Go Far Outside to Keep Customers In (And Maybe Bring a Few Back)


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Rightfully so, most discussions of Outside-In customer process focus almost exclusively on existing customers. What are the strategies and processes that can be used to increase customer retention and grow share of wallet? These are of course crucial business issues, especially to an organization that is committed to an Outside-In philosophy and seeks growth by focusing on existing customers. While not ignored, far less attention is generally given to lost customers and the issues that contributed to their departure.

In the work that I’ve done over the past 25 years, one of the fundamental conclusions that I have reached is that companies should spend considerable effort understanding not just the positive factors that influence customers to stay, but also those factors that push them away. My experience is that even those companies that assert that they are Outside-In and “really care” what their customers think will often recoil in near terror when they learn what they should do in their research to learn what their customers really think about them. Here are two pointers that you can use to enhance the overall quality of the information you receive from your customer research, but be aware that some persons in your company will probably not want to hear this:

Do you embrace customer complaints?

By embrace, I mean do you truly welcome this negative information into your systems as opposed to grudgingly accept the presence of these complaints? We all know that praise and compliments are so much nicer – but they are also fundamentally easier for the company because they imply that you do not need to change.

If you truly want to listen to complaints, you need to give people permission to tell you what is bothering them. Because most people are, at their core, fundamentally nice people, they do not want to complain. (Yes, we all know exceptions to this general rule!) They will, however, complain when the situation has gotten so bad that recovery is nearly impossible. So how do you give people permission to complain in research studies? That’s easy to do, but sometimes difficult for clients to swallow. You ask at least some — not all, but at least some — questions phrased in a negative context such that agreement to the question indicates the presence of dissatisfaction or complaints.

Almost invariably, however, the prospect of phrasing questions along the lines of “How often in the past 3 months have you experienced problems with your XYZ product?” will produce howls of protest. “You can’t do that. You’re leading them on. You’re creating problems where none exist.” But there are two especially disingenuous comments that I frequently hear that warrant special attention.

The first common objection is in “Shouldn’t we phrase all of the questions in a neutral sense so that the customer tells us what they believe?” A fair comment, but with the possible exception of qualitative open-ended questions it is nearly impossible to truly phrase a question as completely neutral. Try it, and you’ll see how difficult it is. The classic recommendation question used in Net Promoter Score (NPS) research can serve as our example. It is not neutral; it has a mild positive valence because recommending is inherently involves a positive statement on the company. To be sure, the scale is anchored where 0 implies “Not At All Likely To Recommend” the company, but note that taking that position involves endorsement of the negative.

Which brings us to the second common complaint that I hear: “Won’t the people who are dissatisfied tell us that by disagreeing with the question?” (Or , in the case of the NPS measure, by saying that they wouldn’t recommend the company.) Ideally they would, but in practice they won’t until the problem has gone beyond the level of being an “irk” (where proactive steps can resolve the problem) to where it is a full-blown complaint with a base level of intensity. When that level of intensity is reached, it may be too late in the process.

The bottom line is that you must overcome the natural tendency of people to want to be agreeable by giving the right to say they have a problem when their issue is still in its nascent state.

Solicit feedback from both rejecters and non-users.

In particular, rejecters can tell you what it is about your company that drove them away. In that sense, their information is similar to the advice given in the first point about embracing problem-based feedback coming from existing customers. Non-users — especially if they are in the market space — can tell you what has kept them from your door.

One of the difficulties of doing research with rejecters is that may have to deal with such a level of anger and vitriol that some of the data will have little value — it will border on rants and thus be nearly useless. Some respondents will be so negative that they will “ding you” on all parts of your process — even those that they were objectively satisfied with during their time as a customer — simply because they seek to vent their hostility. Even those data have value. First, consider that aspect of the research to be therapeutic; let the former customer get it off their chest so that everyone can move on. More relevantly, however, I treat the volume of “rant responses” as an index of problem severity in the rejecter population, and as such the rants indicate the height of the mountain that you have to climb to solve your customer-facing problems

In addition to the rants, you will get more nuanced responses where former customers identify what it was in your processes that made them leave, and from non-users you will get information about the features that your competitors provide that are especially attractive.

Yes, improving your customer-facing processes means that you enhance that which you do well and is valued by customers. It also means that you need to look at those areas where performance is less than stellar, but you need your customers to tell you where that is.

David Mangen
Mangen Research Associates, Inc.
David Mangen, Ph.D., is founder and president of Minneapolis-based Mangen Research Associates, Inc., which provides full-service research and analysis services on customer behavior. Formerly a statistics professor at the University of Southern California, Mangen has authored or co-authored nine books.


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