successful CUSTOMER RELATIONSHIP MANAGEMENT

This week starts by considering how data, and the information that results from data, are an extension of “listening to customers”. It distinguishes between secondary and primary data, and then between qualitative and quantitative research methods, exploring some of the techniques that can be used to collect data. 

In a conversation you speak and you listen. In market research you listen. Despite some stereotypes, the best salespeople and the most customer-oriented managers make time and effort to listen. 

Amid the urgency and noise of work, many managers lose sight of the all-important requirement to observe and listen to their customers. 

The example below relates a conversation between two guests at a hotel. The hotel manager could have learned a lot if he had been listening to what the guests were saying:

Bob is rejoining Gill in the garden of a hotel at lunchtime. 
Gill: Have you ordered our food? 
Bob: Yes, but if you want to eat in the garden they only serve sandwiches. We need to listen for them to call ‘Table 15’. 
Gill: That’s a shame. I wanted a cooked meal. Why do they only serve sandwiches? 
Bob: They started to explain but it all seemed very complicated. Anyway, I’ve ordered two steak and onion baguettes with salad — they were very reasonable. 
Gill: Drinks were cheap too, for a hotel. 
Bob: Yes, I thought they might have increased their prices since they smartened the place up. 
Gill: Mind you, they’ve still got a lot to do in this garden — look at all those weeds in that bed. And this garden furniture doesn’t match the style of the new conservatory at all. 
Bob: I think I heard her call Table 15 — at least they’re quick! 
Gill: Might mean they’re not freshly made. 
(After the sandwiches have been brought to the table) 
Gill: Well, she seemed to be in a really bad mood! 
Bob: Yes, good thing she brought us the right sandwiches — I didn’t even dare ask for the mustard! 
Gill: Hey, that’s not fair: you’ve got loads of onions and I’ve got almost none. 
Bob: You can have some of mine — but eat up, it’s scarcely warm. 
Gill: Oh no! Those young men heading for the next table look as though they’ve had far too much already. 
Bob: I thought the hotel was trying to lose that sort of clientele now. 
Gill: The language! I'm glad your mother decided not to join us for lunch after all. 
Bob: Shall we finish up and go now? 

In the life of a hotel, one conversation recording the experiences and perceptions of just two customers is not significant. None the less, this one is full of data which could be of interest to the manager, especially if complemented by data about the experiences and perceptions of other customers. 

A long list from a short conversation? Decisions about pricing policy, staff training, portion control procedures, ordering procedures, decor, the resources devoted to gardening and the promotion of the hotel to targeted population segments could flow from this conversation. Such decisions could have a significant impact on the value that customers would attach to their experience of the hotel. 

However, the manager would need more data from more customers (and perhaps past or potential customers) to see if the resulting information presented a coherent and convincing case for any particular decisions. Information from other hotels could also be useful, such as the prices similar hotels charge. 

This example shows some of the key elements of market research: 

• the gathering of data which in many cases is an extension of the listening process 
• the conversion of that data into a form which conveys useful information 
• the use of that information to take action. 

Usually market research will be done to find out specific information to help with particular decisions. To do this it is important to establish what questions need to be asked, of whom, and how they should be phrased. 

Strictly speaking, research into the markets for products and services is known as ‘market research’ and research into marketing practices such as advertising is known as ‘marketing research’, but the terms are often used interchangeably. We will use the term ‘market research’ to cover both aspects. 

Data, information and decisions 

Data is defined simply as raw, undigested facts. An example of data is the number of people using different brands of toothpaste. Information, on the other hand, is data that has been made sense of, generally by combining and comparing it with other data: for example, that peppermint is the most popular flavour of toothpaste sold to adults between the ages of 20 and 40. 

Decisions may follow. For example, a company may decide to launch a new brand of toothpaste taking account of information about population segments, customers’ preferences, competitors' products and much else besides. 

Market research can be considered as an information management process or system, which Dibb et al. (1997) describe in three stages: 

1. the gathering of inputs (data) from internal and external information sources 
2. the processing of the data into information: classifying, storing, indexing and retrieving it (this can be informal as well as formal) 
3. the output of informed decision making.  

Across sectors, market research can lead to decisions that better reflect the customers’ needs, behaviours and desires. For example, “What should our advertisement be saying?” is better expressed by the questions: “What needs do customers have which our service meets, and how do we tell them about our ability to meet their needs?” 

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