How Are We Doing?

In Best Practices, Risk Management, Sales & Marketing
September 23, 2019
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Developing a firm-wide obsession with customer feedback

By Gregg Schoppman, Principal, FMI Corporation

During the 1980’s, the Mayor of New York City was the famous and outspoken Ed Koch. One of the interesting remnants of his tenure was his affinity for asking his constituency the question, “How are we doing?” In today’s hyper-explosive political environment, asking this question to voters would be opening the floodgates of criticism and vitriol. However, this three-term mayor asked the citizens throughout the five boroughs this question to solicit feedback about the local government performance. It is safe to say, there was no shortage of opinions then either, but think about how often we are asked our opinions as voters, consumers, residents, etc. Now, how often is that feedback heard and acted upon?

The voice of the customer is one that often creates panic and fear in the hearts of many business owners. Businesses exist to serve the customer – without them, there is no business. In competitive markets and niches, customers have options and often vote with their feet, creating turmoil in pricing models and delivery options. Many firms steer well clear of asking customer the question of “How are we doing?” primarily because of the answer they will receive. No news is good news and ignorance is bliss. However, if you are not a firm that actively utilizes a feedback mechanism, realize there is a group that is asking the question “How are you doing?” Your competition. Any great competitor will use this as a pry bar to demonstrate their capabilities. “Our competition is weak on safety. Well, did we mention that we have a mod rate of .45? Did you know we have a full-time safety director?” Regardless of what the competition is using your foibles for, great firms realize that feedback is an essential gift to drive superior long-term performance.

Delivery

It is important to predicate this paragraph with the mantra, “NO ONE LIKES SURVEYS.” They can be tedious, intrusive, time-consuming, and most importantly drive a perception of “what’s in it for me.” Why should I take a survey for you that serves you? The reason that so many people have an apathetic stance on surveys is because they see little to no improvements resulting from the survey. Sure, you can win a gift card for your investment of time but in reality, there is little upside for my time when you will most likely do nothing as a result of this questionnaire. Truer words have never been said.

First it is important to create a simple survey that is user friendly. No one wants to see “This survey should take approximately 20 minutes to complete…” Limit your questions to several key drivers:

How did we do in communicating with your during this project?
Did we meet or exceed your expectations on schedule?
Did we drive value throughout our processes?
Would you use our firm again?

Whether it is yes/no or some Likert scale, the questions should be direct and tied to the values of the firm. A question about scheduling is perfect, especially for a firm that engaging in many fast track projects. Even if a firm only engages in hard-bid projects, there is great value in receiving this feedback. For instance, questions might provide insight on safety or operational issues facing the business. Productivity could be enhanced through feedback on crew sizes and efficacy of crews and equipment.

Additionally, there is an over-reliance on electronic surveys. The “DELETE” button is a wonderful tool and unfortunately allows the customer to kick the can down to the next customer. If a firm is failing to receive feedback it is important to ask specific questions about the strategy:

Is the survey too complicated?
Do we not follow-up with the customer?
Do we send too many surveys to the same customer?
Should we make this an interview?
Should we use a self-addressed stamped postcard? (Something about wasting that stamp…)

Regardless of the survey vehicle, it is critical that a firm communicates with the customer. For instance, whether the feedback is positive or negative, the firm has an obligation to respond to the customer to not only thank them for taking the time to provide this gift but also demonstrate a willingness to make change. There should be a process within the firm to adequately handle critical feedback. One example might be creating a mandatory visit by the CEO or president with the customer in situations where feedback scores are less than a certain level. It is not meant to be retaliatory, and a contractor should never become defensive when they see critical feedback even if they believe it is false. Rather it should demonstrate a sincere willingness to listen and most importantly serve as a call to action internally.

When a customer sees the fruits of their labor manifested in the form of a strategic change – i.e. improved safety, better communication, etc. – they are more apt to respond the next time. Being peppered with 10 emails a quarter and seeing zero improvements is the quickest way to drive a deeper wedge in customer relations.

Metrics

While the feedback helps a firm make strategic improvements in its delivery, it is also important to use this data to provide an internal scoreboard. While most will agree that four out of five dentists endorse gum chewing, it is equally interesting how powerful numbers are to businesses. For instance, assume a firm has a vision to “Become the best contractor in their geographic market.” How would a company measure “becoming the best?” While there is no agreed upon definition of best, it is important for a firm to have some set of parameters. A metric such as “net promoter score” is the equivalent of 80% of dentists agreeing on gum. Imagine the impact of a firm being able to say “According to our customer research, we have a 98% approval rating amongst our peers, which is 16 points higher than the industry average….” We live in a world that routinely talks about data and numbers but how many firms transform the data into marketing genius? Once again, it is important to realize the benefit is not some stodgy set of numbers but the nuggets of business knowledge that customers share about what they like and dislike about you. Metrics sell and create believers.

Lastly, it is important to have an internal feedback loop that is constructive. While it is easy to fixate on the negative feedback, it is equally important to create chatter around the positive responses. For instance, firms that only discuss the negative will quickly create a fearful culture of customer comment cards. Celebrate the wins and use those testimonials as internal evangelism about the right behaviors managers, estimators, accountants, superintendents, technicians and owners should exhibit.

Customer feedback is a gift. Done correctly, it serves as a sounding board for the firm’s overarching strategy. Market research done in a vacuum is simply the generation of useless data. Determining why the dentists like gum and endorse gum-chewing become game-changing questions for the gum business. Now we can work on those 20% who need to see the light.

FMI is the largest provider of management consulting, investment banking, and research to the engineering and construction industry. FMI works in all segments of the industry providing clients with value-added business solutions. For more information visit www.fminet.com or contact gschoppman@fminet.com.