Getting Customer Feedback Better, Faster, And Cheaper

Businesses spend billions and obsess over figuring out what their customers think—but they shouldn't. Here's why you can no longer make excuses for a lack of useful feedback.

Every year businesses globally spend $33 billion on market research, essentially trying to decipher what our customers are thinking. As a cofounder of a company focused on helping companies gather insights so they can make decisions based on facts, not opinions, I’m a beneficiary. Last year, our customers sent out more than one billion surveys, many focused on understanding customers and markets. But I believe the billions businesses are spending on this stuff should be a mere sliver of what it is today.

Because listening to your customers just isn’t that hard—or expensive—anymore. Here's why:

1. Even the little guy (or gal) has reach.
We all have a lot of direct, inexpensive touch points with our customers. No more intrusive calls at dinnertime or neglected mail-outs. We don’t need a fleet of customer service reps sitting at desks or an envelope-stuffing machine. Instead, we have Twitter, Facebook, and customers who are generally amenable to giving out their email addresses. Even my 80-year-old grandmother is active on Facebook. She checks her email daily.

This is perhaps obvious, but also very powerful. It means a lady in a barn can get nearly instant feedback from thousands of people. No kidding.

That’s what Rebekah Ashcraft does. Working out of a century-old renovated barn in rural Kentucky, Ashcraft is a one-woman research team working for a dozen different clients, including national restaurant chains and retailers. She creates and sends out some 100 surveys a year to gather insights around customer satisfaction, product development, and employee issues. Her response rates can be upwards of 80% and remarkably fast. She’s generating reports for her clients in a week, not weeks.

One thing I’ve learned over the past few years in this business is that people actually want to share their opinions when the format for doing so is easy. You don’t have to be annoying about it anymore.

2. This shouldn’t cost you more than a weekend in Vegas.
No one had to know I started Qualtrics in my Dad’s Provo, Utah, basement. Qualtrics is cloud-based software, so customers didn’t need to see an impressive office lobby. But perhaps best of all, I had access to inexpensive software that powered us in those early days.

We ran on Salesforce pretty much from the beginning. It had more functionality than we needed, but much less than the previous industry standard, Oracle (and the myriad software firms it gobbled up, including Peoplesoft and Siebel Systems). This meant we could actually afford it.

Marc Benioff saw earlier than most that software could do a lot of the work previously left to people and expensive custom code. For small businesses in particular, that shift meant huge cost savings and access to great technology. I’m seeing that all over again in several areas—file storage and collaboration (Dropbox, Box), marketing tools (Marketo), productivity software (GoogleDocs), and in my industry of data collection and analysis.

We didn’t have a choice. In those basement days, Qualtrics was selling exclusively to academia. These are not flush-budget operations, but they needed our platform. Selling to spendthrifts forced us to "productize" aspects of data analysis that the bigger shops, selling to big-budget customers, were staffing with nicely compensated researchers, sometimes PhDs and programmers.

They were doing a lot of time-consuming customization to make their analysis digestible across an organization. We built our software to be easy enough for an intern but sophisticated enough for a PhD. If we hadn’t made it easy to use, we would have been inundated with support calls and ultimately run out of business. This approach now means that instead of hiring dozens of people, our customers can employ just one person at a fraction of the cost and still get hefty research.

Managed-care provider Centene does billions in sales annually. The firm’s research team is Susan Topel. That’s it. Last year, she sent out 130 surveys to some 120,000 people using her PC. Topel figures all that data-fetching would have cost her $1.2 million to outsource to experts, but instead she spent less than 20% of that. She says her results haven’t suffered. She used visual tools like heat maps to keep people engaged in the surveys and very easily imported results into PowerPoint so her executives could easily see and act on the feedback.

One of the most powerful people in the gaming industry today was unceremoniously let go from Electronic Arts five years ago. Michael Gluck had been a member of the research, sales, and production teams before falling victim to budget cuts. It turned out to be a blessing in disguise. Now he runs VGMarket, a research operation with a client list that includes every major gaming company (Activision, Blizzard, EA, Disney, Microsoft, Sony, and Zynga, among others).

Gluck is cranking out survey results, often feedback on yet-released games, in days and at a fraction of the cost of his competitors. Best of all, he gets to benchmark his client’s games against prior hits and losers, for example with a "fun" score. That’s unique insight that is relatively simple for him to do and remarkably valuable to his customers. This was possible a decade ago, but it would cost a fortune.

3. While feedback is nice, results are better.
The old model of gathering customer data is fragmented. Results trickle in, an expert or dozens make sense of it, then a consolidated tally goes to a business leader whose job it is to act. That process might take months or in a best-case scenario, weeks. It doesn’t have to be this way. Software-as-a-service can cut that cycle down to days. Customer insights gathered using Qualtrics, for example, can go straight to Salesforce so that a customer’s rating of a brand is linked to their purchase history and any other descriptive tidbits that might give a salesperson better insight for that next pitch.

Getting data is a wonderful thing (again, I make a living doing this stuff), but it only has value if it gives you real insights. Why are customers fixated on one part of your website and dropping off at another? Why is one product selling well in these five stores and not your other 25?

Bonobos, for example, is pioneering a new way of selling men’s fashion entirely online. Data has been a big driver of the company’s success. Instead of assuming they know best what their customers want (the Steve Jobs approach), Bonobos asks a lot of questions via two dozen surveys a year. One of the company’s biggest recent hits is a better-fitting dress shirt. The design of this thing was customer led. Bonobos peppered customers with questions about how they wear their shirts and why they return shirts, where the fit is generally good, and where it isn’t. The outcome: Bonobos sold through 50% of the newly launched line in just one week. Give customers what they asked for and they’ll buy it.

My hunch is we can do even better. We are in the early days of using mobile as an effective customer touch point. Think about how your own opinion on a product or experience shifts even hours after. Chances are, you’ve moved on to the next thing and a brand asking you "for just a few minutes of your time", no matter how opinionated you might be, is a nuisance.

But what if a hotel chain could grab your attention just as you’re waiting in line for a taxi or boarding a flight? Your opinion—good or bad—is fresh and you haven’t yet been distracted by your post-trip to-do list. You want to share your views. You’re in that moment. Not only might the hotelier get more accurate, detailed responses; they’ll likely get more of them. And better, cheaper, faster feedback means better business results.

Bottom Line: Listening to your customers just isn’t that hard or expensive anymore, so no more excuses.

—Ryan Smith is the cofounder of Qualtrics.

[Image: Flickr user cta web]

Add New Comment

9 Comments

  • Arshad Amin

    Well great article but I wont agree with the point "Give customers what they asked for and they’ll buy it" this is where I believe most of the companies get it wrong. No wonder that is the reason as according to an Hbr article ("Closing the customer feedback loop" by Rob Markey, Fred Reichheld & Andreas Dullweber) that ""Our research shows that most customers who end up defecting to another business have declared themselves “satisfied”or “very satisfied” in such surveys not long before jumping ship".

    I believe there is a dark side of feedback that we overlook, now in above statement the author states give them what the want and they will buy it. Right, this in other terms would mean customer care about only two things, number one their needs and number two your company (as long as it satisfies those needs). And they jump ship when their need changes that you as a company can't satisfy.  Plus when you conduct survey in whatever form from these customers they will point out what they like about your product instead of mediocre aspects. so you end up improving the aspects that only a specific segment in your target market prefer, or you think everything is on track because feedback is positive but at the same time you are wondering why your satisfied customers are leaving, why are your sales stagnant, why is your market shrinking.

    Plus it is hard to make customer point out the bad aspects for many reasons number one they don't know perhaps because they are occupied with what the need and that's it, number two their decisions are based on emotions most of the time than on rational processes. Infact every decision can only be taken emotionally without emotions nobody can take any decision whatsoever according to research by leading neuroscientist and social
    thinker Antonio Damisio. So they won't be able to tell you rationally what they like about your product which compelled them to buy(decision) your product. so again your approach of feedback is flawed from the beginning.

    Now interestingly enough I read a very insightful article on feedback about the dark side which will help the feedback strategy developers to over come it.
    you can read it over here     http://marketing-theories-and-...

  • danmac30

    What a powerful and wonderful time. The information age. All we have to do is listen to gather information but by engaging we can change the conversation.

  • Dora Limbert

    Hi Ryan, Love the article. Just would like to add that to target the right feedback much faster and more effective is not as complicated at it seems. Receiving 'on site' and 'real time' feedback is the best way to go about in achieving accuracy and effectiveness from what your customers think. Take for example the feedback tool Geteco for example which enables for such real time feedback. Whats great about achieving real time feedback is that managers are able to actually respond immediately to these feedbacks. Timely and accurate feedbacks is the key...  

  • Victor Hainman

    Greeting Dora, your comments caught my eye as I have heard of this Geteco Customer feedback system before as well. Was wondering if you have personally experienced it before? and if so, how has it worked out for you so far in terms of receiving more accurate and useful feedback from your customers.....Your response will be much appreciated as i am on a look out for ways to improve my customer feedback process as well...Thanks

  • Micah Lisonbee

    Victor, I'm developing a product that is similar in concept to Geteco. I would love to get your feedback on what you'd like to see in a product like this... Let me know if you'd like to touch base. Find me at twitter micahlisonbee

  • Haroldsheems

    Hi there Ryan, love the article. Often enough businesses forget to or do not bother to 'act' on the feedback they receive from their consumers. Like mentioned in the article the time process can take forever as well. That's why companies should start eliminating methods such as feedback forms and surveys as they are pretty much ineffective these days and take upon real time mobile feedback interaction systems which have emerged from the market such as Geteco ( www.geteco.com ) that can enable consumers to leave immediate feedback straight to managers and receive immediate responses from them as well. Time for businesses to start acting and achieving results.....cheers