promo items. This is a new revenue stream for us, and it reinforces our position as a one-stop provider for customers’ needs.”
Us and Them: How Do You Stack Up Against the Competition?
Given an easy and anonymous means to communicate their feedback, customers are surprisingly candid. Ask them how much of their business they give to your competitors and why, but be prepared for the response. Criticism sometimes hurts. After licking the wounds, most franchises will walk away with a better understanding of market share and how customers view them relative to their competitors, enabling them to compete more successfully.
Dan Phillips asked his customers these bold questions, and sure enough, his customers responded. “It was a real eye-opener,” Phillips said. “In conversations, several customers had pointed out a number of things our competitors do well. Our survey confirmed those comments: we needed to communicate better, be more thorough, let our customers know we value them and respond to their changing needs.” Phillips took that healthy dose of feedback and is now rearranging and training his staff to ensure all of his customers receive the time and attention they deserve, and that in the future, they use his shop as the standard.
Benchmarking, a Yardstick for Franchises
Evaluating franchise performance is one of the most challenging aspects of business for both franchise companies and franchisee. Of course, revenue is the most obvious measure of performance, but drilling down a level to determine why one location is out-performing another or under-performing a competitor, gives much deeper insight into what needs to be done to improve output.
How is performance measured, and more importantly, how does headquarters draw valid comparisons between one franchise location and another, a franchise and its competitor, or a franchise and its industry as a whole? Surveying. Surveying produces the hard, specific data that allows apples-to apples comparisons. By standardizing surveys and surveying regularly, franchise systems and franchisees build a data history, so they can benchmark against other franchises, competitors, and their own past performance, setting standards for performance and performance goals in every area of their business.
Surveying also provides the metrics regional and national operations directors need to have meaningful conversations with owners, and for owners to learn from each other. Allegra, for example, incorporates survey data into their semi-annual performance group meetings to enhance discussions and goal setting. Recognizing the value that customer feedback could provide to the entire franchise, Dirk Nelson, vice president of field operations at Allegra, recently recommended that all network members incorporate feedback into their operations to drive business growth.
The ABC’s of Customer Surveying
For customer feedback to be meaningful, it must be candid, specific, and actionable. It also needs to be continuous, as customers’ needs change, competition changes and the organization changes. Here are some best-practice ways to set up a low-cost, highly-effective customer feedback process:
- Make the process fast and easy for both the franchise and its customers.
- Tie survey questions to goals and customer’s experiences.
- Tweak questions in each survey to help probe key areas.
- Give customers the option to identify themselves or remain anonymous.
- Let customers choose how often they want to be surveyed.
- Close the loop with customers by thanking them and sharing results.
- Leverage e-mail to deliver surveys for ease and higher-response rates, and to automate data collection, report generation and analysis.
- Compare results with previous survey results and peer group results whenever possible to look for trends.
- Be prepared to act on customers’ feedback because they will expect it.
This article was published in the May 2007 issue of Franchising World magazine.
