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3. Voice of the Customer Research Helps You Position Your Offering to Resonate With Your Best Customers. Just imagine the difference in effectiveness of your sales and marketing program in strategy execution if it spoke directly to the customer about what appealed to them, making it clear you understood why they could be interested in what you had to offer.
To see how Voice of the Customer (VoC) research influenced positioning to help these three companies connect with their customers, scroll on down. In each case the customer relationship strategy reinforced what the customers thought—appealing directly to what they cared about. We’d done the work for successful positioning. One piece of work we had not done was the work to evaluate the strategy in advance of investment. That came later. But what happened with the Fireman’s Fund project was a stimulus. It was killed before it could begin because our client within the company could not justify the effort to management. Now we could have helped her. With our probabilistic strategy decision model we quantify the current situation and consider alternatives. By modeling alternative strategies—in advance of developing the tactics—to evaluate likely profitability, strategies and their supporting tactical plans can be adjusted until profit is more assured. Customer Lifetime Value (CLV) is used to look at the anticipated profit-per-customer for the big picture. CLV and profit flows for new and existing customers are calculated in the models. Then the best strategy, in line with the company’s directional strategy and goals, can be chosen. In execution we track the results in real time. The discipline of a model achieves consistent metrics that can be rolled up to give executives a cohesive framework across the company to compare potential and performance against plan. It is the cornerstone of cohesive operational control of customer activities across Acquisition, Closing, and Retention. FIREMAN’S FUND INSURANCE We knew the economic message of fighting fraud, particularly the results, was critical to communicate. It was the essence of what Fireman’s Fund was selling, their Value Proposition, but the case had to be built for that. Fireman’s Fund did know how to save money by fighting fraud and was ready to sell that expertise to smaller companies. The economic message was valid, but it would take a couple of years to prove that it would work equally well for smaller companies. The smaller companies just didn’t believe that it would be possible to fight fraud economically. That left the moral message as the strongest story to tell–that fighting fraud was the right thing to do. That’s how our client interpreted the moral message. But our Voice of the Customer in-depth interviews with the smaller companies’ executives uncovered a different twist to the moral message. It wasn’t that it was “the right thing to do.” They were fed up with being cheated. They felt that enough was enough. They were ready to fight. We could support that fight. Our Positioning Line reflected that appeal: “The Strength to Fight Back.” It played to Fireman’s Fund’s clout and told the moral story from the customer’s perspective. Supporting statements covered the other Key Messages and the Value Proposition.
To underscore the economics message, building the case for the future, we planned a series of tactics including a savings guestimator, tips on how to get the results that Fireman’s Fund had, and working sessions with small insurance company executives. Economics would ultimately be the major appeal, but it needed to be proven. The emotional appeal of fighting back with a strong partner would get more attention and have immediate credibility. It was the better positioning. Strategically, we lent our support to the customer. With our tactics we would be demonstrating value.
AT&T MICROELECTRONICS “Partners in a New Generation of Technology,” giving credit to their new customers for the application expertise they definitely had over AT&T Microelectronics. It worked. They booked over $2M in new ASIC orders in less than eight weeks in a down market. In fact, it worked so well in Silicon Valley that it became the positioning line for ASICs around the world for a decade. It was also the forerunner to their strategic alliance marketing strategy as they built their non-captive integrated circuit manufacturing business base. The strategy and tactics reflected their partnership approach, honoring the other party. In each part of the world, the central graphic was an illustration that melded integrated circuit technology into the major attractions in that location. For example, in Japan the rising sun was a wafer, in Spain the tiles were chips, and in Silicon Valley the roots of a Monterey Cyprus looked like gates. Similar graphics illustrated marketing materials in London, Munich, Milan, Singapore, and Taiwan. They looked like they were serious about this market in giving this much attention and respect to their customers. Strategically, they were among the first companies to talk about partnership; they honored their customers. It was easy to show the value of AT&T Microelectronics’ proven technology in our materials. But we didn’t lead with it.
BROWN AND CALDWELL Our Voice of the Customer research brought out a hint, a glimmer. We started with in-depth interviews for direction and then expanded to a quantitative study. There was a slight trend in Texas suggesting that they were sick of the by-the-book approaches the EPA demanded. Perhaps a more reasoned, common-sense approach to cleanup would be appealing. We exploited it in our strategy, without taking the EPA on directly—that would have been sacrilege. Instead, we focused on a Brown and Caldwell strength—value-for-the-dollar spent—while still cleaning up the environment. Firms following EPA’s “book” literally couldn’t deliver both. The EPA’s approach cost a lot and didn’t get much cleanup done. We traded on Brown and Caldwell’s customers’ perception that Brown and Caldwell provided value and did projects that worked. A negative, no EPA experience, had just become a positive differentiating factor. We carried the value message into all their materials and ads and played up another important message: Integration. What was done in one area might bring value in another. At the time, this was a rather complicated notion. So we spelled it out, educating the audience while differentiating Brown and Caldwell. And finally, our Positioning Line was “Improving environmental quality for over 40 years.” The line implied that all the work they had done in water and wastewater was environmental, and that their track record in that area, counted here. Today, that is how the industry is defined and integrated services are a given. Strategically, we had essentially discounted the competition’s strength of EPA experience and played to an emerging customer need. While we could have used the value appeal in our Positioning Line, making their track record count was more important for them to be considered a player. The Positioning Line can only do one thing well, so we assured their customers Brown and Caldwell was a safe, acceptable choice. Our campaign worked because Brown and Caldwell looked at it as an investment and spent enough time, money and tactics to shout loud enough to redefine the entire industry and get their value message out. They were not alone in doing that, but certainly were at the beginning of a trend. They derived the benefits of being among the first to say what others were starting to think. They grew from $50M to $100M in revenue in three years in the midst of a recession and at triple the growth rate of their competitors who had been in the market segment longer. Positioning Links VoC Research to Strategy Execution. Directional Strategy: Whether for the company as a whole or for a business unit, the directional strategy makes explicit what business you are in, what your brand stands for, what your promise is to customers, what you are offering, how you are creating it, and how you are promoting and delivering it to customers. At the core is positioning—of the company, its capabilities, its products and services in relationship to the competition. Customer Relationship Strategy: Underlying the directional strategy is a customer relationship strategy for each channel/product group combination—the smallest unit for effective action, and where relationships are made. This strategy ties the customer relationship to profit and focuses on retention. At its core is positioning, this time in terms of the customer relationship and what appeals to the customer the most. Positioning: A traditional positioning line highlights only what is most likely to appeal to the contacts about the offering to acquire them as customers. With the heightened interest in customer retention, positioning lines may also highlight what is most likely to keep them as customers. This means that there may be different positioning lines for acquisition and for retention when what appeals to people in deciding to become a customer is different from what retains them. What appeals to them comes from Voice of the Customer research. Value Proposition: The value proposition is the reason or attribute that explains why your company thinks the customer should value your offering. It probably describes why your customers stay, but it is not necessarily the reason they become customers in the first place. If you’re lucky, the reason they should buy is the same as why they do buy, or what appeals to them most is what they should value. In our experience, this rarely happens, which argues for different positioning lines, depending upon what you are trying to accomplish and whether you are marketing to new or existing customers. If you make considerable effort to educate customers about your value proposition and something else is still more appealing to them and is the reason they stay with you, you may want to consider changing in your own mind what your value proposition is! Customers will have spoken. Key Messages: Like the value proposition, key messages are derived from your company’s attributes. They should be the most compelling, powerful and important messages about what appeals to your customers and what you think they need to know to act. A minimum of three and a maximum of eight simple messages is what we recommend. When your value proposition needs to be explained, the key messages should include information that may lead the customer to understand your value proposition. Over time as you promote these messages, it is possible for the value proposition to become the reason customers become customers, if it isn’t to begin with. We’ve seen that happen. Supporting Facts: To lend credibility and proof of your ability to deliver what you promise, take a look at how strong the proof is for what you want to say. Is it accurate, is relevant, and are you vulnerable in any way? How will it play in the marketplace? It pays to solicit facts to back up the positioning and messaging from all parts of your business as a double check that everyone in your business is aligned to deliver. In the previous example, AT&T Microelectronics had a directional strategy to meet a business goal of more profit by entering the public marketplace for high-margin Application Specific Integrated Circuits (ASIC) with their proven technology. The proven technology was their value proposition. But it was not enough for potential customers to want to do business with them. The customers wanted acknowledgement for the application knowledge they brought to the table and to partner. By listening to potential customers, AT&T realized that they needed to establish design centers around the world near to the customers they wanted to serve and that their customer relationship strategy should be to partner with their customers. Hence, the positioning: Partners in a New Generation of Technology. That decision to reinforce what the customers thought—appealing directly to what they cared about—was worth more than a billion dollars. Positioning Analysis Approaches.
We fill in the two outer columns of the table in collaboration with management and a cross-functional team with their perception of the company’s attributes as you see in the example for a non-profit organization whose industry was undergoing massive change. The middle column is completed as part of the analysis of the Voice of the Customer research. From these attributes, the value proposition and key messages are derived. It is a simple way to compare what people in your organization think about why the customer should care with what top priority customers tell us. It is a good way to clarify the issues and build consensus. (Our alignment reality check is another consensus builder.) Another approach to positioning analysis takes the previous approach further. We look at what the competition says about itself to derive their value proposition and key messages and work with our client’s management and a cross-functional team to do the same for our client. Then we conduct the Voice of the Customer research to confirm or refute the suppositions. The analysis shows what the market openings are, or are not, by comparing your customers’ perspective of your and your competitors’ value proposition and key messages.
What Appeals Attracts; Value Retains.
While doing a positioning analysis with either approach for your top priority customers is critical to developing a successful customer relationship strategy to reach those with high profit potential, you could do an analysis for all customer segments, as you could for each stakeholder audience you may be trying to reach like employees, alliance partners/vendors, stockholders, the media, analysts, and the community. If you need to do that, we suggest charting the value proposition and key messages against the audiences to see common ground and to see where your priorities need to be. Once the value proposition and key messages are agreed upon, we suggest mining the Voice of the Customer interviews to craft customer testimonials that express what you want to communicate in the customers’ own words. |
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