Successful executives know that it’s much less expensive to retain existing customers than to find new ones. And they know that keeping established clients happy is a proven route to increasing sales, and the bottom line.
Increasing customer retention by 5 percent can result in increased profits of 25 to 95 percent, according to Bain & Company.
Knowing what your customers want, and knowing what they think of your products and services, is essential to keeping them happy and to increasing the business they do with you, not to mention generating more referrals. Conducting regular surveys is one of the best ways to increase your understanding of your customers.
The survey doesn’t have to be complicated. Short and focused is best. Ask basic questions at regular intervals and use a consistent rating system. Then carefully analyze the results.
There are two types of surveys, transactional and relationship. The transactional survey solicits feedback immediately after an encounter; businesses frequently invite participation by printing an online link to a survey site at the bottom of a sales receipt. Relationship surveys solicit input from decision-makers who have an ongoing relationship with the company; they are usually taken at regular intervals (often quarterly) throughout the year.
Setting up the survey
Three key factors in conducting a successful survey are distributing it efficiently, reaching a large enough sample to secure reliable results and using an effective satisfaction scale.
While an in-person or telephone interview is sometimes appropriate, the internet has become the preferred medium for conducting surveys. Using the internet is faster, less expensive and eliminates the filtering that occurs when an interviewer is recording the responses. If a portion of your customer base still does not use computers, you may have to include some offline sampling — by phone or mail — to ensure that your sample reflects your entire customer population.
For reliable results, most experts recommend that you sample enough customers to secure accuracy of plus or minus 5 percent. The formulas to determine the required sample size are complex, but there is an easy solution. Just type in "sample size calculator"; on your preferred web browser and choose the calculator you would like to use. Look at the tables provided, find the number of customers your business has and you'll see how many surveys you will need to complete to get an accurate sample.
The most commonly used satisfaction scale is the 5-point model, with 1 standing for very dissatisfied and 5 for very satisfied. Depending on the wording of the question, the wording of the response can also be modified. For example, in some situations, 1 might stand for "fails to meet expectations" while 5 would mean "greatly exceeds expectations." READ MORE
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