Good customer research is a good investment
“Why Improving Quality doesn't Improve Quality” is the title of a challenging article in California Management Review, published over a decade ago but nevertheless still very appropriate to business. It opens with the story of a terrible crash where two planes collided in mid-air, despite being equipped with all the latest, most sophisticated, and of course highly expensive technology, and having highly-trained and competent crew. An FAA investigator, when asked about this paradox, commented sadly “Sometimes they need to look out the window”.
It can be all too easy to lose sight of the main game, and become too preoccupied with internal processes or micromanagement and forget the simple basics, such as remembering that satisfying customers is good business and leads to long term profitability - the equivalent of the pilot just looking out of the window every now and again!
For some years academics had been guilty of that precise problem, not helped by the nature of academic research which encourages very detailed examination of a specific issue, obscuring the big picture. But recent books like “Linking customer and employee satisfaction data to the bottom line” and “Customer Satisfaction Research Management” provide thorough theoretical and empirical treatment of the linkages between customer and employee attitudes and corporate financial performance, using some quite complex psychometric measures and statistical analysis. But the fundamental proof is easy to understand – for example, the American Customer Satisfaction Index, which has conducted more than a quarter of a million consumer interviews over the last ten years, has conclusively shown that customer satisfaction is strongly related to financial performance.
The blind pursuit of “relationships” in marketing is a classic example of not looking out of the window. So many businesses have invested in customer relationship marketing – and countless millions of dollars have been spent on software to “manage” those alleged relationships – that managers overlook the fact that many customers just don't want to have a relationship with their suppliers – they just want simple on time delivery of good products at a good price. Expenditure of vast sums of money on CRM software does not help this – neither does it help manage those really valuable customers who actually need, and are worth the investment in, a real relationship. Give customers what they want, within reason – and they'll be satisfied! Simple! Satisfying customers, on their terms, is good business.
References:
“Customer Satisfaction Research Management” Derek R. Allen, 2004, American Society for Quality, Quality Press.
“Linking customer and employee satisfaction data to the bottom line”, Allen and Wilburn, 2002, American Society for Quality, Quality Press.
“Why improving quality doesn't improve quality (or whatever happened to marketing)”, by Raymond Kordupleski, Roland Rust, and Anthony Zahorik, California Management Review, Vol. 35, no 3, Spring 1993, pp. 82-95.