The Tragic Effect of Not Listening to Your Customers

Last Updated Jul 30, 2010 2:21 PM EDT

Our company talks a lot about how we listen to our customers. Your company probably does, too. But are you really listening? We didn't, and paid the price for it.

It's critical to get feedback from your customers.
I'm embarrassed to admit that over the last month our customers have been talking to us, but we haven't been hearing them. About three months ago, we acquired a big competitor. The due diligence work we did prior to closing the deal was comprehensive, including quantifying their number of inbound sales and service phone calls so we could hire enough people to handle the increased volume. Our plan was to merge the company's call center into ours within 90 days of the purchase date, and we did that. Problem was, we vastly underestimated their number of calls.

Almost simultaneously, one of our biggest suppliers abruptly went out of business, causing an additional spike in the number of calls. It was a perfect storm. We normally answer our calls within 25 seconds, and our lost call abandon rate (i.e. callers on hold who decide to hang up) hovers around 5-6%. For the last few weeks, we had some days where hold times reached eight minutes and our abandon rates jumped over 40%. Ouch! Our Net Promoter Score dropped 15% in one month.

Customers were rightfully upset, plus our call center employees were tense and stressed. We called an emergency meeting to try to solve the problem. Sure, we could have hired more people, but they'd still need to be trained, which takes at least a month for the initial training, which was too long.

It wasn't until I received an email from a customer, Marc from Santa Clara, that we finally found a solution. In a straight-forward, constructively critical way, Marc told me four ways we could improve. One of those suggestions was so basic, I can't believe we missed it: "A sales call center with longer opening hours than a customer service call center? I'm sure you're very clear what most folks would perceive from that." That hurts, but he was right.

Within one day, we shortened our sales hours by four hours, moved 15% of our sales consultants to service, and implemented a nifty auto-callback software program to our telephone system. This morning, our abandon rate dropped to 0.45%. Calls were being answered within 18 seconds.

I am grateful for Marc's thoughtful email; in fact, I called him to thank him. Almost half of our business comes from existing customers or people referred by them. It is critical to reduce customer acquisition costs by ensuring that they're wowed enough to come back and become company evangelists. We knew we were doing an atrocious job, and we thought we'd considered everything but we weren't truly listening to what our customers were saying.

What are you doing to encourage and elicit customer feedback? Surveys, follow-up calls? My guess is you're doing a lot of that, but you might not be taking your customers' suggestions to heart. They are an incredible resource. It took Marc telling us something we should have figured out for ourselves to realize that. At least this time, we listened.

Photo courtesy of Flickr / dotbenjamin

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    Jay Steinfeld is the founder and CEO of Blinds.com, the industry leader in online window blinds sales. He is an Ernst and Young Entrepreneur of the Year. His company was named Best Place to Work in Houston, won the American Marketing Association's Marketer of the Year, and Steinfeld was named by the Houston Chronicle as Houston's top CEO in the under-150 employee category for the last 2 years.