Survey Says Low-Cost Options Threaten Giants' Prominence


Survey Says Low-Cost Options Threaten Giants' Prominence

By Paula Bernier, Executive Editor, TMC  |  December 13, 2013

Customer experience has become a key area of interest for many companies and organizations recently. But how do really know what kind of customer experience you’re offering and how you can make it better? One way is through customer surveys.

A study issued by Gartner (News - Alert) in October reports that of those organizations that consider the customer experience, 95 percent measure the customer experience through customer satisfaction surveys.

Surveys, of course, are nothing new. Businesses have been doing them for years. In fact, the Nielsen TV survey in which families kept track of their viewing habits, is legendary. But traditional survey methods tended to be long-term efforts requiring a significant time investment from both surveyors and those surveyed.

There are still those companies who rely on diaries, or telephone calls at the dinner hour, to survey customers. However, new online tools make it easier and faster to create, distribute, collect and even analyze customer survey data.

SurveyMonkey really shook up the traditional survey space in the past few years when it introduced a cheap and easy way to do surveys online. The company was founded in 1999, and in 2008 became the recipient of one of the largest private capital investments on record. It reported $113 million in revenues, and had earnings of $61 million, last year.

Do-it-yourself type tools from SurveyMonkey, Mindshare (which bought survey company Empathica in September), Qualtrics and the like are at the bottom strata of the survey space, said Chris Cottle, executive vice president of marketing at Allegiance (News - Alert). They provide tools, and somebody at the user’s organization needs to figure out how to use them and what they want from them, he said.

The second strata of customer survey companies are those that help customers develop a program to send out surveys in a systematic way over time, Cottle said. That’s where Allegiance and ForeSee play.

At the top of the heap are heavy-duty market research firms. This is a $30 billion market with well-entrenched players such as such as Gallup, J.D. Power, and Walker Research, Cottle added.

But industry newcomers and new communications preferences are beginning to change the power structure among these three stratas.

A Sept. 4 Forbes piece said Gallup revenue was down at least 10 percent in 2012 to about $275 million.

“Gallup’s troubles can be summed up in three words: the innovator’s dilemma,” said the article. “That term, coined by Harvard Business School professor Clayton Christensen, describes the sickness that ensues if you fixate on your high-end customers and ignore the market’s low end. Cheap, new methods seep in, eventually disrupting a whole industry. It happened in steel, retailing and computer storage. It’s happening again in survey research.”

Creep from quick and easy solutions started in 2003 when the Net Promoter Score was invented (for more on NPS, see this issue’s Angle column), challenging Gallup’s lengthy and detailed customer questionnaires, the Forbes piece noted. These days, Gallup and its ilk have the added threat of newcomers like SurveyMonkey and Qualtrics.

The good news, said Danielle Wanderer, head of marketing at Qualtrics, is that survey market tools are now available to a wider array of companies and titles within those organizations. In the past, survey efforts tended be run through market research folks at a company. Now anyone in a company can fairly easily take the pulse of a select group, whether the person conducting the survey is interested in customer care, marketing, product development, or any other discipline, and whether those in the group are customers, prospects or employees.

While this expansion of surveys across organizations is a good thing in many ways, it also has created some fragmentation within companies, Wanderer said, adding there’s now a “huge push” across enterprises to move to a single platform so they can track things like Net Promoter Scores.

That, and the desire for continued growth, has pushed companies like Qualtrics to try to go upmarket, she said, adding that some of freemium tool providers that flooded the market have gone belly up. To ensure Qualtrics doesn’t follow in their footsteps, Qualtrics has modified its pricing, which is based on seats and responses (as opposed to the number of surveys sent out), with different tiers for smaller, medium and large-scale businesses.

Edited by Stefania Viscusi
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