After analyzing the case study, following questions arises

How does a company like Custom Research serve its clients and make a profit? What trends in the industry at the time the case was written are important to note? What are the pros and cons of having the same person both selling a research project to a customer and actually carrying out the research? Are all their clients equally profitable? Evaluate the procedure used by Jeff Pope in dividing customers into categories of profitability. What are the problems in the way the analysis has been done? Why not keep all clients that cover direct costs? On the other hand, what are the problems associated with serving clients based on their profitability? Should Custom Research continue to serve all of its customers? If not, which customers would you suggest keeping? (How should Customer Research decide which customers to serve and which to neglect?) What criteria would you use in making this decision? In general, how would you deal with customers you don't want to keep?

Learning Objective To analyze the factors that makes clients profitable. Custom Research is considering terminating service to many clients to eliminate unprofitable work and concentrate on the more profitable client projects.

Choose or Lose
Judy Corson and Jeff Pope, cofounders of Custom Research Inc., realized they could grow their company by cutting their customer base in half. Custom Research Inc.'s bet-the-company growth strategy: cut its customer base in half Judy Corson and Jeff Pope stared in disbelief at the chart they had just made. The numbers in front of them were staggering--staggeringly bad, that is. The year was 1988. Holed up in a meeting room at the Holiday Inn across the street from their Minneapolis office, the cofounders of Custom Research Inc. had gathered in a high-stakes meeting with consultants and top CRI managers to figure out why the then 14-year-old marketing -research company had stopped growing. CRI had more customers than ever, and dozens of them were household names. The company had a manageable number of employees. But looking at the chart they had just drawn, Corson and Pope suddenly understood what was wrong. CRI had too many customers. Or too few good ones. At that meeting Corson and Pope and their team had divided CRI's customers into four categories, based on the companies' perceived value to CRI's bottom line, and plotted the customers on a chart. Only 10 of CRI's 157 customers fell into the most desirable category (bringing in a high dollar volume and a high profit margin). A whopping 101 customers contributed very little to the top or bottom line. Many, explains Pope, "weren't profitable at all when you factored in the selling costs." Corson adds, "We looked at this and said, 'Wow!" In short, CRI was spending much too much time and valuable employee resources on too many unprofitable customers. And the effect on the company's business was palpable. Corson and Pope had been so busy tracking the progress of their top customers--a group of 30 or so large companies--that they had never really ranked their 127 other customers. After all, those "second tier" companies included such big names as Texas Instruments, Harcourt Brace, and Young & Rubicam. Who would turn down business from those household names?

Promising new customers." just as employees can be. the company's new growth strategy was to turn away revenues--revenues it had come to count on. .But the chart they had drawn for themselves made clear in an instant the problem with their business. to $30 million. Sam Marcus. And it forced Pope and Corson to make a dramatic decision. By earlier this year. Doing it was another matter altogether. 56. CRI has spent years perfecting a system that gets to the heart of one-to-one marketing: the idea that you treat different customers differently. But. if customers aren't pulling their weight. 'Sam. after all that. and the company takes great pains to measure and to try to exceed customer expectations. "We know within six months if it's working. do your other clients get this nervous?" Marcus recalls." regular reviews. In fact." Slash and burn Making the decision to dramatically restructure CRI's objectives and customer base was one thing. The plan to turn customers away was a scary leap of faith. they can be effectively "fired. And the results have been staggering--but this time staggeringly good. who had become partners after leaving positions at Pillsbury. the company has more than doubled its profits. And perhaps most important. To jump-start CRI's growth. "We won't follow someone over the cliff." says Corson. "They'd ask. are eagerly screened through a series of interviews before and after they start with CRI. and Corson. had watched their business grow without much difficulty. like potential employees. they would have to systematically dump a large number of their existing customers. 55. In effect. "I reassured them the nervousness was fine. customers even face an informal version of the sixmonth review. CRI had reduced its customer base to just 78 but estimates that its revenues will be boosted by 175%. during that same period. That 1988 meeting marked the beginning of a complete overhaul of CRI's business model. In 1987. Pope. watched on the sidelines as the partners worked up the courage to change. CRI had 157 customers and nearly $11 million in revenues." Until they hit a plateau. and special perks. a New York City-based consultant who had helped coach CRI through its revelation at the Holiday Inn. and then ruthlessly screen new ones to make sure they passed muster. There are individual plans for customer "promotion.

" recalls Samantha Ball." But little by little. you don't want restrictions on what new business you can bring in.Handpicking customers was a high-stakes strategy." recalls Sack. "I had to turn him down. Anxiety levels rose.) What's more. your heart's another." Account managers were quick to make a case for why this or that customer should be excluded from the new guidelines. ready to undercut CRI's prices." recalls Pope. could CRI replace bad sales with good fast enough? Pope and Corson believed that their biggest customers "could be even bigger yet" if the sales staff were freed up to focus on those accounts. "believing in your head is one thing. a longtime account manager. Jon Palmquist. "It was greatly uncomfortable to let go of those [marginal] clients. "I noticed a stronger relationship. For one thing. they didn't mind the extra attention. who was new in sales at the time. "What if my three clients don't pan out?" More important. we can't do that. "But. At the time. at Christmas time." she says. But it was hard on everyone. "It was scary on the front line. explains the ambivalence that prevailed: "When your job is to bring in new business. It was . Small groups of employees rehearsed what they'd say to an old customer who called with one of those once-in-a-blue-moon projects. who notes that everyone was thinking. CRI began enforcing its new standards with existing customers. Senior vice-president Ginger Sack remembers how one General Mills employee routinely called once a year. it seemed as if every day another marketing-research firm was born. (That's still true today. Did the company have the credibility in the industry to pull this off? The founders calculated they'd need to reap about 20% to 30% more business from some two dozen companies to help make up for the roughly 100 customers they planned to "let go" within two years. what if big customers rejected CRI's bid to get closer? But to hear customers tell it." And there was a thornier issue: no one wanted to be the one to tell a current or potential customer "Sorry. Everyone knew CRI made little or no money on those sporadic contacts. and that there were more CRI people deployed at us. CRI had no guaranteed contracts to cushion the risk. Paring down the customer list was most difficult on salespeople who had little experience dealing with major customers.

She works in a modest office near the front doors of CRI's Minneapolis headquarters. neatly groomed redhead. they were able to focus on--and be compensated for--how well they developed the customers CRI had already carefully screened." says Robert Smith.. was slightly taken aback by that approach when he first called CRI last summer on the recommendation of a colleague. even the salespeople were relieved. Instead of beating the bushes. 'Yes. Mo. "Many vendors are happy to take on any business. I'll hear. "I'm trying to get five to six key questions answered. Rounds speaks softly and smiles easily. one that requires both diplomacy and reporting skills. Michael Henderson. Pope. after playing an unofficial gatekeeping role--along with Corson. A petite. It's a delicate balancing act. was appointed to her current position in 1996. and others-for several years. but Rounds is no pushover. Anxious would-be customers have to pass Rounds's entrance exam to learn whether CRI will consider taking them on. The gatekeeper Forty-six-year-old Beth Rounds doesn't look particularly powerful. a senior marketing-research analyst at American Century Investments. But Rounds plays one of the most important roles in the company: screening new customer leads and rejecting those that she thinks fall short of CRI's profitability goals." he recalls. a mutual-fund company based in Kansas City. to $16 million--up 45% over 1987's figure. Her questions are simple. "There was a very candid emphasis on taking on larger business. gulp. that sounds right.' or. CRI had successfully overhauled its system. Rounds tries to get crucial information from the prospect right away. and there was an impressive leap in sales. When a new query comes in. By 1992. who was then a director of marketing research at Dow Brands and is now at Maytag Corp. She estimates that she rejects roughly 90% of all potential customers' queries that come in over the transom. "I ballpark the budget for a project and ask if that sounds right.impressive. Such glowing customer reviews began to translate into increased sales and profits in 1989." Rounds. She is the gatekeeper. a 20-year veteran of CRI." she explains. Over time. 'That's our yearly .

The hurdle keeps going up." Making the Rounds cut is a big deal for prospective customers." She maintains a short list of respected (indirect) competitors to whom she can refer rejected prospects. and the competitive nature of that business. CRI's sales criteria for first-year accounts. who started at CRI in 1980 as a telephone interviewer. the 33-year-old account manager possesses the kind of disarming charm they can't teach at the Dale Carnegie school. Welcome to CRI's freshman class. a "find"--a loyal employee who over the past eight years has worked her way up from a position as a research assistant. At once enthusiastic and thoughtful. are "much higher than when I first started in sales four years ago. Rounds estimates that of the 20 to 30 such callers she talks with a month. "But 99% understand what we're trying to do. Gudding is. "When I explain CRI and how we do things." That means she must be ever more diligent in scoping out which of her freshmen have the potential to go all the way--to second-year "sophomore" status and eventually to "core" partner. they are fed into a CRI system tailored to serve their individual needs. the client's business." Rounds continues. only 2 or 3 are bona fide leads.budget!' In the end I know what the customer's story is and if they're buying what we're selling." says Samantha Ball. "You learn not only a function but also about the client. Once they do. A few dejected callers respond with the question "What's the matter--don't you need business?" Rounds reports. making her a de facto "help desk" for the industry. notes Gudding. where knowledge about customers is a currency more highly valued than product knowledge or even technical expertise. as they say. many take themselves out of the running. . "That makes it easy to make referrals. The freshman class Lisa Gudding is the very picture of a rising young sales star. Today part of her sales role is to help freshman customers find their way up the organizational ladder as well. "I never knew I could love work so much." she says. Making such assessments is part of everyone's job at CRI.

" she says--even if that means taking herself off the account." says executive vice-president Jan Elsesser. who oversees the drive to grow new and current accounts. The account teams price all projects and put the kibosh on unprofitable-sounding ones. That "freshman" looked promising indeed. she's working on it-researching the prospective customer's company. That meeting is followed by a letter from a CRI senior executive summing up the customer's stated expectations for the project. so good. its industry. 'Honestly. That way not only is it less tempting for a team to accept questionable customers. before the first project even begins. But once prospects pass the team test. typically handling anywhere from one to five major customers. she's already thinking about which combination of CRI people would be the best fit for the account." says Corson. and the background of the individuals involved. where he gave Gudding an indication of how much business CRI stood to gain. Earlier this year Rounds gave Gudding a lead regarding American Century Investments. . I don't think we can do this. it's nearly impossible for it to do so. uncovering what was lacking in the customer's dealings with other marketresearch firms and thus finding out where the real opportunity lies for CRI. "We do this initial interview with every new client. She plays the role of a reporter. In most cases. they are quickly lavished with attention. focuses on growing the business from its existing accounts. A dream team of your own Once a potential customer has passed muster with Rounds and Gudding (or one of eight other account managers). the customer receives a phone call or visit from one of CRI's four most senior executives. "We're able to say. she's a matchmaker. In the earliest face-to-face meetings with a potential customer.From the moment Gudding receives a lead from Rounds. "There's a conscious attempt to match personalities. Gudding was clearly the right salesperson--her banking-industry experience allowed her to establish a quick rapport with the financial-services firm. it must also be approved by one of CRI's nine account teams. Each team. ACI's Michael Henderson agreed to a meeting in Minneapolis. But even more. So far.

but we do have a sense of who has the most potential. Today just 36 companies provide 86% of CRI's sales and 96% of its profits. "Jan explained CRI's philosophy [of focusing on fewer customers]. and Anderson is planning to send some of his own staff to CRI to attend training classes. to date. "You learn to think like them and to know their culture." In turn. to keep the pipeline flowing. it is in for the RollsRoyce treatment. has given CRI three projects in quick succession). have the potential to double the sales they bring CRI. And CRI employees try to treat those 36 as if their world revolved around each one of them. . Top freshmen. If not--unless there is some compelling reason to keep the account--CRI prepares to cut bait." A sophomore is expected to show real growth in sales and profits by year two. one of ACI's senior marketing analysts. the staff can quickly tell who will drop out the first year and who will go on to join the sophomore class." says Murray. You want to feel as if you've got some clout. calls it." explains Elsesser." explains Corson. she says. "and we've talked to them about that. director of marketing research for Pillsbury Brands. "Flawless execution" is what Robert Anderson. "We don't intentionally rank the freshmen. Angela Murray. It's a small group: the company needs only half-dozen or so new customers a year. was happy to set up the conference call. Because it does. the team that is assigned to the new customer uses the interview to form its own plan for meeting--or even exceeding--expectations for the project. each worth an average of about $200. Pillsbury--which has stepped up its work with CRI in recent months--has gone so far as to set up work space for CRI's "platinum team" in a Pillsbury building. If a customer makes it through sophomore year. A variety of team members--not just the account managers and project managers--spend time visiting new customers to hear about their particular quirks and needs. Elsesser chatted with several marketing-research analysts at ACI (which.Not long ago. from designing the study to presenting the results. Because CRI spends so much time with its freshmen. and that was appealing to me.000. "We talked broadly about my relationships with other research firms and how we can do things differently.

That's an added value because we're so busy around here. interviewing customers. sometimes in response to a demand." she explains. is a leader of the "pink team"--the team devoted solely to Procter & Gamble. In fact. a research supervisor on the Pringles brand. Everyone gets the [profit-and-loss statement]. "[CRI takes] the initiative. Palmquist isn't assigned to any particular team. Palmquist has become the ultimate sales sleuth--combing through project notes. while sales with P&G have increased about a hundredfold. CRI is now a P&G "approved vendor." with direct access to P&G's internal E-mail system and research database. sitting in on team planning meetings. In fact.The partner principle Ginger Sack." she says. "Other suppliers wait for you to call them." explains Sack. Her sales territory: unlimited." Surprise and delight How does CRI constantly know when and how to take that initiative with customers? Through the help of staffers like Jon Palmquist." says Leanne Schimpf." . and you can capitalize on what they need. "I get ideas from our [core] partners. She considers CRI to be on an equal footing with P&G's own internal research group. she worries about all of CRI's customers. sometimes a little ahead of when they need it. That's one of the perks of becoming one of CRI's core partners: you become a really big fish in a small pond. "You understand their business. a gregarious woman known for holding planning sessions at amusement parks. some people at P&G say they couldn't function without CRI. It's her job to find and develop new products for current customers---sometimes before the customers even know they need the products." In 1988. "Our job as a team is to bring the client forward. "The whole team is focused on getting new business. and reading between the lines. who is now a senior vice-president and manager of new-product development. Today the team has swelled to 12. "I've been working with them on everything I do. there were three people on the Procter & Gamble team doing limited work.

One lucky customer doesn't know it yet. "Thank God for CRI.In short. "There's an ebb and flow to this. For example. CRI's 17 senior vice-presidents conduct some 30 to 50 one-on-one interviews with customer contacts. Corson points out. CRI took a sales hit of about $2 million in 1993. all Surprise and Delight plans undergo another revision after the company's ambitious annual review of all its core partners and a few strategic freshmen. vice-president of consumer research for ConAgra Frozen Foods. Of course. "I get FedEx packages with malt balls for my birthday and candy bars slipped into a proposal because they know I like chocolate. Pope says. "This is a huge client. CRI doesn't have "marketing people" or a marketing plan. but it's all clients specific--another tenet of one-to-one marketing. At year's end. Still. and I know the senior managers will appreciate it. compliments of CRI. the loss of any VIP customer hurts--a lot. the "red team" was so disastrous that it was disbanded after finishing a year in--you guessed it--the red. Since it has been instituted. The teams prepare the plans." Jennifer Merrill." notes Corson. he wrote the company. when you're focusing on 36 major customers "rather than 150. The review is both CRI's report card and an industry snapshot. "It was pretty staggering. with Palmquist often weighing in. formerly of Dow Brands. the company has 36 individual "Surprise and Delight" plans." she says." But CRI is always trying to up the ante. who recently lost Dow Brands when . For example. "It's our marketing research. one for each major customer. laughs as she recalls some of the little perks she enjoys. Some clients--like Ford Motor Co. Instead." recalls Robert Smith. there have been glitches. Such perks are all part of the company's strategy for success. "Every quarter CRI would send us a list of value-added activities they would have charged another client for that wasn't a partner. learning about the needs of individual customers is a lot easier. which are reviewed and amended every quarter. after Northwest Airlines grounded its research work with the company." notes manager Pat Hughes." After one project. but it's about to receive some custom software.--never did make it to partner status despite great expectations. the system has not produced glowing success stories all the time." says Corson. Furthermore.

But that hole was soon filled--by a former customer who came back to CRI. Now the teams view customers not as a onetime hit or miss but as part of a continuing cycle. CRI gave Pillsbury a brand-new page in the customer book and had the same high hopes for the account it has for every hot freshman. "Now why would I want to do that?" she asks. where CRI team members can be found in the hallways and in research-project meetings." says Pillsbury's Robert Anderson. Corson takes delight in a call she knows she will receive. with approximately 130 employees. "It's already begun paying off. Pillsbury officially joined CRI's freshman class earlier this year. Like clockwork. And it should. Both sides spent long hours interviewing one another before deciding to advance their renewed relationship to the partner stage. CRI employees are contributing to the intellectual capital at Pillsbury.the company was sold. revenues per employee have doubled. the lifetime value of her customers is "infinite. He adds. "It's a learning curve we're both on. The way Corson looks at it. a yellow pages salesperson tries to get her to take out a bigger ad. At the same time. "They understand they'll get a significant amount of our spending." Even those customers that don't pan out the first time are never written off: they could be future prospects. Pillsbury is a good case in point. With 50% fewer customers than it had a decade ago--and with 50% more employees--CRI can afford to devote more attention to each customer. It's no wonder CRI does very little advertising anymore. Anderson attests. that ratio is nearly reversed. One of those questionable accounts 10 years ago. Corson's reply is always the same. Every year now. Ten years ago. the ratio of employees to customers was about one to two. . today." In return." What has given CRI the confidence to break so many of the old marketing rules? It's simple: the company understands its customers much better now.

CRI calculated the profit for each one by subtracting all direct costs and selling expenses from the total revenues brought into CRI by that customer for the year. HIGH/HIGH At the top: These were customers who had pared down their suppliers and clearly valued an ongoing relationship with CRI. They accounted for 29% of sales. The other half were right on the line--on the verge of high/high. LOW/LOW CRI once believed it could make many of these customers more loyal. LOW/HIGH These were small customers who were very profitable. 1987 High Volume Low Margin 11 customers Low Volume Low Margin 101 customers High Volume High Margin 10 customers Low Volume High Margin 35 customers HIGH/LOW About half these customers were new ones that CRI figured would become more profitable over time.Life on the Quad: The Quadrant Analysis How CRI did it: In assessing which customers to keep. (Think of it this way: What costs would you not incur if this customer went away?) The cutoff points for "high" and "low" scores were purely subjective--they corresponded to CRI's goals for profit volume and profit margin. but time revealed that this group wanted to work with various suppliers. Was there more potential for sales? .

232 $156. Be creative. 3.232 $14. exclusive product offers. So you need a ranking system. Sounds simple--but it's not." You probably don't have enough data to calculate the "lifetime value" of each of your customers.320 $174. At first glance Customer A appears to be more valuable. and so forth--that matter to you. Not all customers are equal. if you sell retail or through distributors. and so forth. for example. However.000 $113. you can prioritize your time. Customer B racked up far lower direct costs and a third of Customer A's selling expenses. CUSTOMER A CUSTOMER B Revenues Direct costs Selling costs Profit* $203. Resources 1. repeat business. Differentiate your customers. 2. the authors recommend you score your customers on any number of variables--gross margins.A Tale of Two Customers Below is a comparison of two of CRI's "representative customers" in 1987. Identify your customers. But during the course of the year. making it more than twice as profitable as Customer A. Never mind trying to calculate the "net present value of all future profits. frequent-buyer discounts.856 $14.162 $3.718 25% Profit margin 7% *Also known as "contribution margin. Once you've ranked your customers.120 $39. Interact with customers one-on-one. customers are often willing to divulge personal information in return for better service." or what's left over to help cover the company's overhead and contribute to profits. Instead. referrals. spending lots more of it on your most valuable .

What kind of work is it (in terms of industry or scope)? More than anything. . customers may be more willing to share their purchasing plans and make you part of the process.customers. they have no reason to use us over anyone else. CRI's chief gatekeeper and reporter-in-residence. committee-style decisions. Rounds refers the caller to an indirect competitor. Customize each customer's experience with you." A good answer: "A colleague of mine worked with you at another company." 2." 1." says Beth Rounds. How did you hear about us? A bad answer: "I found you in the yellow pages. In return. "So it's a crucial question. 3. CRI doesn't ask this question so it can decide how to divvy up the marketing dollars. Sometimes I explain why I'm asking the question. for anyone looking for a systematic way to rate over-thetransom sales prospects. This step takes many different forms--from writing separate marketing plans for each of your top customers (like CRI's "Surprise and Delight" plans) to mass customizing the whole production line. And she assiduously avoids getting involved in anything that smells like a bidding war. 4. 4." Unlike many companies. that question reveals whether the caller is trying to price a quick. "I backtrack a lot. If so. onetime project or one that's totally outside CRI's realm." Nevertheless. "If someone finds us in the yellow pages. She's interested in callers who have some level of decision-making power. Screening Prospects: Six Questions "You can't just ask the questions." CRI cofounder Judy Corson explains. What are your decision criteria? Rounds knows that CRI doesn't fare well in blind bidding or in drawn-out. but Rounds often makes a ballpark guess on the project--and then gauges the prospect's response. this is a good "script. What's your budget? That's akin to asking someone how much money he or she makes.

" Rounds reports that each month only 2 or 3 of 20 to 30 callers answer enough questions correctly to warrant more attention..5. Why are you thinking of switching? "There's a two-edged sword here. "Clients that are hard to break into are better because they don't switch too easily. But you need a way to get in--so a legitimate need for a new supplier is OK.You never know where people will go." she says. and Burke Marketing Research.. So why spend time with the rest? "It fits well with who CRI is." explains cofounder Jeff Pope." . 6. a half-dozen large companies such as the M/A/R/C Group. "Do unto others.. Whom are we competing against for your business? Rounds is happiest when she hears the names of CRI's chief rivals. Market Facts.

a team. Together. and service businesses. a flat organizational structure helps make executives immediately accessible to employees. leverages an intensive focus on customer satisfaction. and gains in productivity. . and suppliers. is responsible for crafting CRI's goals and strategies and views customer loyalty as the firm's most valuable business asset. composed of partners Judith S. sales volume. when CRI adopted its highly focused customer-as-partner approach. The firm credits a reputation for quality for making it one of only a handful of companies that has remained independent while growing over the past two decades. Since 1988. (CRI). these systems help set the course for CRI efforts to meet or exceed customer expectations that can serve as a model for other professional services firms. Pope and two executive vice presidents. customers. With all CRI employees as members of customer-focused teams. Corson and Jeffrey L. team. medical.oriented workforce. The bulk of its projects assist clients with new product development in consumer. Custom Research Inc. and individual performance.Custom Research Inc. and profits have outpaced industry averages. a national marketing research firm. client satisfaction has risen from already high levels. Revenues of more than $21 million in 1996 place CRI among the 40 largest firms in the highly fragmented. and monitoring each facet of company.$4 billion marketing research industry that is characterized by low entry costs and tough competition. A QUICK LOOK Founded in 1974 and based in Minneapolis. soliciting customer feedback. Well-developed systems are in place for understanding customer expectations. CRI's steering committee. and information technology advances to pursue old-fashioned ends: individualized service and satisfied customers. privately owned CRI conducts survey marketing research for a wide range of firms.

Besides its Minneapolis headquarters. All CRI teams have the same goal of "surprising and delighting" their clients.. on budget. CRI senior management aimed for a new level of consistency and competence in delivering quality services by organizing. Quarterly. requirements. The company was reorganized to make maximum use of customer-focused teams and to merge support departments in order to reduce cycle time a growing client priority. down from 138 clients in 1988. N. repeat customers. the number of larger clients during this period increased from 25 to 34. criteria defining these requirements are determined in consultation with clients when CRI executives and project team leaders interview clients and they do that extensively. Surprising & delighting the customers In recent years. which then tie to the goals for each work unit. and Madison. processes. In 1995. This emphasis on large accounts has paid off with a doubling in revenues. Wis. Quality at CRI is client driven the center of the Star and is integrated into the company's business system as captured by the five key business drivers that are the points of the star: people. account teams review with the steering committee the business plans and results for each . Choosing in 1988 to concentrate its business on high-volume. the firm has electronically linked offices in San Francisco and Ridgewood. CRI's steering committee distilled requirements for each research project to four essentials: accurate. CRI captures the essence of this goal in its Staricon.. most of whom are cross-trained to create the flexibility needed to accommodate the demands and schedules of research projects. Minn. Before the first survey data are collected. on time. and measuring quality.J. as well as telephone interviewing centers in St. the steering committee annually sets corporate goals for the company. and results. It employs approximately 100 full-time staff members. achieved without increasing staff size. CRI's clients numbered 67. Paul. systematizing. With extensive employee involvement. and meeting or exceeding client expectations. CRI has reduced the number of clients it serves. relationships.

clients are surveyed to solicit an overall satisfaction rating based on the customers' expectations. CRI developed and heavily uses a project implementation manual for interviewing. they view continuous improvement as part of their jobs. Internal "project quality recap" reports completed for every study track errors in any step of the project flow. the process for handling it flows through essentially the same steps across all projects. Internally. CRI measures the accuracy of results and the quality of personal and telephone interviewing. For example." At CRI. . end-of-project evaluations also are conducted for CRI support teams and key suppliers. over the last several years ratings for interviewers show sustained average quality scores of approximately 95 points out of 100. On the "high touch" side.client. Most professional services firms believe their services cannot be "standardized. and a peer-review system for evaluating personal performance serve to reinforce worker commitment to continuous improvement. measurable processes. and individual goals. CRI uses its flat organizational structure and relatively small size to assure that information flows freely within the company. bonuses based on achievement of corporate. while each project is customdesigned. Each month the results of the client feedback are summarized and distributed to all employees. People Make the Difference CRI uses a "high tech-high touch" approach to satisfying customers. Just as importantly. up from 83 points in 1990. A variety of recognition programs. Staff members are surveyed annually. team. giving CRI senior managers specific feedback. Meeting customer-specified requirements depends on efficient execution of welldocumented. for example. Customers have ample opportunity to advice and critique CRI. are evaluated on performance and contribute ideas for improving the quality of their service. At the end of each project. Personal interviewing contractors.

and analysis. A Technology-Driven Approach The "high tech" component to CRI's business is reflected by its alertness to technological opportunities to improve its performance or to devise new services that respond to customer needs. used to align individual training with business and quality goals. in the use of computers to assist in telephone interviewing. onthe-job reviews. Since 1988. for example. and employee surveys. generate a variety of business benefits. data collection. "Managing work through technology-driven processes" is one of CRI's key business drivers. and generate report-ready tables for the final report and presentation. In 1996. the average CRI employee received over 134 hours of training. performance reviews. interviewer monitoring. CRI views its major software supplier as a key partner. All new employees receive company-wide and job-specific training that addresses quality and service issues. feedback from clients on each of its . CRI led. Each employee has a development plan. which.CRI has a company-wide education plan. display them in tabular format. control the sampling and autodialing for interviewing. The use of computers has reduced cycle time for just one of these steps tabulating data from two weeks to a single day. CRI development plans. in turn. CRI's education plan. Software enables CRI to use technology to integrate all stages of a project: produce a questionnaire for computer-assisted interviewing. CRI bases company-wide training requirements on client feedback. edit and then tabulate the answers from the questionnaires. These and other quality-promoting actions including an unconditional satisfaction guarantee aim to build client confidence and loyalty. The long-standing relationship extends to annual planning sessions during which CRI shares its goals and the two firms determine how the software maker can contribute to meeting goals. which sets annual and long-term goals for improvement and helps to identify training needs.

Seventy percent of its clients say the company exceeds expectations. CRI is now "meeting or exceeding" clients' expectations on 97 percent of its projects." . CRI is rated by 92 percent of its clients as "better than competition" on the key dimension of "overall level of service.projects shows steadily improved overall project performance.

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