With businesses finding it tough to prise money from cautious consumers, entrepreneurs who fail to learn what the market is looking for are set to struggle.
Customer comments aren’t just important when you’re in full crisis mode, as Brumby’s has found out following last week’s carbon tax price hike furore. They are increasingly vital in an environment where half of Australian businesses expect the economy to struggle in the next 12 months.
While not always pleasant, dealing with both solicited and unsolicited feedback from customers is all part of running a business.
In fact, many suggest that handling both positive feedback and complaints from angry customers can be a useful business tool.
Kate Tribe of Sydney’s Tribe Research has been acting as a third-party customer feedback collector for SMEs for 15 years. She will either design a survey for a business to collect itself, or help collect and collate the results on behalf of a business.
Customer feedback is vital for future business growth, Tribe says.
“Businesses should think about customer feedback as being the key to their future. Senior management need to be heavily involved in the process,” Tribe says.
James Eling is a consultant to the hospitality sector, running marketing4restaurants.com. He says anyone in business should always seek feedback from their customers.
“Bad feedback is more important than good feedback, because it lets you know where you’re letting the customer down and you can start working on this issue,” he says.
“It’s much better to get back feedback that you can improve on rather than lose a customer, or even worse, have that customer post that they’re unhappy online or tell friends.”
Sydney-based sales strategy consultant Cian McLoughlin helps both large multinationals and SMEs funnel customer feedback. He says businesses should seek feedback every six to 12 months.
“We are all in business to drive relationships with customers, secure sales and make money, and the best way to do that well is to seek feedback from your customers,” he says.
“Think of it this way: seeking some feedback is the best way to get a return on investment, even when you lose a sale.”
Start the process by deciding who to target for feedback, which will depend on your business objectives, McLoughlin says.
You may wish to seek feedback each time you come up against a particular competitor, if the business you’re going after is worth a certain dollar amount, or if the business is coming from a particular category you want more business from, he says.
“You want to spend a bit of time working out what sort of feedback will help shape your business so that you have consistent measures once the feedback starts rolling in.”
“You want to build a consistent set of questions that can be asked across all businesses, and then add in some more specific questions where appropriate,” he says.
There are a number of cheap or free online tools available to a business wanting feedback, including Survey Monkey, which provides the formula for businesses to design an online questionnaire.
Or there’s kissinsights.com, which enables businesses to survey visitors to its website. Another online tool worth considering is LinkedIn, which offers a number of tools to capture customer feedback.
The best time to alert a customer that you want feedback from them is when you first meet them, McLoughlin says.
“Not only does this demonstrate that you are a professional organisation, but if you’re at the start of the process, it’s much easier to get a commitment from the customer about giving feedback when you haven’t yet lost or won their business,” he says.
“There’s no emotion yet invested in the relationship from either side.”
A business that has agreed to provide feedback won’t want to spend more than 45 minutes answering your questions, he says.
Tribe says a business needs to approach around 100 people in the hope of achieving a response rate of around 30%.
“You need to be approaching customers that are engaged and connected to your business as they’re far more likely to partake,” she says.
Then make the time to sit down and assess the feedback and consider where you should make changes to your business, McLoughlin says.
“If a number of people are making suggestions that you change some aspect of your business, it’s time to reconsider your approach to doing business,” he says.
Once your business is in the process of implementing changes as a result of the survey, report back to both those who took part and those that didn’t respond to your survey, Tribe says.
“This shows businesses that you’re prepared to listen and act to feedback, which may mean that those that didn’t do business with you this time may be prepared to next time,” says Tribe.
Seeking feedback is one thing, but it is far more difficult to deal with customer feedback that you weren’t expecting.
But it’s a part of entrepreneurial life given the rise in social media, with negative feedback often posted online about a business for the world to see.
But you can turn this negative into a positive, albeit chastening, experience.
The newest feedback online mechanism comes from former Cudo CEO Billy Tucker, who recently launched customer feedback site Yabbit.com.
The site enables customers to provide direct feedback to businesses they interact with, with businesses registered to the site able to promote it to customers, who then give their feedback through a private channel back to the business.
The feedback may be harsh, but you don’t have to endure the public drubbing you may be subjected to if you merely left unhappy customers to vent via Twitter or Facebook.
Tucker’s new site is yet another reminder that businesses can’t afford to bury their head in the sand.
The key is to make sure that whether the feedback comes over the front counter from an unhappy customer, in an email or via a social media site, make sure you have a policy in place to deal with it that everyone in your business understands.
Mark Copeman, co-founder of customer satisfaction website Customer Thermometer says a quick response to any feedback is paramount.
“Everyone makes mistakes, and the best way to respond to complaints is to listen very carefully to customer issues and act upon them immediately,” he says.
“A bunch of flowers, a card, even a simple apology where service has failed to hit the mark can have a huge impact.
“What matters is the customer’s perception of the situation, not who is actually at fault. Make sure you fix the process that’s broken rather than leaping to conclusions about staff or customers.”
How I dealt with unsolicited feedback
Sydney-based Edwina Gleeson launched online retail store Max Gabriel last year, which provides luxury business shirts for men sized 46 to 52.
Gleeson admits she was devastated when a customer complained she didn’t have a waist measurement in her sizing chart and was disappointed with the fit of the product.
“It felt so personal because I take real pride in my research and I did in my sizings,” she says.
“Although the customer was correct, I hadn’t included a waist measurement in my sizing chart.”
But Gleeson swallowed her pride and offered the customer a full refund that would be reimbursed when she returned the shirt.
“I also thanked her for the feedback and informed her that I had now added waist measurements in my sizing chart.”
The feedback also prompted Gleeson to adopt a ‘try before you buy’ policy.
Now, she either posts a sample shirt to the customer in their size with a return envelope, or if they’re in the Sydney metro area, she will take a sample shirt to the customer to try.
“So although the negative feedback floored me, it has had quite a positive outcome,” Gleeson says.
Five steps to dealing with feedback:
- Be positive about all feedback. Not only does it encourage more honesty, it promotes constructive feedback.
- Don’t ask for feedback if you don’t have time to acknowledge and act upon it.
- Let your clients know: ‘We asked, you told us, we listened’. This principle should be applied across all facets of your business.
- Acknowledge all feedback by making a phone call or sending an email.
- Hold staff meetings to enable staff to hear about feedback results and offer a collaborative way to address the issues.
Source: Felicity’s Law, business management and operations improvement specialists