The Voice of the Customer
Why do you need a Voice of the Customer strategy, and how to deploy one in your business.
What would happen if suddenly you became capable of reading the minds, needs and secret desires of an entire market?
And if also you acquired the knowledge of how to build the product or service they are craving for, at the lowest cost possible?
I’ll tell you what will happen: you’ll become RICH.
And that is exactly what the Voice of the Customer methodology does: it gives you the means of methodically knowing what your customers want.
Now you only need to pair that knowledge with an efficient production process, and you’ll have a profitable product your customers will be flocking to take from your hands.
What you will learn today
Today we will explore:
What is the Voice of the Customer (VOC)
Why it is a good idea to implement a VOC program in your business
How can you use it to identify new ways to provide Customer Value through your products and services
What do you need to have your own VOC program
How to make it happen!
What is the Voice of the Customer (VOC)
In a nutshell, Voice of the Customer is the term used to define the stated and unstated customer needs and requirements1.
Let’s stop here for a minute and analyze the meaning of this.
As a business, we want to know what is in our customers’ minds, their needs, their problems, etc.
Then we can try to create products and services that will cater to those needs, in a profitable way.
But as we cannot read minds (yet), we need to recourse to other means for collecting this valuable information.
The most obvious way to do this is to ask our customers directly.
That’s why we have:
Customer Interviews
Focus Groups
Customer Surveys
etc.
But here we will face a problem: customers not always know how to verbalize or communicate their needs.
And even worse: most of the time, customers are so used to living with their problems they no longer are conscious of them, so they don’t even try to verbalize them when asked.
This is where Social Sciences come to the rescue: enter the Ethnographic Studies.
When an Anthropologist needs to understand a society, but cannot rely on the ability for their members to explain their own behaviors, they choose to live amongst them for a while.
That way he is capable of observing things people do without even realizing they are doing them, out of habit and unspoken rules and customs.
This is only one example of how an Ethnographic Study can be performed, but you get the idea: finding out the customers’ unstated needs.
Of course, we don’t need to be a Sociologist, nor develop a formal Ethnographic Study to be able to collect unstated/unspoken needs from our customers.
But we must be aware that those needs exist, and if we go the extra mile to find them, we will have an edge over our competition.
Mining the Voice of the Customer to capture Customer Value
Now that we know what is the Voice of the Customer, we need to understand how to capture it.
Capturing the Voice of the Customer, and making it work for our business looks a lot like mining gold:
You need to explore and prospect different market segments, to find where your target customers might be.
Once you find a potential ore vein (customers with underserved needs), you decide to focus all of your efforts there.
Then you begin extracting the “mineral” using different techniques (collecting VOC using surveys, interviews, ethnographic studies, etc.)
But the ore you’ll pick up will not only bring your valuable gold, but also rocks and other minerals. The same will happen with the VOC you collect.
So you need a process to refine it, separating what is useful from what isn’t.
Finally, you’ll use your refined VOC data to create products with unprecedented Customer Value that your markets will think are nothing short of magic, and become rich.
To understand how the Voice of the Customer can be turned into Customer Value, we first need to understand Customer Value itself.
Voice of the Customer and Customer Value
Let’s begin with this necessary statement:
“Value lives in the heads of your customers and nowhere else.”
Your products’ value depends entirely on the opinion of your customers about it. Not on your processes, your raw materials, even the money spent on branding.
It’s in their heads.
No matter how excellent your product might be, if your potential customers think otherwise, they won’t buy it. Period.
There are two ways of creating Customer Value:
Value Creation by Technology Push: Generate new ideas and connect them to market needs
Value Creation by Market Pull: Discover hidden markets with unmet customer needs
So, your business will usually have to focus on one of two types of Innovation model:
Technology-driven Innovation, or
Customer-centric Innovation
Customer Value
Let’s go deeper into our Customer Value definition:
“Customer Value = Benefits - Liabilities”
When customers compare products or services, they consciously or unconsciously compare the benefits and liabilities they get from each of them.
Of course, this comparison is not mathematically perfect, and is often subject to personal biases and etc., but it’s our marketing job to deliver a message that magnifies the Benefits we provide, while minimizing any Liabilities.
And by innovating on any of the items we are about to explore, you’ll be increasing the Customer Value your product or service provides, making it more appealing to your market.
Benefits
The benefits we can provide to our customers aren’t limited to the product itself, nor are exclusively related to their functions.
Very often we neglect opportunities to provide extra value that can even make commodities more competitive and attractive to our customers.
Functional Benefits
Those are benefits directly related to the intended function of the product or service.
Product functions. In disciplines like Six Sigma those are directly related to the performance levels of the product or service. This is what the product or service does.
Economic benefits. How our product or service directly impact our customers’ revenues, making us preferable to our competition.
Reliability and durability. If our products cause less problems, then we introduce less uncertainty and risks in our customers’ processes, making us a better choice.
Psychological Benefits
As human beings, we don’t coldly evaluate functional benefits in the products we choose, but also benefits that affect our wellbeing, self esteem and state of mind.
Those are the Psychological Benefits a product or service can provide, and many times are a powerful deciding factor, even greater than function itself.
Prestige and emotional factors. For example, brand name reputation (think of Apple and their overpriced but highly sought after products and services).
Perceived dependability. Think of Volvo and their perceived extra safety.
Social and Ethical reasons. For example, products that come from environmentally friendly businesses, or built using ethically sourced materials.
Psychological awe. Just remember the first iPhone launch, and how it single-handedly created a whole new industry.
Psychological effect of competition. If there aren’t many competitors yet, the product won’t be seen as a commodity.
Service and Convenience Benefits
Beyond the functional and psychological benefits your product can provide, you can make your customers’ lives easier in many ways, reducing friction for the acquisition, use and disposal of your products.
Again, those benefits are often neglected, and are a great source of differentiation that can make your business preferable to your competition.
Availability. Is your product or service hard to get? Do you distribute it close enough to your customers?
Service. If your product isn’t a consumable, and can be subject to repairs or support services, you must make sure those are of easy access.
Disposal. Some products can be hard to get rid of, or be subject to heavy regulations regarding disposal procedures. You can have an edge over your competition if you provide disposal as part of your services. Think of “Circular Economies”.
Liabilities
The liabilities that come with the consumption of our product or service must be minimized, to increase the perceived Customer Value.
Economic Liabilities
These are probably the most obvious ones, and the first thing a customer evaluate against the list of benefits.
Price. The price can make or break a product or service, becoming a strong anchor in the positioning it takes in our customers’ minds.
Acquisition costs. Transportation, shipping or any additional costs we must incur to access the product or service.
Usage costs. Costs that come naturally with the usage of the product, like installation fees, subscriptions, insurance, etc.
Maintenance costs. If the product requires constant maintenance, it can become a nuisance for the customer.
Ownership costs. Think of the yearly renewal of software licenses, taxes derived from the possession of the product, etc.
Disposal costs. If the disposal of the product is costly and strongly regulated, it can become a liability to be addressed.
Psychological Liabilities
As with the psychological benefits, the psychological liabilities can be a strong decision factor when choosing a product or service.
Even if the product or service is a B2B one, being purchased for an organization, the buyers are human beings.
Have you heard the old adage: “Nobody gets fired for buying IBM”?
This was an example of a superbly executed branding strategy for reducing a common psychological liability: getting fired because of a bad decision.
Uncertainty about the dependability of the product or service. Nobody gets fired for buying IBM, remember? Make sure your products are know for their reliability.
Self-esteem liability for using an unknown branded product. Driving a Toyota is not the same as driving a Mercedes.
Psychological liability of poor performance of the product. If the product performs poorly, you will feel bad about your decision, beyond any other repercussions.
Service or Convenience Liabilities
Liabilities due to lack of service. If you don’t provide easy access to services or support, the customers might choose not to purchase from you, even if your product is functionally superior.
Liabilities due to poor service. The same might happen with a product with poor service. Word about it will spread, and fast. Customers will avoid purchasing a good product with a poor service.
Liabilities due to poor availability. Customers won’t go far to get your product if it isn’t easily available, unless you are tremendously unique. And that is quite uncommon.
OK, I want my own Voice of the Customer program. What do I need?
I’m glad you are already convinced of the powerful tool for your business that a properly implemented Voice of the Customer program can be.
Now let’s talk about what you need to have, as an organization, to deploy one.
First of all, lets be clear about how are you expected to use the Voice of the Customer data you will collect and process:
You need the right kind and sufficient amount of accurate VOC data to feed into all the stages of your product and service development.
Your VOC data will allow you to discover and understand your customers’ value position and key customer value factors (like pricing and functions).
If you ever want to change your current customer value proposition into another one (like you do when applying Blue Ocean Strategy), VOC data will be invaluable.
Incremental product improvements will have a higher probability of success if guided by VOC data.
With that in mind, let’s talk about the core elements for a successful VOC implementation.
The Team
It is common (and a common mistake) to throw this responsibility to the Marketing team.
Or the Product Development team.
Or the Engineering team.
For a Voice of the Customer initiative to be successful, it needs to be multidisciplinary.
The reason is very simple: no single department or profile has all the necessary elements to collect the VOC data completely.
And we are going to see why.
The VOC data collection
Not every type of data that can be provided by the customer is useful as a VOC source, if we are focusing on creating Customer Value through product or service development or improvement.
Let’s review the kinds of VOC data that can be collected.
VOC data not suitable for a product development process
This qualitative and quantitative data can provide us with a deeper understanding of our customers and their needs, but is insufficient for fueling a product development process.
Solutions. Even if customers know their problems, they are not engineers, scientists nor product experts. So the solutions they might request or suggest are probably not good ones, and might even interfere with other product requirements.
Specifications. Customers often make requests like “bigger screens” or “lighter weight”. But if you give them a bigger screen, the laptop will become larger and heavier. A better solution might be just “higher resolution”. But the lack of technical knowledge makes the customer provide specifications that probably won’t be useful.
Needs. If a customer asks you for a more reliable product (a need), how do you define “reliable”? And how much is “more reliable” compared to the current reliability? Customer needs tend to be expressed in vague language that isn’t useful for product development.
Benefits. Again, expressions as “faster” or “better” aren’t precise enough and don’t bring measurements that allow to use them for a product development process.
VOC data suitable for a product development process
On the other hand, this type of data can successfully drive our product development process, because it contains the all the necessary elements.
Jobs to be done. These are the functions that the product must perform to be useful. A complete list of the “jobs to be done” will allow us to have a product or service that fully satisfies the customer.
Desired outcomes. These must be as specific as possible, describing the results of using the product or service. For example, a laundry detergent might have as a desired outcome: “be able to fully wash 7 kg. of laundry with only 10cc of detergent”.
Constraints. Constraints are physical, regulatory and environmental restrictions that must the product or service must forcibly comply. For example, if a gun needs to be able to be operated with either hand, left or right, it must provide a safety lever on both sides.
The Multidisciplinary Team
As you can see, from the types of VOC data that can be collected, most of them require being familiar with the customer language and way of thinking.
This is the primary function of the Marketing team, and they are perfectly suited for the task.
But at the same time, measures, specifications, constraints and functions are an important part of the VOC data to be collected.
And those are in the domain of the Engineering and Product Development teams.
So you need members from both teams on your VOC collection program, or you risk getting useless data.
Make it happen!
The Voice of the Customer concept and methodology are part of the Six Sigma’s Quality Function Deployment (QFD) framework for developing outstanding products and services.
We will not cover the QFD framework itself now, because it is quite extensive and deserves its own article in the future.
But with the information we have already reviewed you have more than enough new tools to deploy your initial Voice of the Customer program, and start increasing the Customer Value you provide.
You can start by checking the list of Benefits and Liabilities, and finding where you can provide extra benefits and reduce or eliminate existing liabilities in your products or services.
Do you sell computers and IT hardware to your customers? Offer them an end-of-life service for collecting the hardware they are going to dispose of, removing that hassle from the product ownership.
Do your country has a new car tax during the first few years of ownership? Offer to cover it, as long as the customer keeps doing their maintenance on authorized dealers during that period of time.
The possibilities to differentiate your business are endless.
To get the information you need, perform Customer Surveys, Customer Interviews, Focus Groups, etc.
But remember: the customers are not always capable of communicating properly their real needs and requirements.
Have you ever thought about “lending” someone from your Engineering or Marketing teams (or one from each) to a customer so they can help them with their everyday operations?
I can assure you the insights you’ll acquire will be unparalleled, and largely surpass the costs of that “hands-on experience”.
Build a multidisciplinary Voice of the Customer team, and make them responsible of crafting the surveys, running the interviews, guiding the focus groups, analyzing the data collected, etc.
Their simultaneous points of view will shed more light on the customers’ behavior and needs than if they were to work separated or sequentially.
Conclusion
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References
Yang, K. (2008). Voice of the Customer: Capture and Analysis. McGraw Hill Professional.