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Voice of the Customer (VoC) research that asks WHY is coming into its own—especially so in high-value business-to-business sales and marketing, our primary focus. It has always been important to know the answer to WHY. Now that the power of the Internet has transformed how business is done and leveled the technological playing field, it is more important than ever. Without Voice of the Customer research to answer WHY, you may never understand what hit you when
Asking top priority customers WHY in in-depth, one-on-one Voice of the Customer interviews brings more nuance, meaning, and intelligence to WHAT you are selling, WHO you are selling it to, and HOW you deliver what you sell. Voice of the Customer research augments traditional research in product/service development, market assessment, process improvement, customer satisfaction, and customer feedback tracking to make it more actionable, powerful, and relevant. Through the Religence Framework for Customer Relationship Intelligence (CRI), Voice of the Customer feedback is linked to strategy execution and operational results in our operational CRI tracking system. The following table summarizes how Voice of the Customer is changing traditional research and what's next. You can scroll down to an in-depth discussion. There are also links to more on the topic in our extensive Religence Framework CRI Reference Section including
Another excellent resource is our CEO's new book Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing, which explains how to build Voice of the Customer research into our operational CRI tracking system.
Research like this for breakthrough innovation is useful not only in manufacturing, but in services as well. As good as this sounds, research like this is fairly rare in product/service development these days. More typically, the research supports incremental improvements or modifications. The majority of the time for manufacturers—and especially for technology companies—the specifications are driven by engineering in a "faster, better, smaller, cheaper" mentality. In a competitive environment where technology has largely been commoditized, they need to keep a constant stream of "new" products. To make that happen, typically the product development effort is focused on making only minor changes to what a company has today, either by extending the line or by adopting next-generation technology into existing products. Typically, it is after those requirements are set that customer feedback, primarily from customer complaint records, is considered. In our experience, the customer feedback and requests from marketing account for about 10 percent of the requirements and is solicited at the end of the process, not at the beginning, by engineering. Incremental approaches affect services as well. Here are three examples of what we see happening:
WHAT'S CHANGING: With the customer relationship recognized as a key component of the value proposition, product/service development people at cutting-edge companies are doing more than looking at customer complaints and customer suggestions. They are designing opportunities for continuing positive customer interactions right into their products and services as the next technological innovation. They want to augment the sales and marketing process to keep a relationship—a connection—going after the sale. Now for them the customer relationship replaces technology as the source of competitive advantage. To help them identify the right opportunities to establish ongoing customer feedback, we use Voice of the Customer one-on-one in-depth interviews with top priority customers. WHAT'S NEXT: Later in strategy execution with the Religence Framework for Customer Relationship Intelligence, we help track customer interactions including this new customer feedback as they use the product or service. Then we can correlate the usage to behavior and profit patterns and link the customer feedback to operational results in a cohesive framework for real-time management and relevant intelligence. More
Resources:
Religence Thought Leadership Papers in our Next-Generation series on
2.
Market Assessment Research Primary competitive research may be done in addition to participating in lower-cost multi-clients studies where a set of potential competitors share the same information about the market, or searching through existing information to assess the market. Armed with this background, a marketing professional may talk to a few thought leaders in each of the segments and narrow it down to one or two to go after. Similarly, companies marketing to existing customers, where they have sufficient data, may use predictive modeling to target the most likely prospects. The basic question answered is WHO. Who is more likely to need it, who the competition is, who the alliance partners should be to bring it to market. What's missed quite often in marketing to existing customers is who will be more profitable. This costly oversight can be overcome by correlating the most profitable customers with the most profitable products, in terms of total contribution to profit, and by establishing business rules to match service levels with profit potential. WHY the customer should care is extrapolated from the research done throughout the development process and in accessing the market, which we've noted is typically rather limited. But generally it is the company's interpretation of the value proposition and appeal, unconfirmed with the targeted customers. Certainly, consumer goods manufacturers and other mass marketers do extensive focus groups or market tests on their offerings, messaging, and promotional materials. But formal qualitative research like this is not so prevalent in business-to-business and niche markets where informal anecdotal information quite often substitutes. WHAT'S CHANGING: The use of Voice of the Customer (VoC) research in positioning for more effective strategy execution is just being recognized as a valuable approach even though we've been doing it for decades with impressive strategy execution and operational results. We have found one-on-one in-depth interviews with key customers a viable way to confirm for our clients—particularly those in business-to-business and other niche markets—what appeals to customers about their offering so that the product/service can be positioned effectively. When you understand why anyone cares and who cares the most, you can speak to customers in language that they understand and position the company's offering for success. WHAT'S NEXT: Our use of Voice of the Customer research for positioning was a forerunner for the work we are doing now that uses the answers to WHY to inform strategy decisions. Traditional research has served to inform directional strategy decisions, positioning the company and offering vies a vi the competition. We
position the company and its offering in terms of the relationship
with the customer and what appeals to the customer to inform customer
relationship strategies. These customer relationship strategies
underlie directional strategy and operate at the channel/product
group level. Here is where the action is, where relationships are
made, and where progress in developing customer relationships can
be measured with new relationship metrics. Now in the Religence
Framework for Customer Relationship Intelligence we are helping
clients evaluate alternative strategies for customers with profit
improvement potential in a probabilistic strategy decision model
in advance of investment to determine which strategy is more likely
to make money.
Religence Thought Leadership Papers in our Next-Generation series:
3. Process Improvement Research WHAT'S CHANGING: Now leading companies are involving their external customers as well. Our team has been providing customer input on process to clients for years, although process improvement was not the main purpose of the Voice of the Customer research we did. In the past, typically, our Voice of the Customer research was for sales and marketing reasons, but customers, when given a chance to talk, invariably brought up process issues that affected strategy execution. In fact, we've found customers eager to give constructive feedback. Now we include questions about process as a matter of course and identify critical customer interaction practices, but from the perspective of how to improve on the ways our clients create value for their customers. We use value creation mapping techniques to help our clients see their company, products, and services as their customers perceive them. WHAT'S
NEXT: We believe so strongly in listening to the Voice of the Customer
that it is an important part of how we built intelligence the into
customer relationship development process in the Religence Framework. With it we tie the development of the customer relationship to profit
and operational results. Voice of the Customer feedback results
are tracked as part of the data stream that becomes a real-time
source of process improvement intelligence.
Religence Thought Leadership Papers in our Next-Generation series:
4. Satisfaction Research The good news is companies are tying customer satisfaction to compensation. The bad news is the questions typically are all about the company and its people instead of how well the customer is being served and WHY the customers feel as they do so that the process can be improved for the customers. (Please see previous section on Process Improvement Research.) Open-ended questions that would give a customer an opportunity to express themselves, without being directed to choose from the options the company gives them, are usually quite limited. Instead the customer chooses the answer from the list the company generates, quite often without the benefit of in-depth, one-on-one interviews upfront to calibrate what the lists should include. A recent Opus cartoon strip illustrates the point when a researcher asked the respondent to choose one: Leprechauns are: Either A. Not real or B. Hiding in my pants. Say, what? Research is like statistics—it can be used to get the answer the company wants to have, not necessarily what the company needs to know. So it becomes a real challenge to understand what is going on with customers when traditional satisfaction research is used by itself. Even when the lists of choices are realistic to the customer experience, what people SAY isn't always what people DO. In fact, many who say they are satisfied act like anything but that. Since the mid 1990s more attention has been given to why customers who say they are "satisfied" stop being customers, and attempts have been made to drill down more to at least categorize these customers. Are they willing customers? Is price what drives them? Are they antagonistic towards the company? The categories are helpful. They begin to answer WHY. WHAT'S CHANGING: But to be successful in today's customer-driven environment, it is important to know WHY loyal customers and customers who are advocates feel as they do, not just the ones who are likely to leave. To find this out, we augment quantitative satisfaction studies with one-on-one, in-depth interviews with top priority customers. When we ask WHY, we can direct, calibrate, and build on attitude and perception research. WHAT'S NEXT: We take it a step further in the Religence Framework for Customer Relationship Intelligence, where we have a systematic way to listen to customers, linked to strategy execution and operational results. Because the framework captures and tracks what happens in interactions with customers, what people actually DO can be correlated with what they SAY in attitude and perception research. More Resources:
Religence Thought Leadership Papers in our Next-Generation series:
5. Customer Feedback Tracking Research
How customers rate a product or a service provider company or professional, for example, can make or break a business or a career. Often the comparison of the findings to benchmarks and trends is as valuable as the research data itself. Newer tracking methods include clickstream tracking for real-time personalization on websites and for analysis of usage and other customer behavior patterns. Internet search data is another form of tracking as is the data from the evaluation of the usefulness of a review or the ranking of a reputation for trustworthiness. These newer methods joined with older scanning data and data from transactional systems are creating massive amounts of data to be analyzed. Now predictive modelers can begin to correlate what people SAY with what people DO online and in transactions, which provides a start at a context for the answers. From a technology perspective the proliferation of online survey tools has made customer feedback tracking research even more ubiquitous. For companies of all sizes, fielding surveys is now easier and lower cost, but the unintended consequence is survey fatigue for those being questioned and data overload for those asking. More it turns out, for many organizations, is less useful intelligence. There are several reasons. Partially, this is because they are getting lower response rates than they did with other older survey methods. Another factor is the increasing number of surveys conducted by different departments across the organization and directed to the same customers without orchestration. And finally it is partially because their analytical capabilities on staff haven't kept up with the data they do have. Quite often what's missing from these approaches is WHY, which would help derive meaning from the sea of data. WHAT'S CHANGING: Just as we did for a financial services firm a few years ago when they asked us to help them map all the various ways their product groups were touching the customer, leading companies are coordinating their research efforts to avoid turning off their customers and taking too much of their customers' time. Top software vendors provide tools to deliver the same survey questions across multiple channels and consolidate the data for analysis. Some provide a calendar to schedule the research across departments and to share results. So many of the tools are there; using them effectively is the people-and-process issue to be addressed. We help companies stage what they need to know and when they need to know it, across platforms and across the customer lifecycle, to orchestrate the data gathering and analysis. Just because it is easy to survey customers incessantly, doesn't mean that you should. We augment quantitative methods with in-depth, one-on-one customer interviews to direct and calibrate them. WHAT'S NEXT: With the Religence Framework for Customer Relationship Intelligence we have created a systematic, orchestrated approach to asking customers WHY across the lifecycle as your people interact with customers to develop the relationship. WHY is asked at significant events to put the answers in context and is then used to calibrate your customers' relationship status with your company as your strategy is executed. This next-generation Voice of the Customer approach enables a direct correlation of customer feedback tracking research with what people DO. For companies using predictive modeling, it adds a real-time data stream of interactions measured as transactions to significantly add to the traditional transactional context and the new clickstream data that is being used to evaluate the efficacy of what people SAY. More Resources:
Religence Thought Leadership Papers in our Next-Generation series: To get started now learning where you stand with customers, what's important to them, what to promise, and what to deliver to "develop" the relationship, we invite you to contact us. Our team of senior people is ready to help you listen to your customers, deliver more value, and identify the customers you should cultivate—who the most profitable customers are and why and what their potential is for profitable growth. _________ For More Information: Take a look at our paper Next-Generation Voice of the Customer Research. You may also be interested in our other Thought Leadership Papers in our Next-Generation series. For more on Voice of the Customer research, see our extensive Religence Framework CRI Reference Section for these topics:
Another excellent resource is our CEO's new book Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing, which explains how to build Voice of the Customer research into our operational CRI tracking system. __________ About the Author and Religence: Linda Sharp is CEO of Religence, Inc. Linda has run her own marketing firms for 30 years, building a strong track record with Fortune 500 clients and understanding success in marketing with a mathematician's eye. The Religence Framework was born of her five-year odyssey to quantify marketing and has resulted in a business process patent application and the formation of Religence to commercialize her discovery. A sales and marketing innovator and integrator, Linda was well ahead of the movement to customer-focused thinking, having pioneered the use of Voice of the Customer research. She's built Voice of the Customer feedback into the Religence Framework, taking yet another pioneering step. Learn more about her ideas in her new book Customer Relationship Intelligence: A Breakthrough Way to Measure and Manage Sales and Marketing. Religence is a customer-focused performance management consulting firm specializing in Customer Relationship Intelligence. The Religence Framework links strategic planning to operational execution and customer relationship metrics to profitability for breakthrough business-to-business sales and marketing performance. |
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