Andrew Patterson finds new market research software that will disrupt traditional data collection methods

By Andrew Patterson

Imagine running a business where you could measure your customer service performance in real time based on actual feedback and then benchmark your business against others in the same sector?

As every business owner will tell you, it’s much easier dealing with service quality shortcomings or performance issues as they arise rather than allowing them to escalate, leading to the risk of reputational damage to your business as a result.

While some might argue that transactional power these days resides with the customer, a powerful new software tool is attempting to redress the balance giving businesses the opportunity to deal with service issues in real time creating a win-win for both parties.

‘Customer Radar’ is the brainchild of Auckland marketing entrepreneur Mat Wylie who has spent the last five years developing the technology.

He believes the software has the potential to completely disrupt the traditional market research model.

Previously, this has involved either using mystery shoppers to spot check a business or armies of clipboard carrying contractors to administer questionnaires to customers, or a combination of both.

More disruption

The cloud based software is the latest in a series of disruptive technologies that are rapidly changing the way information is gathered, analysed and then disseminated allowing business owners and managers to dramatically improve both the quality and effectiveness of their decision making; and doing so in real time.

“For some time there has been a big opportunity to develop a platform for live customer feedback in a way that allows it to be properly analysed and displayed as data. To an extent, we’ve had to wait for the technology to catch up but we’re now at a point when businesses can not only deal with that data but they can respond to it almost immediately.”

The system works by using the customer’s mobile phone as the primary feedback device and uses a seamless text based approach that doesn’t even require the handset to be a smartphone.

“Not only does everyone have a mobile these days but they always have it with them. This makes the customer very engaged and able to provide instant feedback if the platform is made simple enough for them to do so.”

“So that’s really the value of the software. It allows businesses to monitor what the customer is thinking at an exact moment in time rather than after the fact as has traditionally been the case.

A four year hiatus

In an unfortunate twist of timing, the fallout from the global financial crisis (GFC) and its aftermath temporarily delayed the roll out of the software which had been developed in 2008 ready for launch in early 2009.

“The impact of the GFC really put a huge amount of pressure on us. We found that many of the businesses that had initially expressed interest in the product just stopped spending on everything that wasn’t absolutely necessary.”

“So we asked ourselves lots of questions about the system and the methodology and continued to undertake further development in a way that we probably wouldn’t have done otherwise.”

“So in the end we’ve ended up with a more robust product and we’ve probably ended up in a better position as a result.”

Funding

Start-up businesses in the technology and software space are notorious consumers of capital and Wylie says Customer Radar was no exception, although he heeded some timely advice given to him not long before he started developing the product.

“I was warned from the outset the product would end up taking three times as long and cost three times as much as I expected. But being an entrepreneur, I was sceptical of that prediction feeling that I had everything well under control.”

“However, I’ll admit I was wrong and the total cost ended up being much more than three times my original estimate, though I’ve had the advantage of being able to self-fund the development by leveraging off another marketing company I established some years ago as well as self-funding the business as well.”

Customer insights

Increasingly businesses are wanting to understand more about their customers not only to gain a competitive advantage but also to gain insights about their motivations, their feedback and their perceptions.

A more satisfied customer not only creates loyalty but is also likely to make a customer more likely to recommend the business to others.

“This technology actually gives you the ability to see right into your customers eyes as it were without having to do so in person.”

“In terms of the practicality of the feedback this sort of research can provide, one of the best examples I’ve come across was a hair salon that discovered from one of its customers that the ceiling above the shampoo basins was dirty.”

“When you think about it, when was the last time the business owner sat back and looked up at the ceiling as each of its customers had to do? Obviously never! Now it’s a simple fix but from the customers point of view they’re looking up at that ceiling and starting to wonder what else in the salon might be dirty. You also have to wonder how many other customers had looked up and came to the same conclusion before they were alerted to the issue.”

The other aspect of the software that makes it increasingly more valuable is the data and insights it accumulates over time.

“To date we’ve had more than 350,000 responses through the system and that means we can offer some very effective benchmarking tools by industry, region, gender etc in order to manage the business more effectively.”

Validating the idea

While Wylie freely admits that he broke the cardinal rule of entrepreneurship to validate the idea first before embarking on its development, his marketing experience told him that the system was likely to be popular with a range of businesses wanting to gain customer insights more effectively.

“It was entirely gut feel because when we researched the concept, we found that, surprisingly, there wasn’t anything like it that existed. This is all greenfields for us and you’re actually creating a new type of research model as you go so it was difficult to research because we saw an opportunity in the market that was somewhat unique.”

Key to the success of the idea has been the growth of mobile phone technology and the fact that no one goes anywhere these days without taking their mobile with them.

“Our system is entirely text based so it doesn’t actually require users to have a smartphone. Customers are able to respond to an invitation at the bottom of the till receipt or issued separately and they’re asked to give an answer to a specific question such as: how likely are you to recommend this business based on your current experience. They are then provided with a rating code as well as being able to add in any other feedback they wish to and that’s pretty much it. So it’s a very short and simple process.”

Research has shown that a customer’s willingness to recommend the business to others is one of the most powerful forms of marketing available and an important metric for any business to understand.

“It’s called a net promoter score and it’s a very different approach to asking a satisfaction question because if I’m being asked if I would recommend a business then I’m actually putting my reputation on the line for the business and that changes the dynamic and the way that you think about a business from a customer’s perspective.”

Incentivising customers to participate

So how willing are customers to participate in the process and do they need to be incentivised?

“We always encourage businesses to incentivise customers to respond but not in a way that’s over the top and looks like your buying favour with them.”

“Typically we achieve a 20% response rate, so that’s one in five customers being willing to engage and provide feedback to give you some very specific and accurate information.”

There’s often a perception that the only people who provide feedback are those wanting to complain. Wylie is adamant that’s not the case.

“Research consistently tells us that 95% of customers don’t complain. So if you think about a retail environment which can be hard slog. Customers don’t often get a chance to say hey, thanks for smiling and going out of your way to help me. But that information is just as powerful to encourage good behaviour as getting the complaints that discourage bad behaviour.”

Visual display

The whole system is delivered via a series of live dashboards so businesses can log in and see exactly how they are performing from their customer’s perspective at any point in the day or night as the case may be and all delivered in real time. There’s also the ability to be alerted to negative feedback allowing an opportunity to proactively recover that customer.”

“Many of the current methodologies suffer from time delay. Even those that do aggregate the data on a monthly basis still have the issue of managers being presented with a report that is out-of-date because it tells you that say 35 of your customers were dissatisfied with the service but by then it’s probably too late to do anything about it.”

“We’ve also had businesses achieve significant cost savings because they’ve been able to optimize their staffing rosters more efficiently by deploying staff when they’re needed rather than when they’re not. One cafe owner recently told me they had saved $50,000 on their wage bill by using the system to roster their staff shifts more effectively.”

Next steps

The opportunity to link the business in with other cloud based products is one that Wylie sees as the next stage for Customer Radar.

“We’re already operating in Australia and we’re having conversations with people in Asia about how we can use the technology there so we’re looking at the scalability challenges that will involve in the future.”

“The ability to partner with other software providers to offer integrated solutions for businesses is a strategy that we are currently pursuing.”