Kathy (host):
Well hello there and welcome back to another episode of "Help My Business is Growing", a podcast where we explore how to grow and build a business that is healthy and sustainable. I'm your host, Kathy Svetina, a fractional CFO and the founder of New Caster Financials, a company where we believe that everything that you do in your business is eventually going to end up in your finances, and to have healthy finances is to have a healthy business.
Kathy (host):
The big question here is, how do you get there? Well, this is where this podcast comes into help. If you want your business to grow, asking and understanding what your customers truly think, is a given. But you'll be surprised to find that many companies overlook this critical step. They don't have a process for doing any kind of customer research or asking their customers for feedback. They either dismiss it as it's too expensive, or it's too time-consuming, or they think that they already know what their customers want. But if you don't have a deep understanding of your customers' needs, preferences, and of course, their pain points, you risk making decisions based on guesswork rather than data, and neglecting customer research and feedback can lead to missed opportunities, ineffective strategies, and you even risk business failure.
Kathy (host):
So how do you start doing customer research? What questions should you ask to get useful customer insights? And how do you use this feedback to help you make better business decisions? As a quick reminder, all of the episodes on this podcast, including this one, come with timestamps for topics that we discuss, and each one has its own blog post too. We do that because we know that some people like to actually read versus listen or some like to scan to see what we actually are going to be discussing in this episode before they commit to 30 minutes of this conversation. So if this is you, go ahead and use those resources. I promise they are very, very useful. You can find all the links and the detailed topics in this episode's show notes.
Kathy (host):
My guest today is Darlene Campagna. She is a customer acceleration consultant and owner of Direct Opinions. Direct Opinions is a company that uses customer experience research to help companies turn business insights into powerful, actionable strategies that accelerate growth and profitability by finding the dollars in their data. Before joining Direct Opinions, Darlene spent 11 years working for a national IT consulting company and took its Cleveland operations from approximately $2 million in annual sales to over $27 million in just six years. This is going to be a really good conversation. So please join us.
Kathy (host):
Darlene, welcome to the show.
Darlene (guest):
Thank you so much. I appreciate it, Kathy.
Kathy (host):
It's great to have you here. And we're going to be talking about something really important, and that is customer research and feedback. Because when you're growing a business, tapping into what customers really think seems like a no-brainer, at least it does to me. But you know, it's surprising how many companies skip this step. So I'm curious, why do you think that businesses put customer research on the backburner, especially when they're developing their strategy and plans?
Darlene (guest):
Yeah, it's a great question. I'm always surprised by it as well. But I think through my years of experience, what we're recognizing is that sometimes people hear the word "research", and they think big, long, time-consuming, and expensive. And so they don't necessarily want to put in the time, money, energy, and resources, to gather customer insight. Sometimes it's like, "Hurry up. Now, now, now we gotta go, we gotta get our strategy done." That happens a lot. But also, I think a lot of people just make these assumptions that they know what their customers are thinking and feeling. And, "I know my customers, if they had an issue, they would come to me, they would tell me", and that is not always the case, as I know, through my experience. So especially considering the changes over the last however many years since COVID, everything's changed - business has changed, service, support, hiring teams - so much has changed with organizations that it's so critical now, to really make it a point to go out and figure out what's new with your customers, what's different, what's changed? How has their business changed? How are their needs changing? And how do we need to adapt to that? So yeah, very often, it's "I don't want to spend the time, money or resources" and it really doesn't take that much to do it. I think that's certainly an assumption out there, but not necessarily true. And yeah, and then again, I just think that a lot of people just have these assumptions that they already know the answers and they don't need to really go search.
Kathy (host):
So let's talk about what does it actually take to do customer research? Because before we started recording this podcast, when we had our prep session, I shared that I actually did customer research for my own small company, and that took probably about two or three months, and I'm a very small business. So I can definitely relate to this feeling that if you are a multi-million dollar corporation, maybe even you have a couple hundred million dollars, it might take a long time. So I can't really blame companies for that. But let's dive into this. What does it really take? And how long should people expect that it's reasonable for them to do customer research?
Darlene (guest):
Yeah, that's a great question. So usually, we have a couple of weeks on the front end for this setup time, which is very, very important. You know, during that timeframe, when we're engaging with the client, we are number one having a kickoff conversation to meet with their key team members, key executives, to really get down to the bottom of what they really want to learn from their customers. But more importantly, what business challenges have they been having, what problems they might be having? How are we going to utilize this information to drive strategy, growth, to help them make decisions? I think there is an assumption out there that people think customer satisfaction, customer experience, that's just fluff. But really, if done right and done well, you can gather insight and gather feedback that will drive improvement throughout your organization, drive marketing strategy, sales strategy, help you close more, and also drive revenue and profitability. So kicking off this project is really important to get down to what do we want to accomplish here? What do you want to learn from your customers? What problems are we trying to solve? We then take it to the next step with our expertise and our team. And what we end up doing is putting together a draft survey, based upon the folks that we're going to be reaching out to. Typically, while we are creating the draft, or it could be multiple drafts, sometimes we're reaching out to customers, but also target customers, prospects as well, to gather some feedback on why they haven't bought. That's what we're asking the client to go back and put some effort into getting their contact list put together, because that's critical. Making sure that we have a good, clean customer list to work from is important. It's also surprising how many companies don't have a good, clean customer list. So what ends up happening a lot of times in our process is that, sort of an unexpected outcome, but it forces the company to go back and get a clean customer list with updated emails and phone numbers. And that's probably the most challenging part in working with an organization. So they're going to have to roll up their sleeves, sometimes a little bit, to get that list right. But once they get it right, they have it and they can maintain it. Again, there are a lot of organizations out there that do it well, have good, clean lists, can get something to us quickly. But sometimes there's a little bit of effort. So while we're working on survey drafts, they can be working on pulling the list and contact information together. We are only as good as the information we receive. If we get a list of, you know, 250 names, and only 100 of them have phone numbers, that already limits us in some respects. Once we approve the survey, and everybody is in agreement on the questions that we're going to ask, usually takes us a couple of days to do the programming and setup and testing on our end. We typically ask the client to send out a communication to their customers really announcing the initiative, letting them know that Direct Opinions has been chosen as their partner to engage in this initiative. It's important to have an unbiased third party to collect this data and this information. From our standpoint, we see a lot of times companies that want to do it internally or try to do it internally. And it's not always successful, it's hard to go out and ask your salespeople to call their customers up to ask, "Hey, how good am I doing?" Because if there's issues there, they're likely not gonna get a straight answer. So that's why it's always nice to bring in an unbiased third party into the process. So they make that announcement letter, so the customers know who we are. Usually it's an email and they know who we are when we're reaching out. And then we typically start by phone. We love to do phone surveys first. It really gives us an opportunity to be proactive with the folks that we are reaching out to, and also gives us an opportunity to ask questions, to probe if we need further clarification on some answers. We have the ability to do that. And then those folks, usually that takes probably a couple of weeks, depending upon the number of people that we're reaching out to. And then we will send out an email survey for those folks that we don't reach by phone, so they have a chance to take it at their convenience. That process usually goes out with a reminder too, so that'll take a couple of weeks. And then we usually, after that, we'll take all of that data, do the analytics, and usually can get a report back to our customers within seven to ten days. So the bigger factor there, the biggest factor, is really how many people we're reaching out to. If we're reaching out to 200, we probably only need a couple of weeks. If we're reaching out to 2,000, we're probably going to need about six weeks to make that happen effectively. So it can be done in a nice, condensed amount of time, if everybody is rolling. If companies are taking a long time to get their list together and debating survey questions on the front end, sometimes that can make things drag on. But we've got a good system in place, and we are built to do this kind of work on behalf of our clients. So that's what makes it effective.
Kathy (host):
That's really good. It seems like it doesn't take months and months and months on end, which is what a lot of companies think, like for me, from my perspective, I was like, "Oh my god, this is going to take so long." Luckily, it didn't take long. It was really about - it seems like it was forever because I was prepping for it too, from before. So really, from the start, when I engaged the person to when I actually got the result, it was maybe like two weeks at most. But when you're in the midst of it, it seems like it's going to take forever. So I'm really glad that you know, you guys can turn around hundreds and thousands in a couple of weeks' time. But let's go back to it. As you were talking, I had a couple of questions that came to mind. First is the contact list, you know, it's garbage in, garbage out. So you have to make sure that you have the right contact list. But what do you think is, is there a minimum and a maximum that you should contact?
Darlene (guest):
So that is a great question, we always get that question. And my follow-up question to that is, for us to give you a number on what that correct number is of who we need to reach out to, how many people, it's really important for us to understand, you know, how many customers you actually have, and how many that you're dealing with. So I'll give you an example. We did a project a couple of weeks ago for an organization. And they had nine customers that were responsible for 90% of their revenue. And we literally only reached out to those nine customers. And in the end, we completed eight surveys. So two things to keep in mind are, again, what is our purpose for the survey? When we're looking to do customer experience and customer satisfaction, we want to get to as many customers as possible. So it's more of a census approach - how many can we get to? In that case, there were nine, we got eight, in the period of time that we had. We were very happy with that, because again, that accounted for, you know, 80 some percent of their revenue. But if we are looking at an organization that is highly transactional, for example, maybe they've got 5,000 customers, in that case, we're likely not going to get to all 5,000. Where we want to get to is more of a statistically valid number, so that we can say, "Okay, if we apply these results, then we can apply these results to the rest of the group. We're going to pretty much get the same or similar responses." So in that particular case, that's about 400 - that is a good, statistically valid, solid number. The smaller your base, the more you need. The bigger your base, the less you need, once you get to that 400 mark. But, you know, with regard to customer experience and customer satisfaction, between the phone and the email, we try to reach out to everybody. We want to reach out to everybody to hear back from as many of those folks as possible on a research survey. We can get to our 400, and we're good. So again, a lot of it is dependent upon what size customer base you have. If you don't have - if you only have 50 customers - then we're going to work to reach as many of those 50 as we possibly can.
Kathy (host):
Yeah, that makes sense. And when you have a lot of customers, like the example that you gave, you know, when you have thousands, 5,000 customers, doesn't it make sense when you reach a certain threshold to segment those customers? For example, these people are super happy, these people had a bad experience, these people are a certain type of customer. Maybe that's the point when you really start to segment these into their own buckets, or do you just say "I'm just gonna go and ask everyone the same type of question?" How do you deal with that when those types of volumes?
Darlene (guest):
Yeah, that's a great question. So again, you know, a lot of it is based upon how we're going to use this information, you know, moving forward. If we know that there are different segments by product, let's say by product line. In fact, we're working on an initiative right now, where we've got five different product segments. So for the majority of that group, all five customer segments, they are getting probably 75% of the same questions so that we can use it as a benchmark across the organization. But then, because there are different products and services, each of those five segments is getting some individual customized questions for those groups. So we will be reporting on overall results - what did all of the customers say, rolled up overall? But then we are breaking them out by the five different business units or segments so that we can look at responses for those individual groups and look at and compare differences, etcetera. And typically, we're working to get like a minimum of about 175 to 200, in each of those individual business segments. So when we're actually presenting the results, we can look at, you know, "Here are your overall results, but here are the rankings for all of your business segments. Here's who's doing really well, here's who's struggling. Here's why." So to your point, yes, there comes a point at which it makes sense to start breaking it up, so that we can look at differences in patterns and trends. And we can make decisions and make recommendations accordingly.
Kathy (host):
I'm also assuming that when you have so many customers that you have to research and get feedback from, you're not going to get a 100% response rate. Obviously, I think that I would be very surprised if you are. What is the typical response rate that you get? Obviously, if you have nine customers, eight out of nine are going to respond, hopefully. But what is a typical feedback response rate for these types of engagements that you have?
Darlene (guest):
We like to get at least a 50% response rate. So basically, what we ask for is, if let's say we want to get 100 surveys, we'll ask for at least 200 records. So again, if we can get at least a 50% response rate, then that's kind of what we're shooting for. Ideally, we're getting, you know, at least 75%. But we always ask for about two times the number of records we're going to need, because to your point, we're not going to get everybody. So we want to make sure that on the get-go, we're setting ourselves up for success. And of course, that is also based on their number of customers. But if they've got a larger pool, then yes, we're looking for at least two times as many records so that we can work to get as many responses and work toward a minimum of that 50% response rate.
Kathy (host):
And is there ever that you work with customer feedback in person? Or is that more like a panel type of situation? Do you work with that? And when does that play into the customer research?
Darlene (guest):
We don't specialize in that area. So when you think of like an in-person, are you thinking like a mall intercept or something along those lines? Is that what you're thinking?
Kathy (host):
You know, what I'm envisioning, I'm envisioning that's probably because I was watching Mad Men recently, and where they were doing, like research that would have a bunch of customers in there in a room and they would ask them questions and never show them the ads, that type of stuff.
Darlene (guest):
So that's a focus group. Yeah, so we do not do focus group type research. We do panel research, however, you just mentioned the word panel. So when we use panel research is when we need to identify - this is more like for market research - when we are looking to identify a specific segment of people, and a panel allows us to get access to folks that volunteer to participate in taking online surveys. They do get compensated for that. But it gives us access to very, very specific people. So we recently completed a project for an organization and they were looking - this was to gauge awareness for their marketing campaign. It's a campaign that's been running now for a few years. And they basically said, "Hey, we need to figure out is this messaging resonating? Are people seeing it out there in the general population?" So we actually worked through a panel to gather survey results that were statistically valid to the general population, that mirrored our census results. So we had to have a certain percentage of males and females and age categories and where they're located within the United States and such. So yes, that's when we would use a panel survey, which again, that's more market research, which is different than your customer research or customer experience satisfaction research.
Kathy (host):
And you know, I think this is a good way for us to differentiate between a focus group and a panel research, because for the rest of us who are not in this world, just like I did, I mixed the two up. What is the difference between a focus group and a panel research?
Darlene (guest):
So a focus group is basically a small group of individuals, they could be customers, so they could be known customers to you, they might buy your products and services, or they might be a target of an audience you're trying to reach. So for example, I'm trying to think of a great example, the example I just gave you about marketing campaigns and doing sort of a post-awareness campaign. So the campaign already ran. And now we're reaching out to these people to say, "Hey, did you see it? What did you remember from that campaign? Did it change your behaviors?" That's more on a broader scale. We might want to bring in a group of our customers, people that are using our products and services, to really get more in-tune with what behaviors they changed, why did they change their behaviors, maybe it's in prep for creating that next marketing campaign. So it's like, okay, we ran a campaign, we're going to run a new campaign, let's see if we can bring in a focus group. Those are typically six to eight people, maybe 10 people that you're bringing into a room. And you're asking them what they like, what they don't like, because you want to make sure before you broadcast those advertising campaigns, that it's hitting home with the people that you want it to, and you have time to tweak things beforehand. So really it allows you to get very nitty-gritty, with a smaller group of people. Maybe you want to reach out, you want to do three focus groups with mothers who are responsible for preparing their kids' lunches. And you want to know the whats and the whys and how they do that. And so those are more intimate, smaller scale discussions that you can have to really get down, having good conversation. Those are typically not scripted, those are typically just conversations, interviews, very open,v ery different than research where you're looking to be able to gather qualitative, quantitative information and use it for comparison purposes. So typically, focus groups are more open-ended. It's not scripted, it's discussion. So those can be very different than trying to gather research surveys, survey data from a group of people where you can say, "Okay, this demographic thinks and feels this way versus this one." So, yeah.
Kathy (host):
Thank you so much for clarifying this, because now it's crystal clear in my head. We talked about that you use phones, you prefer phones it seems, versus email. And I could see why, because when you're on the phone with someone, you can still probe, you have a question, but then you can probe more. And then there's immediate feedback. But do you see a difference in quality of the responses that you get when you have someone on the phone versus on the email?
Darlene (guest):
So that is another great question. And typically, what happens is, if we're only using an email survey, we have to wait for the respondent to answer. So let's say we send out a bunch of emails, now we have to wait, those people may or may not respond. So let's say we're trying to get a quota, let's say that we want to be able to get 200 completed customer surveys, and we send out an email, and we only get 25 people to respond. Okay, so we can send out another batch. And now we have to wait for more people to respond. And we can send out another batch. Being able to utilize the phone really allows us to manage the number of responses we're getting because we are proactively reaching out to these folks. And, again, we don't necessarily get that with the emails - with the emails, we have to wait. It's reactive in nature. So we may not ever get the number that we need.
Kathy (host):
And what are you waiting for when you're sending - when you said "batching"? Is it a case of that, let's say for example, that I am one of the emails that you send to me, and you send me a couple of questions. Are you waiting for me to respond to those questions so that you can ask more probing questions back? Or is it just I send you the answers, and that's the end of it?
Darlene (guest):
Yeah. So basically, the email contains a link to a secure survey, so that you would actually go in and answer all of the questions and send it back as a completed survey. So again, when we're utilizing the phone, we have the ability to manage who we're reaching out to, when we're reaching out to them, making sure that we can get all of the questions answered. Versus an email, we have to wait for the people to respond. If they respond, they may not answer all the questions, or the responses may not be very clear or very thorough, they might skip questions. So that really kind of waters down the quality of the results that we get. But what also tends to happen is that when you are sending out an email survey, the people that are responding are either those people that are really, really happy with you, or really, really unhappy with you. So it's not necessarily a good gauge of overall satisfaction for your business. I had this happen a couple of years ago with a company that was struggling, and, you know, they knew they had some challenges, but they made the commitment to focus on customer experience, and they had to start somewhere. So you know, very proud of them from that standpoint. And we called and we sent out emails, and it was really hard to get people to respond. And the people that were responding, were those people that were not happy, not at all happy. And what was interesting was that the challenges with the company were that the company wasn't doing a great job of following up on service requests and issues and problems. So the customers were basically saying, "Hey, you already know what my issues are, you know what my problems are? Why do I have to do another survey? Like you're not even responding to me to begin with, now you want me to do a survey and tell you yet again, what my problems and issues are." And those people that did respond, it was all very, very negative, because they weren't getting that support. So again, you could have the opinion that "Oh my gosh, my company is horrible. Nobody likes me, it's all bad." No, that's not necessarily the case. So that's why it is important to really use a proactive approach as well, so we're layering them so that we can get feedback from everybody, not just waiting for those people that may be unhappy to be the only ones that are responding. So it's just a good best practice.
Kathy (host):
And how is it these days, because if I get an unknown number calling me on my phone, there's probably a chance that I'm not going to pick up the phone. Is this a challenge in your line of work these days?
Darlene (guest):
You know, part of our process, when we have our clients send out a communication to the customers - their customers - that's the opportunity to just say, "Hey, we have engaged with Direct Opinions, they're going to be reaching out to you over the course of the next couple of weeks by phone, by email, here's the number they'll be calling from, here's the email it'll be calling from. Be on the lookout for it." So again, that helps set us up for success, especially on the B2B side, because there's relationships there. If you're engaging with organizations, they want you to be successful, they want to be able to provide feedback - good, and you know, not necessarily good, but opportunities for improvement and for growth. So typically, people really do want to respond, they want you to succeed, especially if there are issues and challenges they want you to be able to work on. So there are times if we're challenged a little bit with reaching folks, we may go back to our client and say, "Hey, can you nudge a few of these folks that haven't responded yet?" And they will. And it's always impressive when the president of the company reaches out and says, "Hey, we haven't heard from you yet. And we would really love to get your feedback to help us provide an amazing experience for you and continue to provide that." So sometimes we have to do that as well. And that helps the process.
Kathy (host):
I like that reframing of a company reaching out and reminding that, "Hey, it's not about us. It's about you, like we want to better serve you, how can we do that? Help us help you essentially."
Darlene (guest):
It's exactly right. Yes.
Kathy (host):
So we talked a lot about the tactical how-to, and what are the channels to do it. But I always like to bring this into like the "realness" level, as I call it. Do you have any examples where the company that you were working with was able to significantly improve their operations or their finances or whatever it might be, based on the insights that they got by doing the work with you?
Darlene (guest):
That's a great question. So I have, obviously, lots of examples that I could share. But let me try to pick out a couple here. There's one most recently that we completed not long ago for an organization. I actually was working with a sales consultant that brought me in, and he was working with this particular team and working on sales strategies, sales skill assessment and such, and said, "Hey, have you ever gone out to your customers to gather feedback?" And having the salespeople sitting around the room, he was asking them, "What are your value propositions? Like what are you out there selling?" So each salesperson had a different answer. And he said, "Okay, well what do your customers think?" And they had never gone out to gather customer feedback at all. So that's why they brought us in. And we went out. And this was for a manufacturing organization, we surveyed 100 of their customers. I was able, they provide data on the front end. So I was able to know what the annual sales were by account over the course of the last three years, which really helped me identify which companies were buying less and less from that organization. In addition, they were able to tell us who their top-tier customers, mid-tier customers, etc. were, products and services, and such. So we went forward with this particular client. And what we found out right off the bat was that their second largest customer, valued at over $800,000 in annual sales to the company, was leaving them and they had no idea. So the salesperson kept telling them, "Yes, they're not buying as much. But that's because they don't need our products and services as much anymore." And that was actually not the case. So when we engaged with the client, what the client told us was "I love them, but it's taking longer and longer lead times to get a quote, and to get equipment in here. And oh, by the way, shipping costs, they've jacked them up through the roof. And so little by little they are forcing me - they have forced me to go to their competition." And they finally got to the point where they said, "We're done." But that's not the story the salesperson was telling them. So we ended up presenting our results on a Friday afternoon. And on Monday morning, they were calling that account and saving that relationship. And what also came out of that particular survey was that of those, 96% of them said they were very satisfied or somewhat satisfied. So overall satisfied, that's probably where a lot of other companies would have stopped, because they would have said, "Okay, you've got, you know, 96% of them are satisfied." But then we're looking at it deeper. And again, I'm looking at the revenue, the sales side of it. And I said, "Okay, of those 96%, 70% are your top tier customers that have bought less over the last year. So while they're satisfied, that's great, but at the end of the day, they're buying less, there is a problem there." And so that example that I just gave you was a great example of what was happening with their top-tier customers. They weren't getting things quick enough, the lead times were not good, and costs were getting jacked up. So again, they were able to just focus on that for their top-tier customers. But what was also interesting is that their bottom tier customers, their three and four-tier customers, were thrilled with them, and wanted to buy more, but couldn't get a salesperson ever out to meet with them. And the salespeople were like, "Oh, they don't really buy that much from us, I'm not going to spend my time on those accounts." And these were people that were like, "We would love to buy more from you." And they can't get anybody out to meet with them. So fixing these scenarios certainly allowed them to improve their sales. And what was also interesting with this company is that they work with manufacturing facilities. And when their line, when a manufacturing line is down, they're the company that you bring in to fix the line. They had no idea they were perceived in the market as the company to go to in an emergency. So the reason for that is their ability to provide amazing technical support - skilled team members, their availability 24/7, even down to how clean they leave the workspace. And the customers were saying, "You know, we gladly pay them a premium because they do such an amazing job in an emergency situation." But they had no idea they were viewed that way. So now that's a whole different marketing campaign, that's a whole different sales strategy. And oh, by the way, if these folks trust you in an emergency, then you should be working with them every day to maintain your system so you don't have an emergency. And so it just again, this goes back to what I said in the beginning. This is not just about checking a box for customer experience or customer satisfaction. This is gathering data that drives strategy that you can use across your company - sales, marketing, operational improvement, finance, revenue, profit. And that's just a really good example of a project we did that just hit on so many of those factors.
Kathy (host):
It did. And, you know, I've got to ask, because as you were talking about this, I kept thinking about the salesperson not knowing what was truly happening with this customer. Is it because the customer didn't feel comfortable sharing, or did the salesperson just kind of keep on selling without really probing too much?
Darlene (guest):
I think the salesperson kept selling without probing. And I think from the customer's perspective, he was like, "Hey, they know this," then that was the point - little by little he was having to go buy from the competitors, because although he expressed concerns, those concerns weren't being met. And you know, at the end of the day, you can't have a line down for a couple of weeks, two or three weeks, you know, you need to get those things fixed. And so, you know, that was just a really, really great example. We also just did another project, which was fascinating. Going into this year, the sales strategy for this organization was to find new customers, because "Our current customers are not going to buy our products." And these were half a million dollar machines. So they're not machines that you're out there buying one a quarter, and it was a smaller customer base. And we ended up, when we presented the results, 30% of their current customers actually said that they were planning on making investments in that technology this year. And so the client had no idea. But what was also fascinating is they asked us to reach out to companies that they sent proposals and quotes to over the last year or so but didn't buy. So the company made the assumption that they didn't buy from us, so they bought from somebody else. Well, when we surveyed that group of folks, 48% of them said, "No, we didn't buy at all, we're buying this year." So it completely transitioned their sales strategy from "Go get all brand new" to "Everything is already in your sales funnel that you need to make your year." They don't need to sell but a handful of those pieces of equipment, and they'll have made their numbers for the year. So it was a complete switch on what the strategy was coming into this year.
Kathy (host):
That's interesting. So who brings you into these conversations? Is it the CEO that understands the value of this? Is it marketing? Is it finance? Because as we're having this conversation, like I could see if finance is truly strategic, and they're doing the financial plan for the next couple of years, they want to know where to put their money, how we're going to do our sales, how we're going to do our marketing. I think that would be a part of it too. At least you know, I would be, but who really is that person that says "Hey, we've got to do stuff like this?" Who is the person that brings you in? I'm really curious about that.
Darlene (guest):
It could be an owner, president, CEO level, it can be a marketing person, it can be an ops, C-level person as well. Finance is not always the people that bring us in. But I agree with you, I think a lot of the work that we do helps support opportunity for growth from a financial standpoint. And that's for many reasons as well.
Darlene (guest):
One of the things that we always look at and inquire about is what are the customer's expectations versus their experiences? So you can have a company that may be investing in technology and solutions and such. But at the end of the day, if that's not having a big impact on the customer and their experience, and what's really important to them, you could be wasting that money versus figuring out what truly is important to your customers, figuring out where your gaps are and putting effort into closing those gaps. And that way, you're going to get a bigger bang for your buck. And we also just completed a survey in the fourth quarter of last year for an organization talking about the finance piece of it. They were looking to do an across-the-board price increase and they were very hesitant about making that change, making that announcement. So we went out, we did a customer survey, they had several thousand - about three-ish thousand customers. We did a survey, a statistically valid number, and their customers absolutely loved them - the service, the support, the quality of their products and services. And we asked several questions about pricing, you know, "How is this company compared to their competitors pricewise? Are they the same? Are they less? Are they more? What value are you getting? Are you getting value for the money? How was your service and support?" You know, we actually had customers that came back to us and said, "They're not charging me enough for the value that they add to my organization." So in the end, when we reviewed the results with them, you know, they had the confidence then to go ahead with an across-the-board price increase for all of their customers, because they knew the value that they were providing. They knew the strength of those relationships. They knew how they were comparing in the market, to their competitors based on price and value in service. So they had everything that they needed to make a good, solid, strategic decision based on the data that they could have confidence in. So yeah, that's a great example.
Kathy (host):
Yeah, I love that. So that you actually have that comfort level of, "Hey, if we increase our price, we're not going to lose 20% of our customers." Exactly. Yeah, that's really good. You know, we've talked about using customer research and feedback when you're growing the company, when you're operating, and you're trying to do things better. But how about when you are selling the company? Because there's value in there too. And we've talked about this privately. And I want to make sure that we record this because as you were talking about the value of doing this when you're selling the company, I thought to myself, "Yeah, of course, it makes sense." But I never really thought of it that way. So can we touch upon that?
Darlene (guest):
Absolutely. So we do work with private equity organizations. And typically, they will bring us in in the due diligence process. So when they are looking to make an acquisition, they will introduce us as their partner. And basically, the process I just described earlier in our conversation is what we run through with them.
Darlene (guest):
So it's the same process - we're going to reach out to customers, we're going to put a survey together, you're going to provide us a contact list, we're going to gather surveys. And the goal is to make sure of the strength and the quality of those relationships with their customers.
Darlene (guest):
From the private equity side, if they have any issues or concerns, that's our opportunity to sort of flush those things out, to be able to say, "Hey, we have a little concern about this, okay, we'll ask them questions about that, and we'll get you the answers that you need." So it's very, very helpful in the private equity space, to be able to say, "Hey, what's typically done is they will reach out to a handful of the top customers, and they'll say, 'Okay, they're good, so we're good.'" But where companies could be missing the boat is the fact that this can really become that strategy, that roadmap that when they make that acquisition, they can use it then as that roadmap for growth.
Darlene (guest):
So that's part of what we see. But that's on the due diligence side. If you are considering selling your company in the course of the next couple of years, I highly, highly recommend that you are getting ahead of it and proactively reaching out to your customers before you would have a private equity, venture capitalist, somebody coming in and doing that on your behalf.
Darlene (guest):
And again, that provides a couple of opportunities. Number one, if there are issues and opportunities out there for improvement, that is the time to find that out. Not when you're sitting across the table from a private equity partner who's looking to buy you. That's not when you want to uncover issues or problems.
Darlene (guest):
So being able to have time to identify what those opportunities are, and have time to put plans in place to fix those things and better position yourself in the market is ideal. On the flip side, you can also identify those things that are truly unique - what are your differentiators? What sets you apart, what makes you special? Because those are going to be things that can add value to your price and your deal when you're going to sell. So being able to come in and say "Hey, we've done customer surveys for the last couple of years. These are our scores, these are our ratings. We've got strong relationships year after year, they're investing in us and they're buying more, and here's the value they get. And here's how we're different from our competitors." You put that out on the table, that's going to allow you to get a much greater multiple and value for your organization. I can tell you I've been on a few calls where the seller was surprised that this was going to happen, and that is not when you want to be surprised, because they don't have any idea what their customers are going to say. And that's not good.
Kathy (host):
Yeah, that's not good. Darlene, I can talk to you for hours about this. And I am just fascinated with your stories and so much knowledge that you have about this. But unfortunately, we have to end this episode.
Kathy (host):
I do have a question that I always ask every single client, and that is, if someone is to try to do customer feedback, customer research for their own company, and they're probably like me when I was doing this about a year ago - it's like completely overwhelmed, but they have no idea what to even do - what is the next one actionable thing that they can do in the next couple of weeks to get them closer to getting the customer feedback that they can use in their business?
Darlene (guest):
I would suggest getting together a team of key decision-makers, and stakeholders within their business to agree on what do we want to learn. Who do we want to reach out to? What decisions is this information going to drive? And all be in agreement on what those things are - how do we go about gathering that insight?
Darlene (guest):
What tends to happen is that, you know, sometimes when a company's on their own doing it, they may ask questions, and they get a survey back and it's like, "Oh my gosh, we didn't really learn anything here. Or we forgot to ask this, or how are we going to use this?" Or we call it the "kitchen sink survey" where every department wants to ask 15 or 20 questions. And before you know it, you've got 80 questions.
Darlene (guest):
And it's really being very focused in your approach - who do we want to reach? What do we want to learn? How are we going to use this information to really drive a good, crisp process that will allow you to get solid, effective results that you can use and apply to improve and grow your business?
Kathy (host):
Awesome. Thank you so much, Darlene. Where can people find you?
Darlene (guest):
Darlene C-A-M-P-A-G-N-A at directopinions.com. That's my email. And 216-410-6740 is my cell phone number. So please feel free to reach out.
Kathy (host):
And we're going to put all of that in the show notes as well. So if you missed it, you can go take a look at it there. Thanks so much, Darlene.
Darlene (guest):
Kathy, thank you so much for the opportunity. Bye bye.