Featured Article – 2012 October

Tip Sheet

  • Keep surveys short, simple and focused.
  • Make your sample size large enough to obtain accuracy to within plus or minus 5 percent.
  • Use a 1 to 5 scale for easy scoring.
  • Start with general questions, then move to specifics.
  • Include a couple of open-ended questions.
  • Review responses carefully.
  • Act on the results.

Successful surveys: short and sweet

By Kevin Beane

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.”

What do you want to find out?

Start with a general satisfaction question: “Overall, how satisfied are you with XYZ Widgets?” By placing this question first, the response is less likely to be affected by opinions related to topics you ask about later.

Then get into specifics — the strength and flexibility of the widgets, the clarity of the instruction manual, the ease of placing new orders, and so on. Also, ask customers how likely they are to make a repeat purchase, and how likely they are to recommend your product to others.

After you have developed these questions, insert two or three questions that call for open-ended responses at the appropriate places in the survey. For example, ask for the reasons for the overall satisfaction rating and for why the customer would recommend your business.

Finally, ask demographic questions to help sort your responses. If you are surveying individuals, ask age range, income range, family status, etc.; if you are surveying businesses, ask about the size of the company, the type of industry, or any other characteristic that could be a relevant variable. While making your survey confidential will ensure accurate responses, ask respondents if they are willing to be contacted to discuss their answers, and to provide a phone number or email address.

Making sense of the numbers

Whether your surveys are of the relationship or transactional variety, what is important is that you conduct and grade them regularly. Your first survey, then, will provide a baseline for future surveys.

You will, of course, tally the percentage of responses for each of the five points on your grading scale. As you do, pay close attention to two measurements: the total percentage of your “top two” scores (a 4 or a 5) and for the differential between “top two” and “bottom two” (a 1 or a 2) scores. If your business is doing well, these numbers should improve with each survey cycle.

Next, review responses to open-ended questions. Respondents who gave you a score of 4 or 5 will tell you what you are doing well, but any concerns they voice could be a warning that some areas of your operation need more attention. Dissatisfied customers are likely to offer specific reasons for their unhappiness, and a careful reading of their comments should give you a good sense of how to improve.

If you can follow up with dissatisfied customers (that’s why you asked for contact information), you may learn more about how to improve their perception of your business, not to mention reducing the chance that they will say negative things about you to others. Thank them for their comments, offer a discounted or free product as a token of your appreciation, and, most importantly, let them know if their comments result in a change of your products or services.

Regular surveys help you take the pulse of your customers, and they show your customers that you do care about what they think. Using surveys well will help you keep more of those customers — and you would much rather keep them than go prospecting for new ones.