How Do Your Customers Define Value?

All for-profit organizations are striving to provide value to their customers while functioning in competitive business environments. And that value from their customers' perspective is what they get vs. what it cost them.

Organizations provide products, service & customer experiences. And customers pay the price charged for the product and/or service as well as the effort they have to exert when making a purchase. Each of us can buy a shirt or blouse from either Nordstrom or Wal-Mart but the value equation for each of those two retailers is quite different.

When customers perceive they are receiving value, it initiates a positive chain reaction - customers becoming more likely to buy & to recommend the supplier which, in turn, drives market share, profit & organizational growth. And organizations can best leverage this linkage by thoroughly understanding, at least, their primary customers' definition of value.

Not understanding customers' definition of value is a root cause of customer dissatisfaction. And this vital information & understanding usually can't be accurately obtained informally or anecdotally. A Customer Satisfaction Survey effectively designed & conducted - with an action plan developed & implemented around the feedback - will more than pay for itself.

When you are surveying your customers, our experience at The Focus Group has shown the following to be key steps:

#1 Determining what your company & those who will use the customer feedback need & want to accomplish:

• the type of information that will allow the users of the feedback to achieve their objectives for the survey

• what the users plan to do with the data & how they will determine whether the survey project was a success

 #2 Deciding on the customer segment[s] you want to survey - options include those customers who:

• purchase a particular product or service

• buy in high volume and/or frequently

• are likely to grow & provide you future business

• have similar demographic characteristics, etc.

 #3 Determining the product and/or service attributes that are most important to your customers & therefore are what you need to measure - frequently surveyed are industry-specific forms of:

• reliability

• responsiveness

• assurance

• empathy

• the tangibles within the physical environment in which the product is purchased or the service is received

 #4 Selecting the best survey methodology based on the type of information you are seeking, the availability & number of customers you want to survey, the time & funds available, etc. - optional types of surveys include:

• electronic

• focus groups

• face-to-face interviews

• telephone

• mystery shopping

• customer advisory boards

 #5 Properly designing your survey instrument by:

• using brief, simple sentences & a vocabulary familiar to your customers

• grouping & asking your questions in an order that is logical to your customers

• clustering your questions around common topics

• placing interesting, informative questions first & any sensitive items last

 #6 Determining your sample size depending upon:

• the degree of confidence in & statistical significance required of your customers' feedback

• the degree of similarity amongst the customers surveyed

 #7 Creating a follow up action plan to make your organization 'famous for' providing your customers with the product & service attributes they most want - follow up initiatives often include:

• using the customer feedback to make process improvements

• incorporating the feedback into your business and/or strategic plans

• turning your customers' expectations into employee standards of performance, etc.

 Developing & conducting a Customer Satisfaction Survey 'takes a little doing.' But your customers will always have their definition of value & buy based on whether they perceive that you will satisfy those expectations.