Category: User Research

Here’s a small but important lesson about getting field research done in a corporate environment. If you propose research, folks may hear that word and think R&D, and that’s not capitalizable, i.e. the cost can’t be allocated against a particular product/service. That means the cost can’t be delayed and counted against future revenues (delaying costs can be good for budget reasons or simply for the time value of money). This is because if you’re doing work for a project you have a much higher degree of confidence it will provide a return versus doing pure research & development.

If you can make it clear that the work is applied against a particular project, great, but otherwise be careful of using the word research to people who might interpret it in the accounting sense of the word. As an alternative, how about information gathering? Any other suggestions?

Last week a friend of mine was telling me about how new products are created at her software start-up. Essentially it consists of salespeople talking to current and potential customers about an existing product and asking, “What else would you like it do to?”

That in itself is a fine question that acknowledges the customer as having valuable ideas. But in this case, and others I’ve seen, it comprises the entire idea-generation process and grows out of a requirements mentality that looks superficially at customers’ needs. The organization substitutes the customer for the business analyst and lacks a business model and product concepting process. Instead of having a vision of how the company could satisfy unmet needs or create new markets, they’ve abdicated responsibility for new product development to the customer, which doesn’t always reveal useful insights.

These companies have a special need to move design and innovation activites from the production end of the business, which asks “How do we build?” to the front of the business, which asks, ‘What should we build?’

The One Number You Need to Grow by Frederick F. Reichheld is a great, short article on using one-question surveys that measure loyalty correlated with customer behavior. Highlights:

‘Every month, Enterprise polled its customers using just two simple questions, one about the quality of their rental experience and the other about the likelihood that they would rent from the company again. Because the process was so simple, it was fast. That allowed the company to publish ranked results for its 5,000 U.S. branches within days. …the company counted only the customers who gave the experience the highest possible rating…By concentrating solely on those most enthusiastic about their rental experience, the company could focus on a key driver of profitable growth: customers who not only return to rent again but also recommend Enterprise to their friends.’

‘In most of the industries that I studied, the percentage of customers who were enthusiastic enough to refer a friend or colleague — perhaps the strongest sign of customer loyalty — correlated directly with differences in growth rates among competitors.’

‘Companies have tended to focus on customer retention rates, but that measurement is merely the best of a mediocre lot…they basically track customer defections’

‘For a while, it seemed as though information technology would provide a means to accurately measure loyalty. Sophisticated customer-relationship-management systems promised to help firms track customer behavior in real time. But the successes thus far have been limited to select industries, such as credit cards or grocery stores, where purchases are so frequent that changes in customer loyalty can be quickly spotted and acted on. ‘ – Behavior is difficult to study and quantify, lots of data might help.

‘My personal bet for the top question (probably reflecting the focus of my research on employee loyalty in recent years) would have been "How strongly do you agree that [company X] deserves your loyalty?" Clearly, though, the abstract concept of loyalty was less compelling to customers than what may be the ultimate act of loyalty, a recommendation to a friend.’ – This question raises the same kind of emotion that occurs during real behavior, and might help explain why it’s a better indicator of behavior.

I like how he used a 10-point scale then clustered the results into three types of customers, avoiding “grade inflation.”

Also see the Loyalty Acid Test.