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Straight from the horse's mouth: The everlasting importance of focus groups

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Today you can do a quantitative survey very easily. You don't have to do them by mail or phone anymore. It's all online. You can easily get thousands of respondents and deliver a statistically significant research study back to your executive team in just a few weeks.

But even the best online survey can't replace the old-fashioned way of getting customer insights—the focus group. In this digital age the focus group might seem like an antiquated way of doing research. Many focus groups are done using online meeting tools like iMeet or Skype (I don't have an issue with that because I work for the company that created iMeet and I think it is a great tool for research).

But, I have to say that nothing beats sitting there and hearing directly from your customer. That is where the real insights come from.

When I started my job at AutoTrader.com in 2007, we had a lot of quantitative research about customer satisfaction. At the time our auto-dealer customers didn't like us very much, but the data didn't really tell us why. It looked like it was a price issue. Customers thought we were too expensive. But "price" is usually just a default answer when there is actually something much bigger going on.

So we organized some focus groups with our dealer customers. We went to three cities and interviewed about 60 dealers. What we found was pretty shocking. It turned out that price was not the issue. The real problem was the way we were selling to our customers.

We had an aggressive sales force of hunters. They were out to win business by any means necessary. In some ways this was a good thing, especially when the company was just getting started. We acquired a lot of customers very quickly and the sales reps made a lot of money. We reached a point, though, where there weren't many more new customers to reach. So we had to convince our base to pay us more and buy new products. Our sales force of hunters used the same aggressive sales tactics to upsell our base.

It just didn't work. You can't treat a current customer the same way you treat a prospect.

You really can't blame the sales reps. They were trying to hit their numbers. But when the customer knows you're trying to make your sales quota, that's a very bad thing. As one dealer said in a focus group, "I know my rep is more interested in his business than my business."

The focus group provided compelling evidence that our sales and marketing strategy was off. We videotaped the groups and brought the footage back to show our executive team. Actually seeing our customers vocally

complaining about our sales practices forced us all to take a look in the mirror. We realized we needed to make significant change.

From a marketing perspective, we changed our advertising message to focus on how our reps partner with their customers to help them get the most out of their investment with AutoTrader. And our sales leadership changed the entire philosophy of how sales operates. Rather than hard-selling, they focused on "sales through service." They even changed the comp plan to incentivize the reps who provide better service and retain their customers. The result was a dramatic increase in customer satisfaction and a decrease in our churn.

The insights that drove these changes would have never come from an online survey. They have to come right from the horse's mouth. So, if you really want to get to the heart of an issue, there's nothing better than doing a focus group and hearing directly from your customer.

Jeff Perkins is VP-global online marketing with conferencing and collaboration solutions company Premiere Global Services (PGi) (www.pgi.com). He can be reached at jeff.perkins@pgi.com, or on Twitter: @jeffperkins8.

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