What’s the difference between internal and external customers? How can you figure out what each type of customer wants?
Management experts Ken Blanchard and Sheldon Bowles explain in their business fable Raving Fans that, in order to satisfy both your internal and external customers, you first need to find out what they want. That’s why feedback is so important to a business.
Here’s how to satisfy both types of customers.
External vs. Internal Customers
When the authors talk about your customers, they’re not just talking about the people who buy your products or services. Even if you’re a freelancer or sole owner, your business has many internal and external customers or stakeholders.
External customers are the people who see your business as a provider of something they buy. They’re the people that you create your products and services for and bring in revenue.
Internal customers participate in your business and are invested in your success. They include your team members, departments within your business, suppliers, and manufacturers.
|Some experts disagree with the authors’ suggestion that all parties invested in the success of your business should be classified as internal stakeholders. Here’s a more typical classification of stakeholders:|
Further, many experts classify each stakeholder according to how much they contribute to your business, and whether they are directly or indirectly impacted by the success of your business. These classifications are useful to know when considering who to approach for feedback.
The Fable: Ask Your External Customers What They Think of Your Service
In the fable, once the Area Manager defines his vision, his Fairy Godmother takes him to meet the owner of a manufacturing plant to discuss the second secret to creating “Raving Fans”: Discover Your Customers’ Ideal Service Experience.
The owner insists that your vision needs to include everyone involved in the creation, marketing, and distribution of the product, as their input impacts the service your customers receive. When the Area Manager asks him to explain how to find out what customers want, the owner tells him to simply ask, and then to listen both to what they say and don’t say.
(Shortform note: Up until this point in the fable, the authors focus on business-to-consumer relationships. The manufacturing plant is the first example in the book that demonstrates the principles in a business-to-business context. The diversity of businesses in the fable clearly illustrates how different types of businesses can benefit from the “Raving Fans” principles.)
Find Out What Your External Customers Want
The authors emphasize that customers will often say one thing and mean another, and they stress that you need to look beyond what they say to figure out what they want. In particular, the words “fine” or “okay” indicate that they weren’t that impressed with you but don’t want to make a fuss. Perhaps they believe that you don’t really care about what they think. This type of bland response indicates a problem with how they’ve experienced your product or service. Remember, your customers are always judging you and will certainly be aware of the problems even if they choose not to complain.
(Shortform note: This type of response doesn’t always indicate a problem with your service. Customers often find it difficult to articulate what they want both to themselves and to others. For example, a customer is trying to be healthy so orders a salad, but this customer really wants a burger. Or, a customer doesn’t know what to eat and relies on the restaurant to fulfill a need that hasn’t been specified. In both cases, when asked how the meal was, the bland responses could imply dissatisfaction with the meal or the service, but they could also imply that the customer doesn’t know her own feelings.)
As well as listening to what they say, you must pay the most attention to their silence. Silence from a customer often expresses dissatisfaction. In short, the authors stress that all feedback you receive provides insights, and all feedback you don’t receive also provides insights.
Shortform Exclusive: Feedback Framework for External Customers
Blanchard and Bowles don’t provide actionable steps to obtain feedback or interpret customer silence, and this frustrates some readers. The authors also don’t acknowledge that consumers are picky about how they spend their time and can be reluctant to respond to feedback requests. With these points in mind, we’ve created a framework to help you plan your approach to collecting feedback.
Aim to collect feedback from people who have an interest in purchasing products and services from your company—people who have previously interacted with your business or plan to do so. What you want to know:
- What do they like about their interactions with your business?
- Do they experience problems at any stage of the journey?
- Do they have suggestions for improvements?
- Would they recommend you to friends or relatives?
Segment your existing and potential customers (by interests, purchase history, and so on) and only ask relevant questions. (For example, don’t ask a customer what they thought of your offline store if they’ve only interacted with you online.)
Ask open-ended questions specifically related to steps on your customer journey map—don’t rely on your customers to provide the necessary context for you. Without linking your questions to specific steps, you may find it difficult to interpret and judge the feedback you receive. (For example, the general question: “What did you think of our service?” elicits the response: “Slow and irritating.” You don’t know what step of the process they are complaining about. A better question: “What did you think of our checkout process?”)
Incentivize customers to respond to your feedback requests.
Your approach to collecting feedback will depend entirely on how you operate. Do your customers interact with you online, offline, or a mixture of both? Here are some ideas to get you started:
|Face to face interviews||Email surveys||Social media monitoring|
|After-sales personal phone calls||After-sales personal email||Service reviews & testimonials placed online|
|Feedback leaflets in-store||Feedback forms built into the site||Prior feedback, complaints, & questions from customer support logs|
|Mailings||Online forums with feedback features||Interviews with people in direct contact with your customers, like support/sales teams|
|Focus groups||Live chat feedback||Monitoring what customers say about your direct competitors|
|Customer polls & surveys|
Identify Your Internal Customers
Once you know what your external customers want, turn your attention to your internal customers. Blanchard and Bowles argue that when your internal customers are happy they’re more likely to take the necessary steps to ensure that your external customers are happy. Identifying what both internal and external customers want is essential to the success of your business.
Shortform Exclusive: The Customer Journey Map
While the authors stress the importance of identifying your internal customers, commonly referred to as stakeholders, they don’t offer advice on how to do this. Here’s a practical way to immediately define the stakeholders that contribute to your customer service experience.
Look at the steps you plotted on your customer journey map from Step 1. Now, for each step, list all colleagues, teams, and departments that directly contribute to the service experience you intend to offer. Refer back to the example journey map for the offline store—note that the first column is now used to identify areas of responsibility and contribution:
|Who contributes to the customer service experience in this step?||Step 1: Customer arrives at your store||Step 2: Customer searches for a specific product|
|-Who manages the parking? Who interacts with the customer here?|
-Is the marketing team responsible for displaying store policies?
-Who designs the shop layout & manages accessibility?
-Who manages restocking?
-Clearly displayed opening times & store policies
-Accessibility options for strollers & wheelchairs
|-Products clearly priced|
-Staff to stock shelves during closing or quiet times to keep aisles free & clean
The Fable: Ask Your Internal Customers What They Think of Your Service
Throughout the fable, the Area Manager is greeted and served by genuinely happy and capable employees. His conversations with the owners of these businesses reveal a key piece of advice: How you treat your employees directly impacts how they treat your customers. In other words, happy employees are more willing and able to make customers happy.
(Shortform note: Why should you treat your employees like customers? A study on why employees quit their jobs reveals that lack of motivation and engagement impacts your employees’ sense of loyalty and reflects in the work they produce up until their departure. Many experts agree that businesses can turn this around and encourage commitment to their company’s mission by assessing and meeting the needs of their employees in the same way that they attempt to meet the needs of their customers.)
Find Out What Your Internal Customers Want
The authors insist that the objective of the feedback process for your internal customers is identical to that of your external customers—you want to know what will make them happy. Specifically, what improvements need to be made to create a positive work environment that brings out the best in them?
|Shortform Exclusive: Feedback Framework for Internal Customers|
Blanchard and Bowles don’t provide insights on how to organize and assess feedback to complete this step. However, they clearly state that the goal here is to define what your internal customers need to feel happy and satisfied at work. Let’s narrow down the characteristics of a positive work environment:
-Effective training and support systems
-Comfortable and productive workspacesEfficient and reliable systems
-Open and honest communication
-Fair pay and rewards Opportunities for growth and professional development
-Good work-life balanceHonest feedback and positive reinforcement
For each of the areas listed above, ask if your internal customers:
-Are happy with the way things currently are
-Have problems with the way things currently are
-Have suggestions for improvement
The feedback you receive will allow you to have a deeper understanding about what motivates and satisfies your employees.
|Organizations are increasingly aware of the value that effective feedback processes can provide, and how important it is to examine both how they give and receive feedback within the workplace. Here’s further reading to help you manage your feedback process:|
Thanks for the Feedback: The majority of books about feedback focus on how to effectively deliver feedback. In contrast, this book offers effective ways to receive, understand, and incorporate feedback to make positive changes in both your work and personal life.
Go Ahead: Ask Your Employees if They’re Happy: This article demonstrates how to ensure your employees are engaged and motivated at work by scheduling regular check-ins.
How Managers Self-Sabotage When Giving Negative Feedback: This article offers guidance on how to deliver negative feedback in a clear and direct way, while remaining respectful and considerate of an employee’s wellbeing.
Once you’ve collated the feedback from both your external and internal customers, you’ll have a clearer idea of how your current service is impacting your customers. You’ll also be more aware of specific improvements that need to be made.
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Here's what you'll find in our full Raving Fans summary :
- A business fable exploring why it's critical to turn your customers into "raving fans"
- How to apply the principles of outstanding customer service
- A range of exercises to help you transform your customers into your biggest fans