Friday, July 17, 2009

Good News and Bad News

There was an interesting short article in the WSJ on Monday, July 13th. The headline read "The Customer Knows Best." The sub-headline was "Thanks to the Internet, companies can easily find out what consumers think. They just ask."

First, let's review the good news. The WSJ appears to be tuned into the notion that customers count - a notion to which I agree. In the article, the author, Kelly K. Spors, sees that customer input can help a company make better market decisions when they get feedback from their customers. Once agian, i am in complete agreement. The great advantage to using the Internet to connect with your customers is that the process is very timely and cost-effective. Ms. Spors points out the financial costs of having a customer survey developed and implemented by a professional consultant can be too great for start-ups and small companies. These are very valid points and by themselves would seem to point out that any start-up or small company that wants to improve their business would be wise to develop an Internet survey that will give them feedback on virtually all aspects of their business. The survey might focus on product features, service delivery or any other aspect of their business. This sounds almost too good to be true.

The dark side of this approach is that many surveys, even those developed by professional consultants are often flawed and lead to mis-direction as a result. To imagine that a start-up or small company would be able to develop and create a valid survey is asking a lot and has, in my opinion, very little likelihood of yielding valid results. If building and implementing a survey were a simple task, there would be little reason to offer advanced degrees in survey design and analysis.

I think there is a place for the start-up or small business to use an Internet survey. I am sure that if the survey is kept within the following guidelines, the result would be helpful in guiding the company in making better strategic decisions. Here are some simple principles that will provide some assurance that the survey and its results are valid.
1. Do not worry about whether or not your survey is statistically valid.
2. Send it to the customers you have a reasonable relationship with and can trust their responses.
3. Keep your questions simple and focused on:
a. a few product specific areas (e.g. is the product too heavy?)
b. a few service specific areas (e.g. were our service people knowledgeable?)
c. was the value of our product/service consistent with the price?
4. Do the survey quickly and make sure that the customers who responded get an acknowledgement and thank you from you PERSONALLY.

The bottom line is that surveys should be done by someone who is knowledgeable about survey design and analysis. This is not always a realistic probability. Since not everyone can afford having a survey done in this manner, the survey should be simple and direct with no concern about statistical validity. The survey for the start-up or small company should almost look like a personal letter from the company to a few key customers.

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