MARKETING MATERIAL
9036 MARKETING MANAGER 3 - LISTENING TO YOUR CUSTOMERS
At the beginning of this book I defined marketing in general as a dialogue; listening and then talking. Of these two activities the one which encapsulates effective marketing is listening; the very reverse of what most people expect! You can't satisfy a customer's needs and wants until you have found out what these are; and that means you must listen to your customers very carefully indeed. Most text-books describe this process as marketing research. I like most practitioners - albeit incorrectly - call it market research - and I will, throughout the book, use the same terminology as those working in the field. In any case, as I have already indicated, I think listening is a much more useful term; especially as it most often takes place in the form of face-to-face contact between suppliers and their customers; not just between sales-personnel and buyers but between all those involved - probably including yourself.
So, mortally offending my fellow academics, I will start with how you find out about your customers when you talk to them face-to-face:
QUESTIONING
The starting point is the process of questioning them. This might seem easy to achieve when you are asking questions based on your own personal interest, but most people - even then - simply are not very effective at asking such questions. They ask very specific (closed) questions which tend to narrow discussion; and, in particular, tend to confine the discussion to the areas set by their own personal preferences or prejudices. Much more useful are those (open) questions which allow the person being questioned to adopt a wider view. These questions (of which the simplest - Why? How? What? - are the most powerful) encourage the speaker to say what he or she considers is most important about the topic. The listener can then gain the most benefit from the speaker's knowledge and expertise. Later in the conversation closed questions can be used to steer the conversation to the topics of greatest interest to the listener.
Open questions also seem to be the most difficult for a manager, perhaps such as you, to ask; possibly because they are not so obviously leading directly to the answer that is wanted. But they are the key to unlocking the tongue of the person facing you. If the conversation proceeds with very short replies (and particularly just yes or no), it is likely that you are not using enough open questions; and may be missing the real issues. The more open the question the better. The most powerful question is quite simply 'Why?', often closely followed by 'How?'. In practice, open questions come naturally if you are genuinely interested in finding out what makes the prospect's business tick. One successful, if little reported, way of getting round these problems is 'rambling'; giving the customer the time to 'ramble' around the subject.' This can be an enormous strain on the listener, for it is very difficult not to interrupt. But, in the same way as interrogation methods often depend upon allowing the prisoner to ramble so that they inevitably give away 'too-much' of themselves, if the listener simply allows the speaker enough time - and does not interrupt his or her 'rambling' - the full answers will emerge.
Even if managers do ask the correct open questions, they often undermine the progress by stopping the speaker in mid flow. The natural accompaniment to an open question is silence. It is, though, a surprisingly aggressive technique, and you should not make it too obvious - it is best just to look very thoughtful. The person you are questioning will eventually feel obliged to talk, and usually what he or she then says is especially enlightening (since he or she too will have had time to consider).
As indicated above, closed questions, typically requiring the answer "yes" or "no", have (justifiably) received a bad press. But it is still necessary to use them quite extensively to clarify points. The problem only comes when they are used instead of open questions. In many situations by far the most important closed questions (and arguably the most important questions of all) are those where you check for agreement. As the discussion progresses, it is imperative that you establish whether or not you are taking the other person with you; or, as is all too often the case, is he or she politely acting out the role of audience to your orator?
But you must not just put good questions to a customer; you must listen to the answers. Many managers are too busy trying to put their own view across to hear what is being said in reply; and thus they miss much of the key information which is emerging in such conversations. Listening implies far more than hearing. It also involves the process of analysing what is heard, to understand it; to make sense of it in general, and then to put it into the intellectual framework of the organisational activities being discussed. Listening is a very active pursuit, not a passive one or the listener will soon become a sleeper.
It is conventionally reckoned that a good questioner should spend two thirds of the time listening and only one third talking. What is important, though, is how you use that time. It is the quality of the listening (which has much to do with how you analyse what you hear) that is as important as the quantity
UNDERSTANDING
Thus, hearing, and even listening, is not enough. The key to questioning by managers is understanding. This is a process to which the main contribution must, of course, be made by what the person being questioned says; though it should be noted that this may include what he or she said in a number of previous meetings as well as in the current one. But it will also include all the other evidence you have unearthed. Put it all together and, hopefully, you will be able to complete the jigsaw.
Understanding of informal communications is, therefore, a cumulative process; that may span several discussions. It is a an important skill for managers; yet it is largely ignored by management educators.
So much for obtaining information from customers when you meet them. But, of course, market research goes beyond these informal contacts. A lot of the time you are not even talking face to face. Indeed, it covers a great deal more and is - as I have said - the most important element of marketing. So we will now look at the techniques which are used in the wider world of market research. To see how you can obtain the best possible information on your customers; and understand it.
ACTIVITY
After the next time you get involved in such a question and answer session, with one of your colleagues say, spend a few minutes thinking through, and preferably noting down, what happened in the meeting. Did you use enough open questions? Did you really understand what was being said?
At later meetings try to listen more; and again review your performance afterwards.
DESK RESEARCH
The starting point in most cases will almost inevitably be the information which is already available. Quite often this can even be found in your own files - so these should be a good starting point. You may be surprised what you find there! When I worked for IBM I once spent nearly £30,000 finding a supplier with the suitable leading-edge technology I needed; only to discover that they were another division of IBM!
So, the first thing you should do is select and organise those pieces of your own data which are relevant. In marketing they are often most usefully organised into facts files - literally files in your normal filing system - or even more simply facts books - summaries on sheets in a loose leaf binder. In addition, you could also set up a 'clippings' file: to contain the news-stories and articles which you find about your products, markets and competitors.
The first, usually the easiest to find and often the most important, facts typically relate to product/company performance. In recent years these have been handled by computer. They should include accurate sales data - split by product and by region - and it should even be possible to obtain up-to-date information via your own personal computer. Regrettably, even if the system is near perfect, it is likely to take account of only those transactions which result in the organisation actually completing a sale; it is unlikely to record those - just as important - which are lost!
Even so, there may still be masses of data so a very practical device which can assist you in organising this data is what is called ABC Analysis. This could not be simpler. When you (or more likely your computer) are listing the results of any analysis you just print the output in descending order of importance. In this way, the key items are always at the top and receive your immediate attention. On the other hand, the minor ones are at the bottom where it does not matter if they are ignored. This may sound trivial, but by itself it may revolutionise your view of the world. No longer will those customers, and products, whose name starts with the letter 'A' dominate your life!
Perhaps more important, where this listing will typically be in terms of volume (or value) of sales, the highest volume (and hence most 'important') customers will be at the top of the list and the many low volume customers at the bottom; and, as the top 20% of customers on such a list are likely to account for 80% of total sales, this approach can, in effect, be used to reduce the data to be examined by a factor of five.
This brings us to what may be the most powerful concept of all in management theory; the 80:20 Rule, mentioned earlier, which has been in use for more than a century. First enunciated by an Italian, Pareto (hence its alternative title, the Pareto Rule), it is just as relevant today. It is still one of the most productive tools, and one of the few general ones which can be applied to almost any marketing situation. It simply recognises that the distribution of potential, be it in terms of products or customers or whatever, will almost inevitably be skewed; some of these will be more important - heavy users say - than others (and some much more important). That the typical skew is so large that 80% of sales, say, comes from 20% of customers (and conversely that 80% of customers contribute no more than 20% of turnover) may come as a surprise; but has been born out by countless practical examples. Its power comes from the fact that it enables you to concentrate your resources on just that 20%; confident that these are the important ones, responsible for 80% of your 'business' - and can safely limit any investment in the other 80%.
ACTIVITY
Take the list of your customers, or failing that your products or services, and list them in order of importance. How well does the 80:20 Rule apply? Does this change your opinion of the customers (or 'products') in question?
SALES REPORTS
Another potentially invaluable source of information is reports sent in by the sales-force; though this time it is likely to take the form of words rather than figures. If they are doing their job properly, and it has to be admitted that is a big if in the case of badly managed sales teams, their reports will provide revealing insights into what makes individual customers, and the overall market,tick; as well as advance notice of what your competitors are doing. So it is worth treating these reports like the gold-dust they really are!
EXTERNAL 'DESK' RESEARCH
As the title of this section suggests, this uses data which does not come from within the organisation, and for which the main source is published data (in its widest sense), often referred to as secondary data (because it has been generated in response to someone else's questions). Once the data has been located, its handling follows the same processes as for internal data. It is the 'finding' that is different.
The widest ranging source of published data (on everything from details of ancient civilisations through to the latest stock market prices) is usually a library, typically a public library. Reference libraries which are usually part of the central library will hold stocks of books on a wide range of subjects. More important, though, is that these libraries have access to national libraries. As a result, if you can find sufficient information to specify the book (usually Author, Title, Publisher and Date of Publication - though often just the Author and Title may suffice) it can usually be retrieved from this source. I consult literally hundreds of books (and articles) in this way each year. For data located in journals, often specialist periodicals, the best source may be one of the more specialised libraries, such as those run by trade associations. The most important directories will also be available in your central library; but, again, the more specialised ones may only be found in those of trade associations. National and local government departments and agencies are often major providers of data; especially to support specific 'initiatives - but they may still be useful for other purposes. A growing amount of information is now being made available on the Internet; though it may be difficult to find amidst the mass of other material - but, as it is free, it is worth the try. As the 'search engines', the Web services which offer to locate data for you, seem to change almost on a weekly basis, I will not attempt to tell you exactly how to use these; but it is important that you do use them - and they really are easy to use (just follow the simple instructions). On the other hand, one of the best sources of data, not least the 'informal' data acquired during conversations at meetings, is that of trade associations. There is usually a fee for membership; but this is frequently very good value, in terms of what may be learned from these sources.
On the other hand, the most prevalent, but unrecognised, source of external data for all managers (and the one which covers, 'scans', the widest perspective) is that of the news media (especially the morning newspaper and the television news and current affairs programmes). The amount of information these provide is probably vastly greater than that received from any other source; albeit that the coverage is so much wider. Ideally a number of newspapers should be read (even if only occasionally - and then only an additional Sunday newspaper) to judge the bias each almost inevitably imparts to even the simplest news item.
ACTIVITY
I will leave you to try and find data on the Internet, no doubt spending many happy hours doing so.
But, may I suggest you also visit your local (reference) library and talk to the librarians there - to see what they can also offer. It may now seem somewhat old-fashioned, but in my experience reading books and articles is still the backbone of desk research!
SURVEY RESEARCH
The next stage, having found out as much as you can from existing information, may be to undertake your own specific, direct (primary) research. Although you will appreciate many of my earlier comments - about listening to customers - apply equally here, this investigation is likely to be more formally structured, and more comprehensive in its nature; so that the end result, from a number of interviews say, offers a meaningful explanation rather than a disconnected series of anecdotes. At this stage, therefore, I will divert into the rather academic world of market research. In this context there are two main approaches: qualitative research, which paints a general shape of what is happening (without any numbers), and quantitative research, which takes this outline picture and fills in the detail with statistics as - for instance - to how many customers fit into exactly which category.
QUALITATIVE RESEARCH
Much of the research, probably most of it, falls into this area. In industrial markets, for instance, there may be so few customers that the depth interviews - unstructured interviews taking literally hours to complete, which are the staple diet of industrial market researchers - are the only way of conducting research; and the high cost - of employing the very skilled interviewers needed - is justified by the importance of these customers to your business. One caveat, making sense of these interviews requires a great deal of skill, so you are quite dependent on the expertise - and knowledge - of the researcher.
In industrial markets where there are more customers, and more generally in consumer markets, the equivalent is the focus group. You gather together half a dozen or so typical customers or prospects, in a group, and you get them to talk - freely - about the ideas you are investigating. The reason for this is not the cost saving, of asking questions of six people at a time (though that helps!), but is because this process seems to unlock the deeper thoughts that ordinary interviews miss. It may seem nonsensical, that people are more willing to talk about their innermost thoughts in a group of strangers, but experience shows that it works - they are willing to 'come out' in this way on the most intimate of subjects!
In this way you can explore, for example, the real dimensions which may apply to the market segment you want to penetrate. You start them talking, or at least a trained moderator does (for, once more this needs a very skilled touch, if the moderator is not to impose his or her own views), and listen; tape-recording the debate for later analysis. As a result, focus groups are very much the domain of the expert; beware the charlatans who might prey on you - and be certain you take up their references! Beware, also, those who tell you this is a cheap form of research that will answer all your questions. In most cases it should usually be just the starting point for quantitative research.
One further caveat, it is far too easy to select, from the range of views expressed by the participants, just those comments which seem to support your own prejudices. These will, no doubt, leap from the report when you read it, where other less supportive comments will disappear; so listen to the analysis of the experts, not to your own prejudices.
ACTIVITY
If your organisation uses such focus groups, try to view a tape from one of these; most are now captured on video.
SURVEY (QUANTITATIVE) RESEARCH
As indicated above, the key to sound research is usually quantification; so that you know how many customers fall into each category say. Not least - in the context of the previous caveat - this stops you from just using the fuzzy results which come out of qualitative research to bolster your own prejudices!
In text-books this topic often takes most of a whole (long) chapter by itself; it certainly does in my own ones. But - in essence - you take the questions which have emerged from the focus groups - for these, rather than answers, are the most useful outcome - and use them as the basis for a formal questionnaire. Yet again, writing such questionnaires is the province of the experts; because amateurs ask questions which result in biased answers - too often just the ones they are wanting to hear! Then you pose these questions to a sample of customers, or prospects; the survey itself. Again, I will not get into the niceties of sampling; suffice it to say that by questioning a few hundred customers you can get results which are as accurate as if you had asked a few hundred thousand - or all of them!
The traditional way of carrying out such a survey is to let loose an army of interviewers to knock on your door or to accost you in the street. There are advantages in such an approach, as long as the interviewers are well supervised (which, be warned, they sometimes aren't), in that quite complex questions can be asked; and the interviewers have the 'respondent's' body-language' to help them understand the replies. But it can be very expensive - so despite everything you imagined - it is not very often used.
Much more likely is the mail questionnaire; which is used by many more organisations - including those in industrial markets. In this case the questions are sent by post. Many academics deride this approach as being inaccurate, but our own evidence is that - given the correct design - it needn't be; and it is much, much cheaper - so you can't offer the cost as an excuse for not finding out what your customers really think! But it does have its limitations, the questions can't be complex, and the questionnaire has to be short; and you don't have body language to help you out. Telephone surveys lie somewhere between the two approaches - and are now the staple diet of political pollsters; because they get the results back so fast.
ANALYSIS
There are a wide range of bewildering computer analyses which can now be applied to the results. My advice is quite simply to look at the raw results, the simple tables of how many customers fall into each category. If the answers do not leap out at you from these then the sophisticated computerised analyses are probably reporting results which lie on the borderline - and do you want to bet your money on such thin evidence? The exceptions are those areas, such as segmentation, where factor and cluster analyses are needed to find the groups. Here the only advice is to find yourself a statistician you really trust!
THE REPORT
Most managers are poorly trained in the skills needed to make sense of the reports which emerge from these processes. As a result, they tend to read the related conclusions uncritically, accepting (or sometimes rejecting) them at their face value; usually on the basis of what they think of the researcher presenting them, or whether these results confirm their own existing prejudices.
Perhaps the most important question, but the one which is least often asked, is how reliable is the work. What weight can be put on the results and on the judgement of the researchers; and, probably even more important, on the experts who are likely to be recommending some form of action to be taken on the basis of the findings. Even so, most research reports contain bias, conscious or unconscious. It is very difficult for even the most professional researcher to remove all of his or her biases; and you would be wise to assume that the material still contains such elements of distortion. In detail, therefore, the various stages should be:
SUMMARY - the first element to be read should be the summary. This will provide the context for understanding the detailed results. It should, though, be read in that spirit; not as a list of proven facts, and certainly not (if the research is important) instead of the detailed material.
DETAILED RESULTS - these should then be examined; preferably by looking at the original analyses (tables) as well as the written interpretation - since any interpretation distances you from the facts. They should, once more, be examined critically. Do you agree with what the researcher has deduced from them? There is no reason that any researcher should be more capable than you - in terms of this analysis. He or she, it is true, should be more experienced in the marketing research techniques involved; but you should be more experienced in the field being researched.
THINK OUT YOUR OWN SUMMARY - only then can you think through (and put down on paper) what the key results are, in terms of what affects your own work. It is a long process; but if the research is worthwhile then the effort you give to it should match its importance - and, hopefully, your subsequent decisions will be correspondingly better informed.
ACTIVITY
Try and get hold of a market research report which has been prepared for your organisation. Then do exactly what I recommended above. Can you make sense of the report?
WALKABOUT
The penultimate technique in this section has the simplicity that is the hallmark of the Japanese, and it is their favourite approach; walkabout. The power of the Japanese approach to marketing research is no more than going out and about, where the action is on the product or service in question, and experiencing what is happening. In particular, they meet their customers and distributors and talk through, at length, what is important to them.
It has none of the statistical validity which survey research enjoys, and even desk research can often lay claim to. Yet better than anything else it conveys the flavour, the essence, of what is being studied. If you want to understand Toyota you can spend months of desk research reading the hundreds of papers which have been written about its efficiency, or you can spend half a day watching the confident grace with which the workers on its production lines assemble cars as I have done. The essence is experience; assimilating what is happening - what is really important to the product or service.
Using this ver crude approach, the Japanese achieve spectacular understanding - the key to effective research - of what is happening in their markets. Perhaps even more important, they then act upon this. So much research in the West just ends up lost in a filing cabinet. If you don't do anything as a result of your research it has been wasted!
This, then introduces the final technique, which (for those managers which can use it) brings together all the research data in the most practical form possible. For many, if not most managers, the marketing research data remains as so much impersonal data lying on hundreds of pages of tables in dusty files. Just a few managers, however, bring it alive by assimilating it into their everyday view of their business life. They build an inner model of the customers they are dealing with. In this way, using the data you have received you should try and synthesise a multidimensional picture of your typical customer, and then they assimilate it into yourself, almost as if absorbing it by osmosis through your skin.
Needless to say, the technique of walkabout is the most useful of all in this process, because it gives the best 'feel' for what the key elements are. It is rather like the actor who uses the 'Method' to bring the character he is to play inside himself. He does not play the part, he lives it. Thus, the synthesising manager should live the part of the customer. The great benefit of this is that the manager does not have to search through the vast collections of data to know what the customer's reaction would be to any of the several dozen decisions which may be made in a day - that would be unproductively time consuming, and is precisely why the research results gather dust. Instead, he or she can draw upon their inner model to instinctively 'feel' what the customer's response will be.
ACTIVITY
Do such a walkabout! Talk, if you are allowed to, to some customers. Try and see the world, and your organisation, through their eyes. Become a customer; phone in as if you are one, and be prepared to be horrified at your treatment!
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