Practical Application: Measuring Customer Satisfaction Using Surveys & Focus Groups

Instructor: Scott Tuning

Scott has been a faculty member in higher education for over 10 years. He holds an MBA in Management, an MA in counseling, and an M.Div. in Academic Biblical Studies.

In business, making assumptions about customers can be a big mistake. Customers may not want what businesses assume they want. In some cases, customers struggle to articulate what they want. To combat this, companies use surveys and focus groups.

Staying Competitive

Harold and his wife Joan have been living in their relatively small, rural community for more than 40 years. In 1972, they took a leap of faith and opened the XYZ Mercantile. Originally, the store focused on farming and ranching supplies. Over their four decades in business, they expanded to offering household goods, equipment, hardware, lumber, and work clothing. Now, however, Harold and Joan are facing a daunting challenge.

In the last 3 years, their now not-so-small community has attracted two big-box retailers. One of these, a home improvement megastore, has threatened to bury them using a competitive advantage that XYZ Mercantile can't touch. Volume buying power means a greater in-stock selection. Internet-based sales allow contractors to place an order from their desks and pick up the entire order three to six hours later. Harold and Joan are rightfully concerned.

  • How do they address this substantial threat?
  • Is it time to ''throw in the towel''?

Finding Your Niche

After making a definitive determination that they do not want to shutter the Mercantile, the couple hired a business consultant to help them get better positioned for the new reality. The consultant provided a list of recommendations, but they all boiled down to one thing: It is time to stop dabbling in everything and instead become really, really good at something. (Often called a ''niche'' market.)

  • What can XYZ Mercantile offer as a niche?
  • How do they find the customers who want these products?
  • What kinds of research tools are available to XYZ's owners?
  • Which one(s) would be most effective at answering their questions?

Tools of the Trade

Both surveys and focus groups are great tools for determining customer wants and needs. XYZ's business consultant asked Harold and Joan to provide him with a list of questions that they thought might help find the niche. Here's the first draft of what they came up with:

Initial Question List

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