We all are well aware of a simple fact in marketing: acquiring new customers is 10 times more difficult and expensive than retaining existing ones. This is one of the fundamental driving forces behind the widespread adoption and interest in CRM and related customer-retention strategies.
A research study by Rice University Professors Paul Dholakia and Vicki Morwitz, published in the Harvard Business Review, concluded that the simple fact of asking customers how a company was performing by itself proved to be a great customer-retention strategy.
In the research study, conducted over the course of a year, one set of customers was sent a satisfaction and opinion survey and the other set was not surveyed. After a year, twice the number of people continued and renewed their loyalty toward the company in the group that took the survey.
The research study offered a few interesting rationales (based on consumer psychology) behind this phenomenon:
- “Satisfaction surveys reinforce the customers desire to be coddled and reinforce positive feelings.” This stems from part of the human psychology that wants to “appreciate” a product or service they already like. The survey feedback loop is merely a tool to express this. The survey is a vehicle to “interact” with the company and reinforces the customer's commitment to the company.
- “Surveys may increase awareness of auxiliary products and services.” Surveys can be considered vehicles of communication—both inbound as well as outbound. Most people consider surveys as a data-collection exercise. When conducting consumer surveys, they can also serve as a medium for disseminating information. It is important to note a few caveats here:
a. In most countries, including the US, “selling under the guise of research” is illegal.
b. However, we all know that information is disseminated while collecting information.
c. Additional disclaimers may be added to the survey to make users aware of this fact. For example, “We will be collection your opinion and informing you about products and services that have come online in the last year.”
- “Induced Judgments: The very process of asking people their opinion can induce them to form an opinion on something they otherwise would not have considered.” This is a very subtle and powerful argument. This argument is analogous to the product placement strategy currently used for marketing products in mass-media, such as movies and television shows. One example is the extensive and exclusive use of the MINI Cooper in the blockbuster movie The Italian Job.
Surveys should be considered as a critical tool in the customer relationship dialog. The best thing about surveys is its ability to carry “bi-directional” information.
The research conducted by Dholakia and Morwitz shows that surveys not only get you the information that is critical for your business but also enhances and builds on the established relationship you have with your customers.
Continue reading "Ask and You Shall Receive" ... Read the full article
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