Based on our over 25 years of experience conduction customer satisfaction surveys, we’ve identified these three questions as the most crucial ones for companies to ask about their customers.

  • Performance:  How well are they performing compared to customer expectations? 
  • Importance:  What attributes are most important to their customers? 
  • Competition:  What is their competitive position in the marketplace? 

They are the questions that come up again and again – and the answers consistently provide clear strategic direction.   I’d like to review what those three key questions are all about, and then discuss the importance of how they all relate to each other.

Critical Question #1: PERFORMANCE

The below graphic details some of typical performance attributes we measured through Customer Insight for one of our clients:

Customer Satisfaction Attributes

As you can see, there were thirty-odd performance attributes that our client felt were important to look at in this particular case.  This list was generated from conversations we had with the sales force, customer service reps and quality improvement teams, reviewing call reports and warranty claims, and other sources.   How these attributes are worded and described will vary, depending on what industry the business operates in and the nature of their business.   It’s important, therefore, to work within the specific attributes of each industry, as well as using the specifications that are unique to each company’s products and services, to give the best and clearest possible perspective on them.  In other words, we always want to “talk the language” of whatever business we work with so that everyone is on the same page and misunderstandings are rare.  

Once we’ve identified the key performance attributes that are worth measuring, we find out how their customers rate them on each individual attribute, as in the diagram below: 

Obviously, how the customer “grades” the supplier on these individual attributes is imperative to look at.  The surprising fact is, however, these ratings are almost meaningless to the supplier in question – until the second Customer Insight critical question is answered… 

Critical Question #2: IMPORTANCE

Measuring performance attributes without measuring the individual importance of each of those attributes can result in some very misguided moves.   Unfortunately, a lot of companies stop at simply understanding how well they’re performing in the customers’ eyes; we’ve found this is woefully insufficient.   It prompts a company to overreact to areas of strength as well as weakness.   If a customer praises a performance attribute, the supplier thinks it needs to keep promoting its capability in that area.  If a customer complains about another attribute, the supplier thinks every expense and effort must be put into fixing that negative situation immediately. 

It all comes down to this…if you don’t know how important a performance attribute is to your customers, you have no idea what’s worth reacting to and what’s not.   In other words, you’re setting policy in the dark.  Even more importantly, you might be simply continuing to do certain things in certain ways, even though they may be costlier or time-consuming, simply because it’s how you’ve always done those things and you think it’s what your customer expects.     

For example, a supplier may be monitoring their manufacturing processes for a product based on the customer’s specs, without ever knowing whether each individual specification is actually important to the performance of the product.   I’m frequently amazed to discover just how often a spec is asked for that has nothing to do with actual product performance – and that the customer would easily give up if questioned about it.

It brings to mind the old story about the mother preparing a roast for the oven – she cuts off both ends of the roast before she puts it in the roasting pan.  Her young daughter asks her why she always does that – the mother replies, “I don’t know, that’s how your grandmother always did it.”  The girl then goes to her grandmother and asks the same question – why did she cut the ends off the roast before she cooked it?  The grandmother says she doesn’t know either…that’s the way her mother did it.

Finally, the girl tracks down her ancient great-grandmother to try and get the real answer: “Why did you cut the ends of the roast before you put it in the oven?”   The great grandma smiles and answers, “I only had a small pan.  It’s the only way I could fit the roast in it.”

When you have thirty-odd (or, in some cases, even more) performance attributes involved with your customer relationships, you need a basis to prioritize them.  You obviously can’t put the same level of effort into all of them and you don’t need to.   Some require more and some require a lot less – because the degree of importance to the customer can vary from absolutely critical, to table stake criteria, to a non-factor.  Without measuring that degree of importance, you could be aggressively promoting an attribute that frankly means nothing to your buyer!   True customer satisfaction comes from fulfilling their most important needs as completely as possible – and allocating resources to those performance attributes most critical to them.   

For example, another one of our clients delivers supplies for use by inmates of correctional facilities.   When they were in the early years of their business, they routinely heard that these facilities needed to always have these kinds of supplies on hand – they simply couldn’t afford to run out of them.   The Company’s founder decided then and there that he would make one of his main selling points the fact that his company would ship an order out the same day if it was called in by a certain time.  This seemed like an obvious solution to a customer problem and, from the very start, the client made every effort to be customer driven.

The reality, however, was that, because of security and bureaucracy issues, the shipments spent a great deal of time being checked in and inventoried when they were delivered to a facility.  That meant it might take up to a week before the supplies made their way to any of the inmates.   Same day delivery was just not important to these facilities; it was all about refilling their inventory to avoid problems down the line resulting from a needed product being out of stock.  Yet, this extra emphasis on quick-shipping was costing Bob Barker a lot of extra time, effort and money.

After our Customer Insight survey revealed otherwise, they were able to selectively offer next-day service without causing any disruptions for their customers.   Of course, this same Customer Insight survey also showed that these customers ranked the client very high on speed of delivery – but that performance attribute ended up ranking very low in importance.  Without complete and correct information, management’s desire to respond to the “voice of the customer” can result in added procedures and unnecessary expenditures.

Here’s a typical chart showing our measurements of how important each attribute is to a supplier’s circle of customers:

It’s interesting to compare this chart with the performance rating chart featured earlier in this chapter, but let me point out one thing in particular.  One of the highest-rated performance attributes in that earlier chart was “water repellency.”  All of the customers thought that the supplier did an excellent job delivering a product with this performance attribute.

Good news for the supplier, right?   If that’s all the company had to work with, it would be wildly enthusiastic over those sky-high marks and sell that performance attribute as hard as possible.     However, if they have access to the derived importance chart above as well, that enthusiasm would soon be dampened in spite of the high water repellency.  That’s because that particular attribute is actually ranked the lowest in importance by their customers.

There is a subtle distinction that may be made here. Just because an attribute is evaluated as being low in importance does not necessarily mean it is of no importance to the customer. Often, it suggests that the attribute has become an expected element of the overall product and service mix – a table stake if you will.  Differentiating between a table stake and an unimportant attribute requires a broader understanding of the business environment and the supplier-customer relationship that comes through qualitative questions in the survey and further analysis.

In this case, with both charts in hand, some serious soul-searching at this company may be in order.  If water repellency actually costs them significant production costs to add to the product, why bother to continue trying to improve that performance attribute?   If the customer doesn’t care about this feature as much as other attributes, or if it has become a table stake – why should the manufacturer give more of it?    Redirecting resources to other attributes would allow them to improve the value that customers receive and result in a stronger and more defensible competitive position.

As important as the two critical questions of performance and importance are, there is still one more question that needs to be answered to really put everything in the proper perspective for complete customer insight.  Once we add competitive position to the survey question, we can gain a full strategic way of thinking about any company’s future direction.

Critical Question #3: COMPETITIVE POSITION

Assessing competitive position is one area where B2B can be strikingly similar to B2C.   Our consumer, buying toothpaste in the aisle at the grocery store, will be assessing relative worth of each product and making trade-offs as he chooses between the various competitive offerings.  For example, does he want whitening or does he want a “fresh breath” mouthwash component?  Does he want a stand-up dispenser or the traditional tube?  The name brand or the cheaper store brand?

The B2B customer does essentially the same thing on an ongoing basis. That B2B customer does differ in some respects from an individual consumer – as shown in the table in the Introduction. For example, she may be part of a buying group and she probably knows significantly more about the product than an end user – maybe even as much as the producer. The B2B customer uses this information in a systematic and logical way to make a purchase decision and determine the share of their total spend that will go to a given supplier. But, even if a supplier is currently the sole source for a product they’re buying, they grew to that position by demonstrating a competitive advantage over similar suppliers.  If I’m that supplier and want to continue to be that sole source, I need to make sure I maintain that competitive advantage – because my customer is constantly going to be asking, “Am I getting the most I can from my supplier?”   

Obviously, competitive position, then, certainly belongs as one of the three critical questions we must answer about any supplier’s relationship with its customers.   But not everybody agrees – an executive familiar with our methodology once joined a company that used an internationally-respected research firm to do their Customer Insight research.   He was shocked to learn that they did not measure competitive position at all.  Which, ironically, gave us a better competitive position in the eyes of that client – enabling us to up replace the better known research firm.

When we measure competitive position, we measure how key performance attributes fare against the competition.  You can see from the chart above how we typically map this out – the supplier can very clearly see at a glance where it’s falling behind other competing companies (attributes in red) and where it outshines them (attributes in blue). 

Still, this leaves out the other critical question of importance.  If we return to the water repellency example, you can see from the chart that our supplier scores ahead of the competition in this attribute.  But again, the customer doesn’t care that much about it – so it doesn’t matter as much that the supplier excels in this area. 

The truth is the measurements from all three critical questions must be taken into account to create a final visual tool that can show where a company must excel – and other areas that are table stakes or have a lower priority for improvement.