Back to the customer! Why too much knowledge of an industry can endanger success

What is especially important for my customers? Any company executive can give two or three answers straight away to this question – especially in the precast component industry. Why these quick answers could even be dangerous for the company’s own future and how to deal with this danger will be discussed in greater detail in this article.

Heino Hilbig, Mayflower Concepts, Germany

Last year that time had come again – one of our consultancy customers had to construct an extension because they were too successful. A high rack area of 20,000 square meters had to be made into 40,000. It did not really come as a surprise. Our customer had already planned this extension when the original building was erected. A hall of identical appearance would be joined seamlessly to the original structure. This contract should have been a foregone conclusion for the builder who carried out the first work. This building contractor was a leader in that industry and certainly had had enough experience. The builder knew the customer from their first collaboration. The builder knew the terrain and already had a ready-made construction plan in his pocket. And the company’s managers were able to count off what was important for the customer quickly on one hand.

Perhaps too quickly. In the end, the contract for the expansion work went to a competitor.

I can well imagine how the internal discussion at the construction company progressed about the loss of an order thought to be secure. “It was presumably simply down to the price – we just couldn’t compete,” was the sales manager’s analysis. “We are working to capacity anyway – the deadlines might possibly have been far too tight,” the production manager in turn remarked. “It’s not our fault” – these pseudo-explanations rob a company of the opportunity of learning from a contract loss. Unfortunately, it is a wide-spread reaction that can even destroy a company when things get really bad.

In fact, the reasons for awarding the contract to a competitor were to be found entirely elsewhere. The poor chemistry between construction company management and customer played a role in this as did the way they had reacted to construction defects with the first contract and – less we forget – reliability in meeting deadlines.
Any businessmen or managers who do not want to fall into the trap of missing the right point in time to act need an early warning system to help them recognize their customers’ needs at a nascent stage. Customer surveys carried out professionally are an alternative to relying on internal estimations. It is, however, wise to observe some rules which have proved their worth in other industries.

Only external customer surveys provide useful results

I repeatedly witness businessmen and managers who try to carry out customer surveys themselves by email or using sales representatives or else rely on the results of a simple star grading system (How do you rate our service?). But honestly, when was the last time you refused to give a waiter a tip and declined a meal because the price/service was not acceptable? The usual (and normal!) reaction is rather to affirmatively answer the question as to whether everything is all right and look for a different restaurant in the future. An honest answer, which might plausibly lead the restaurant to improvement, looks a lot different! Why then should your customers behave in any other way?

Good does not necessarily mean important!

Another mistake with many surveys is merely to ask for a customer’s assessment without taking into account how relevant that particular service is for the customer. Let’s continue for a while with the example of the restaurant. When you are waiting for your food in a star-rated restaurant, you find everything to be of great relevance. The food’s taste and appearance play as important a part as the service, table decoration and the ambiance of the restaurant itself. If, in this case, for example, the service is unacceptable, then the expensive star-rated restaurant has flunked altogether. The case is completely different from the small Italian place you found on a side street during your last holidays in Italy. The selection of wines was rather poor; the choice of dishes commonplace; the appearance of the table decorations was hardly worth mentioning. But none of it matters. The taste, the ambiance, and the friendly owner are substantially more relevant for you there and, for this reason, leave you with an overall positive outcome.

Pure “Like” surveys lead to false conclusions

If the owner of the small Italian place were now to carry out a customer survey, he would presumably receive disastrous reviews for his table decorations, his menu and wine selection. And presumably, he would come to the conclusion that he has to change everything to be able to improve. This would be a fatal false conclusion since in the end, he would have invested time and money in measures, which hardly have anything to do with his business’s success.
More recent customer survey tools such as “Channel Insights”, a correlation analysis, take this into account by using an online survey to draw the most complete picture possible of all contact points with a company. This is particularly important since customer satisfaction or dissatisfaction is not derived merely from price and product but rather from the numerous interactions a company has with its partners and customers. Product quality and price are scrutinized as are marketing measures, complaint processing, schedule planning, delivery punctuality and even personal contacts with the customer – i.e. all contact points imaginable until an overall picture of all the company’s measures have been created (see Fig.1).

Using these answers, the system then computes the relevance of each individual measure and illustrates these findings in clearly-structured charts (Figs. 1-3), from which a concrete plan of action can be immediately read off. In (the simulated) Fig. 2, for example, contact points have been polled in the area of schedule planning. The contact partner’s availability on the phone and personal skills were the most relevant points for customers. Improving them would on the whole advance the company the most. On the other hand, the online booking system received good reviews but is quite unimportant for the customers surveyed. In this case, it would probably be possible to save resources or dedicate them to other areas without risking a loss in customer relations quality.

How is customer loyalty defined if the product only sells on price?

Product comparability is a special problem in the field of precast concrete components. As indeed in all industries with identical or even standardized products, individual companies from the precast component sector tend to try to manufacture customer satisfaction just by using the price. A big problem with this is the typical question as to how to secure such a business is – viewed long-term – and how loyal the customer base might be if the price is the only differentiating factor. Customer survey tools like Channel Insights also provide practical support in such cases (Chart 3). With a few additional questions, a differentiation can be made between loyal customers and those willing to make a switch so that it is possible to find out what has made the former into faithful customers.

What stops businesses from surveying customers?

Despite all the advantages, it is again and again surprising how few companies, particularly in the business-to-business area, lay hold of the opportunity and employ external customer surveys in their strategy process.

One explanation could be that they think they know each customer personally due to their smaller number. This can be a fatal error as experience shows. A trading company realized after a survey that their customers in Germany prefer completely different ways of contact (visit, phone call, email) than their customers in other countries. This realization had a positive impact on turnover for our customers.

Another reason could be that companies associate the thought of customer surveys with a great deal of in-house organizational effort or the need for transferring customer data in a way that is compliant with the GDPR. Both misgivings are unfounded. At Channel Insights, for example, no customer data is released at all anymore. All customer data remains with the contracting party. The time and effort needed for the organization are basically restricted to one workshop day beforehand and the presentation of the results after the survey. It can in no way be reckoned as too much when dealing with customer satisfaction.

• Customer care should be counted among indispensable strategic tasks even for a B2B company with long-standing customer relations. Good knowledge about a company’s own customers is nowadays a key to success in many industries.
• Customer surveys should be carried out by experienced external service providers so that neutrality can be maintained and leading questions be avoided.
• Customer surveys should always take place in two dimensions i.e. the relevance of a measure for the customer should also always be determined or polled alongside a question concerning the assessment of a measure.
• Please make absolutely sure that you only survey customers in line with the GDPR. An order processing contract is necessary in this case. Or else you look for a service provider with whom you do not need to divulge any customer data.


Channel Insights
A customer survey created by United Consultancy with the special feature that “Relevance for the customer” is not polled but computed using correlations.
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