In this article, the author explores best practices for finding out how your customers really feel about your products and services, giving you better information on which to base pricing decisions. Per Sjöfors is the Founder and CEO of Atenga, a global pricing and customer intelligence consulting firm. Prior to Atenga, Per had more than 25 years of executive management experience, and has founded and built a number of successful, and very profitable, sales and marketing companies in Europe and in the US. Per also co-founded the industry association G-SAM, and has published a number of articles in industry press. He is a sought-after speaker at conferences. He can be reached at per@atenga.com.

The Pricing Advisor, June 2016

How to find out what your customers really think about you

Most companies base their product and service changes off opinions and reviews captured from those who think their products is “good” and those who “hate it” for lack better phrases.

Logically this makes sense.

However, the problem with this is that customers who actually love everything about your product only make up a small fraction of your entire customer base. These are the people that are quick to leave you useful in-depth honest reviews.

Then you have the people who say it’s awful. These are the negative reviews, and every company has at least a few. Typically, the percentage is low or you would not have much of a business. Many of these reviews are used to change the company structure, i.e. pricing, product development, marketing, customer service and so on.

It goes without saying, but the problem with this approach is that is the amount of input is too small. On top of this, unfortunately, many customers know bad reviews often equal freebies and discounts. They jump on any mistake you make, and leverage their ‘bad’ review for their benefit. Which makes this category even harder to base changes off of, but misguided companies still do.

The satisfied and dissatisfied customers can be broken down into four groups (see Figure 1).

Great: The customers who leave in-depth reviews of why they love it.

Good: The short answers “Great product” “love it” “very helpful”.

Okay: Tend to not say anything at all – or give short answers.

Awful: The unfortunate negative reviews.

Satisfied customers tell the truth, but not the whole truth. When customers are broken down into these four categories, the percentages between really good and really bad drastically change. The 95% of reviews with “useful insight” then becomes 15%, leaving you with 80% of bland insight that has no use in distinguishing your customers’ values, perceptions, and drivers.

These percentages don’t represent every business, but most companies have similar stats when they crunch the numbers. This shows you that companies can NOT rely on and base changes on data they collect themselves from customers. When asked “do you like my product” customers often lie for a variety of reasons. One of the biggest reasons is because it is generally conceived as rude to tell someone, “Hey, I don’t like your product.” So instead they say very little or nothing at all.

There are many other factors that come into play for why customers “lie.” For instance, if you have a sales team and your customer loved the person they worked with because they both were car fanatics and shared stories and laughter with one another after the sales call. Chances are, when handed a review, they will base answers more favorably, even to questions unrelated to “customer service.” That 3 Star rating they were going to give for “product quality” then becomes a 4 Star rating.

How do you fix it?

The answer is found through anonymous interviews and surveys. By conducting research anonymously, you gain this “truthful” insight into these customers’ values, perceptions, and drivers. That is, of course, if you ask the “right” questions.

Customers rarely lie on surveys that are anonymous. It evokes a sense of “safety” which encourages them to open up and answer honestly. For example, the Catholic Church performs “confessions” where member confess all of the things they did wrong. The priest sits next to the member, but in between them is wall. That same wall is needed between you and your customer if you want honest answers.

Now, you can certainly conduct this yourself, but almost always the ones who participate are again the 15% who rave about your product or service and the 5% who had a bad experience. Most companies do this, not realizing it represents roughly 20% of their customers.

By administering anonymous surveys, with carefully crafted questions that don’t infer or identify who you are, you are able to find out “who” the 80% of your customers really are (that you haven’t heard from or not enough from), what they like, what drives them to buy your product or that of your competitors, and what they are willing to pay.

Constructing an “anonymous” research project can be a difficult task for any business, but this is a science many pricing consultants specialize in. In my case, our research specifically focuses on finding the “best price” for your product or service, but it goes much beyond that. The information gathered gives companies insight into their “entire” market, not just their current customers. We then break it into customer segments based on all of these values, so that you can price right for each segment and or change what market segment you focus on.

This all can be used to make important changes in pricing, product development, sales, marketing and messaging, and positioning.