This past Surfaces 2011, Matt and I met in person. We spoke about the customer experience and the role of feedback. After his presentation, "How to use customer feedback to improve cash flow", I invited Matt to share more customer feedback perspective on Flooring The Consumer.
Why customer feedback matters even in flooring or... The Opiniator 6 Laws of Customer Feedback
My recent Surfaces 2011 presentation on "How to use customer feedback to improve cash flow" is based on a very simple premise: if you retain your current customer base through the use of actionable customer feedback, your business will make more profit. I argue against the indiscriminate use of marketing dollars to acquire more business, when the business has no systematic way to review whether what it is currently doing is enough to retain its current users.
For a quick snapshot of the rationale, check this 5 minute Youtube video:
The presentation generated the following question from a hardwood flooring installer:
It's such a critical question that I thought I would lay out - no pun intended - here the six major reasons why, no matter how long the period between purchases, feedback matters. Here, then, are the Opiniator 6 Laws of Customer Feedback.
Customer Feedback Law 1: Knowledge over Speculation
Most businesses will never get direct feedback from customers, no matter how hard they try and no matter the quality of the job. What this means is that businesses don't KNOW what customers really think. If no one complains, this should not be the green light to assume the business is doing well.
- The only true metrics here should be repeat business and customer ratings (via feedback).
- Systematic customer feedback across all aspects of your business delivers knowledge.
- Knowledge leads to better thinking which leads to better decisions.
Customer Feedback Law 2: Purchase Cycle unknown
Anything can happen, so it may be much less time than you think before an old customer considers flooring vendors again. Maybe he has more properties, maybe she wants maintenance, maybe you have other products to sell, maybe he becomes a subcontractor for someone else. A customer once active is always an opportunity no matter the average time between purchases.
Customer Feedback Law 3: Negative Publicity Exposure
Through social media, both B2C and B2B, the opportunity for adverse publicity because of poor customer reviews is enormous. Whilst this customer may not buy from you again, or not for a while, the impact in the short term could be massive.
Googling 'Flooring Install Complaints' returns 5.6 million results !!! That's a lot of customers telling everyone why they should NOT buy from you and most of this can be prevented if you engage and get feedback whilst performing the service. It's always much better to salvage and fix ONE issue than try to recover credibility from a poor review.
Customer Feedback Law 4: Continuous Improvement
Every business has room to improve - period. Without relevant, actionable customer feedback, the business CANNOT know what it has to do better. Furthermore, WITHOUT customer feedback, the business is jeopardizing opportunities to win new business. It's simply arrogance, folly or ignorance to assume you know or can guess what the business has to fix.
Think about the type of dramatic improvement to the business if you asked these two questions to every customer.
- "Please rate your satisfaction with us on a scale of 1 - 5 where 1 is very dissatisfied and 5 is very satisfied"
- "Now what is the ONE suggestion you have for us that would get us to 5 or ensure you select us for future work"
Customer Feedback Law 5: Word-of-Mouth is the Highest Return
In most cases, simply asking for feedback is guaranteed to generate positive word of mouth. The reason is engagement and the fact that you are pro-actively asking for collaboration to become better - and customers respond by telling others.
Word of mouth is:
- Builds the brand
- Can be leveraged
- Is viral -
- And of course means you no longer have to spend as much acquiring new customers.
Customer Feedback Law 6: Strategic Answer Opportunity
How often does a business have a genuine opportunity to ask and have answered the more strategic questions? For example:
- If you did not buy from us, who would you have bought from (choose from competitor list)- generates a list of competitors
Next blog post: How do you get the feedback?