It's true that the more you know about your customer the better off you are. And customer relationship management (CRM) software and other technologies certainly help us get closer to the customer, collect more detailed information, and segment customers into more useful and practical groupings. With today's technologies companies can collect, store, and retrieve a variety of types of information - where the customer lives, the size of his or her family, income range, ethnicity, even hair color.

But the truth is, no matter how sophisticated the CRM system, to be able to continue to provide top-quality service to customers, companies need to know not only who the customer is in as much detail as possible, but how well the customer was treated in his or her last transaction.

Any type of customer information is important and can be useful, says Rich Hanks, President of Mindshare Technologies, a provider of customer feedback services. Butt many customer feedback and customer database strategies get too caught up in the details.

The trick is to prioritize, to go after the type of information that is going to be most useful both for market research, and in terms of practical value to the frontline manager. And in general, practical value should win out. For instance, says Hanks, "If you give me my choice between a huge demographics-oriented market research questionnaire or a question like, 'Was the bathroom clean in the restaurant?' I would much prefer `Was the bathroom clean in the restaurant?' because you can do something about that right now, and it will influence the repeat buy and the loyalty of the customer."

What else should you focus on when you ask customers for feedback? Here are some suggestions from Hanks and from John Sperry, Mindshare's CEO, on how to get useful, useable information through customer feedback. Focus on process questions"In the course of 20-25 questions that we might ask in a typical Customer feedback survey, we will ask a few general satisfaction questions and a few market research type questions," says Hanks, "but the majority of questions will be looking for specific feedback on product, service, friendliness, and how well we did at each step of the customer interaction."

For instance: "We ask all of the traditional questions about behavior, loyalty, and brand, and we want to know if they are going to come back and if they are going to tell their friends. And if you are a first-time customer, we want to know what drove you there," says Hanks.

"But each of those takes a backseat to 'Were you greeted in a friendly way'?' or if it's a restaurant, `Did the manager visit your table?' If it's a call center, `Was the rep on the phone empowered to make a decision'?' Market research and demographic types of questions can be asked to some extent, but operations improvement questions should be required - so that every customer can provide feedback on his or her specific experience."

Get feedback from everyone, and respond to all feedbackAnother issue that companies often face when seeking customer feedback is whether they are getting a statistically valid sample of their customer population. Mindshare's answer to this question is that companies should get feedback from everyone. Or at least to give every customer the opportunity to provide feedback after every contact or transaction either through a website or an interactive voice response (IVR) system.

In a restaurant, for example, the invitation to provide feedback would appear prominently on the customer's receipt. In a hospital it might be on a big poster in the emergency room. In a call center, the customer might be invited to stay on the line after completing his or her transaction to complete an automated survey.

Sperry adds that by getting feedback from everyone, and taking action whenever a customer has a bad experience, you're working to create a more loyal customer base, and that should be the point of any customer feedback strategy rather than simply to collect demographic information. "The interesting thing, when you approach feedback from the operational side, is if a customer says that he or she is upset, there doesn't have to be any more statistical sampling. If I've had a bad experience, it needs to be corrected," he says.

"Your system also has to be able to drive corrective action," says Sperry. "It has to be able to close the loop when some kind of an incident has been opened up." III fact, the Mindshare system sends an "Alert" to frontline managers whenever it receives a record of a bad experience from a customer. And the Alert stays open until the manager indicates that he has called the customer and resolved the issue, thereby "closing the accountability loop at the local level," says Sperry.

Hanks adds: "An Alert is thought of as an individual incident opened up in the system, and that Alert will include all of the information necessary to resolve the issue. It will even include the customer's verbatims so these can be used to coach employees. There's nothing more frustrating to a manager than to be told they have a problem and not give them the information or tools they need to fix it."

Use feedback to drive actionNegative feedback from customers should also be rolled back into training and coaching efforts on the operational level. Rich uses the analogy of "lather, rinse, repeat," where "you are constantly learning things from your customers, taking those things and addressing them through your employee training exercises, and pushing that out to your employee base to put into effect. Then you collect some more feedback and do it over again."

Managers can also use the verbatims in group coaching, reading them or playing them for staff meetings to discuss strategies for dealing with the issue in the future.

Positive verbatims can also be used for recognition purposes, Hanks says: "For instance, you might get one that says, 'George was a great help and took care of my problem in one call. He explained everything in terms I could understand, and I think George should get a raise.' Play that in front of George's peers and suddenly George is a lot more loyal employee."

Sperry adds: "Sometimes we put together an executive CD compiling customer comments. That way you've got the executive team listening to the whole gamut of customer comments - from positive to negative to product recommendations to silly things that the customers feel about the way things are done.

It gets them thinking from the customer's perspective. Instead of guessing what the customer is thinking, top executives can listen for 20 to 30 minutes each day as they're driving in to work in the morning and be directly in tune with the customer."