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*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~* TODAY'S TOPIC: What's your CLQ™ - Customer List Quotient? With email providing a direct, inexpensive communication link to customers, you’d think corporate customer email lists would be as current as today’s newspaper. Can you honestly say that about your company’s customer database? Many organizations only discover the impoverished state of their customer email list when they decide to send out a customer satisfaction survey. That's why we, being THE Survey Company, are so concerned about improving America's Corporate Customer List Quotient(TM). Yes, friends, we've invented a new tool (and of course, an acronym to make it memorable), the CLQ(TM), to give you a convenient measure of your company’s email list quality. Before we show you how to calculate your Customer List Quotient, and how to improve your CLQ, let’s talk about how an accuratge email list benefits your company, and then look at some of the ways an outdated, inaccurate customer email list can cost your company time, money, and good will. BENEFITS OF A WELL-TENDED LIST A well-managed list gives you fast, direct, reliable access to the customers you have worked so hard to acquire. Since it costs far more to acquire new customers than to maintain or increase business with existing customers, it makes sense to keep close tabs on the customers you have. With a valid email address list, you can quickly notify customers of a new product or an upgrade of a product they already own, confident that your notice will reach the right people. You can alert customers about a technical problem or product defect before it becomes a major embarrassment. You can make targeted offers based on customer buying patterns or demographics. And of course, you can survey your customers to discover emerging needs and to learn how you can increase their satisfaction and loyalty. Don't think you're in the clear because your company has one of those expensive customer database management systems. You may have holes in the system that have gone unnoticed or have been ignored because quite frankly, list maintenance is not simply a technological challenge. It takes a great deal of cooperative effort, usually across functional divisions, to keep your list current. CONSEQUENCES OF MAILING LIST NEGLECT In contrast, a neglected email list limits your company’s ability to cultivate your most valuable asset – your customers. We most often conduct business-to-business surveys, where you might expect reasonably good lists compared to companies whose customers are consumers. Yet we typically see “bounce rates” as high as 20-30% undeliverable email addresses. If only half of these addresses represents an actual, current customer with whom your company has lost contact, that’s 10-15% of your hard-won customers who won’t hear about your latest offer, won’t tell you what they are looking for in future product releases, and/or won’t have a chance to tell you why they are thinking of switching to another vendor. (Maybe since they have not heard from you, they think you're taking them for granted!) A second consequence of neglecting your mailing list is that accurately addressed but inappropriate survey invitations can be embarrassing – for example, when the recipient is a prospect involved in delicate negotiations, or is a former (and possibly disgruntled) customer who has asked to be removed from the database in the past. A third scenario in business-to-business surveys is that the addressee is not the appropriate contact person within the company. Sometimes we get lucky: the addressee replies to the misdirected invitation and provides correct contact information. It takes time to reply to this thoughtful act, and to issue a new invitation, but at least the database can be updated. At other times, the addressee replies saying they are not the correct contact but they do not know who is. Sometimes the addressee just ignores the message, so we lose the opportunity to receive feedback from that customer. Sometimes, they forward the message to the appropriate person, who may complete the survey but whose contact information never makes it into your database. Finally, surveys usually involve reminders. We sometimes receive replies that are less than polite, particularly from disgruntled former customers who disregarded the REMOVE option in the initial invitation). Of course, we always take responsibility and apologize for the intrusion. HOW TO CALCULATE YOUR CLQ(TM) You can determine the CLQ for your company or division using a simple formula. (If you're mathematically challenged, relax, it's easier than it looks.) The elements are:
TC= The actual number of customers who currently own your product and/or
use your services (“True Customers”) The formula is: CLQ = VL/TC Where: VL = NE - (B + IC + E1 + E2 + P) And : TC = VL + ZE A company with no bounces, incorrect contacts, etc. (B, IC, E1, E2, P, and ZE = 0) would have a CLQ of 1, a perfect score. OOO's (Out of Office) don't count against your quotient, but if you have a lot of them they can definitely affect your response rate. If your customers travel often, and how long they are likely to be away, be sure your survey time period extends to at least 1.5 times the average time OOO for your most important contacts. As you might expect, quality of lists varies tremendously. Just to give you an idea what to expect when you calculate your CLQ score, here are figures we put together based on a recent survey.
For this company, VL = 4543 – (1724 + 37 + 79 + 22 + 19) = 2662 This company has an unusually high “ZE” factor. By decreasing the number of customers with no email address listed, they could substantially increase their VL score and hence their CLQ. You're doing well if your CLQ is .8 or higher. ASSESSING YOUR CLQ(TM) About the only way to assess your Customer List Quotient(TM) is to send out an email message to everyone on the list. This is fine if you really have something to say to your customers; if not, you may find yourself accused of spamming. For that reason, you may have to make some estimates to get a handle on some of these numbers. To get an idea of what to expect, you may choose to send out a pre-survey message to everyone on the mailing list to notify them that the survey will be distributed on a certain date, and asking them to confirm that they are the correct contact for the survey.
The pre-survey notification method typically yields corrections and/or
removal requests for about 5-10% of the list. It also enables us to
identify invalid email addresses and remove them if we wish, although
removal is not necessary. The pre-notification message will generally
underestimate the number of incorrect contacts, since many people will not
take the time to reply. However, it is an important first step in
assessing the state of your customer email list.
For business-to-business surveys, we have seen the best results when the
list manager establishes a routine for updating customer information. One
of our clients surveys one tenth of their small but high-end business
customer base each month. Two weeks before the survey date, we send out a
notice to account managers whose customers are scheduled to be surveyed
that month. Each message includes contact information from the current
database for one customer. The account managers have about 5 days to
respond with corrections. Over the course of about 18 months, this
practice has reduced the percentage of undeliverable invitations from
about 15% to about 5% per month. Misdirected invitations have also been
reduced. We also encourage account managers to contact their customers to
let them know when they will be surveyed and to encourage their
participation. This practice has helped response rates as well as
increasing the accuracy of our email list.
Everyone who comes into contact with customers should have a way to obtain
email address information, and should be able to enter that information
into a database where it can easily be accessed by the list manager. Too
often, we hear reports that sales people or support reps are “too busy” to
take the few moments required to obtain or record customer email
addresses. Managers should challenge that attitude by making sure
employees understand the importance of obtaining current, accurate email
contact information for every customer.
The list manager may not be able to hold divisions, departments, and/or
individuals accountable for the quality of the customer information they
provide. But he or she can champion the importance of a current list, and
when appropriate, acknowledge and recognize units that keep their customer
contact information current.
FUTURE OF THE CLQ(TM)
We think the CLQ is a good indicator of the health of a company's
relationship with its clients. Like hypertension, an unhealthy email list
may not be diagnosed until a critical event occurs – such as a 30% bounce
rate when you send out survey invitations. Don't be caught off-guard -
check your CLQ today!
Joanne Gainen, Ph.D.
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We're happy to talk with you about using personalized email invitations
and targeted reminders to increase your survey response rates. Please call
877-666-2486 or send email to jgainen@surveycompany.com.
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