How to Capture the Voice of the Customer

By Michael Chase. This page is available under the Creative Commons Attribution License

Market Intelligence How to Capture the Voice of the Customer

Introduction

To ensure the commercial success of your products, you must constantly validate your strategy and plans with your target market. You need the voice of the customer, and you need a process to get it. For capital equipment markets, voice-of-the-customer market validation has two distinct sub-processes:

Buying behavior validation
New product validation

Buying behavior validation is an ongoing process that shapes your company’s market and product strategy. It produces product roadmaps that trigger new product development programs. Each product development program requires a much more detailed market validation process. You need to ensure that it has set the right targets, addressed them with the right design, and produced the right implementation of that design. See Figure 37.

Figure 37: The capital equipment voice-of-the-customer process

Buying Behavior Validation

You need to share your strategy with your customers so they will be more likely to share theirs. The best way to do this is to capture your strategy in a customer-facing presentation. Then share it with participants in your target markets for their feedback. Incorporate the buying behavior attributes that you want to confirm, such as:

Market size and outlook
Technology trends
Industry challenges
Industry roadmap
Application process flows
Application requirements
The customer problem and unmet needs
Competitive landscape
Your product roadmap
Value models

Validating buying behavior is a never-ending, iterative process. To be successful, it must become a habit, just like any other continuous improvement process. It is the only way you can ensure that your product roadmaps define your product’s path to commercial success.

Right Targets Validation

Each product on your roadmap needs a market requirements document to make a business case for development and to specify the product’s performance targets. When you are validating a market requirements document, you are asking the customer, “If I built a product that did these things by this time, would you buy it from me at this price?”

To prepare for the right-targets validation step, create a customer-facing presentation. Fill it with the critical content from your market requirements document including:

Market need
Application assumptions
Key product performance targets
Expected competitive advantages
Value and pricing
New product introduction timing

You will use this presentation to facilitate customer feedback on the targets you have set for your new product.

Right Design Validation

Engineering will create designs to achieve a planned new product’s performance targets. As soon as concept drawings, mockups, animations, and the like are available, show them to a subset of the customers who saw your right-targets presentation. You are looking for what customers like and dislike about your design concepts and why. This is also an excellent time to review the alternatives and performance trade-offs your team is considering. Ask your customers what they would choose and why.

Right Implementation Validation

Your product’s ability to deliver on your value proposition in the customers’ environment is paramount. In this voice-of-the-customer step, ship a pre-production or beta system to customers for evaluation and feedback. Beta system validation is a time-, people-, and cash-consuming step, so keep the number of customer engagements small. Given the risks, costs, and need for data in a new product’s beta phase, be sure to secure a formal agreement with each beta customer for:

Qualification testing
Data sharing
Design changes
Success criteria
Terms for purchase

Whom to Talk to

To get the data you need, you need to talk to the right people at the right customers in each market validation step.

Buying behavior validation helps you analyze market segments, identify growth opportunities, and evaluate your strategy. Here, it makes sense to talk to the broadest range of potential customers. You may also include your customers’ customers and other suppliers. The target customer population narrows as you near the new product’s market introduction. By the time you get to right-implementation market validation, you might limit your efforts to one or two lead customers.

You also need to make sure that you target the right people in your customers’ organizations. You can think of these people in terms of three buying personas—economic, technical, or user. The economic buyer is the person or group of people that make the final decision to buy. The technical buyer decides if your equipment can perform the required task and sets the purchasing specification. And finally, the user buyers are those that will use the equipment, such as operators and maintenance engineers. See Table 14.

VOC Phase	Target Audience	Buying Persona Focus
Buying behavior	A broad range of potential customers plus adjacent market participants, suppliers, and your customers’ customers	Economic buyer Technical buyer
Right targets	Significant buyers in your market with experience with your equipment type	Economic buyer Technical buyer
Right design	A small group in your target market with a reputation for respecting confidentiality where you have well-developed relationships	User buyer
Right implementation	One or two lead customers	User buyer Technical buyer

Table 13: Target audience by voice-of-the-customer (VOC) phase

How to Get a Voice-of-the-Customer Meeting

What is your most frequent response to an Amazon.com® product review request in your inbox?

You delete it.

What about when your phone is flashing the caller ID of the dealership where you just bought your car?

You let it go to voicemail.

What about the customer survey link that the check-out clerk circled on the bottom of your Home Depot® receipt?

It never even registers on your radar.

You discard requests for product feedback because you do not believe that providing it will improve your life or impact the supplier’s product. All we hear is the supplier asking us for something it needs. We hear nothing in their request that suggests we will get something for our effort.

If you use the same “Give me your feedback!” approach to secure voice-of-the-customer meetings, you will get the same result. So, do not do this:

Dear Customer:

I am the product manager for the Turbo XT system at EquipCo. I am conducting voice-of-the-customer meetings to gather input for our next-generation system.

I would appreciate a couple of hours of your time so that I can ask you some questions.

A request like this only communicates your needs. It is all about you. It is not much different from a complete-this-survey request from an Internet retailer. Your customer will view it as more bother than it is worth. So, do not ask customers to meet with you for a voice-of-the-customer meeting. Instead, offer to share your strategy and plans with them like this:

Dear Customer:

We are establishing plans for the next generation of the Turbo XT system. To ensure that our products meet your requirements when they come to market, we would like to meet with you to review our plans. When we meet with your team, we will:

Your feedback will help us produce products that will meet your needs, help you address your most critical issues, and help your company be more profitable.

My team and I will be in your area August 15-20th. Is it possible to set up a two-hour meeting in that time frame with the appropriate people from your company?

This second version of the voice-of-the-customer meeting request clarifies that you plan to provide something valuable. You are offering them an opportunity to push your strategy in a direction that meets their needs. The capital equipment buyer’s chance to influence their supplier’s product plans is well worth two hours of their time.

Do not forget to engage your sales team. They have the connections and relationships to help you secure your meetings.

In each voice-of-the-customer meeting, you will ask your customers and potential customers to share sensitive, intimate details about their businesses. These details are often non-public, proprietary, and competition sensitive. Getting them to share these details with you requires an environment where they are comfortable doing so. Here are several tips to help you get that done:

Make sure that you have information to give. Getting customers to share details about their business will require a little quid pro quo. You will need to give to get.
Small groups work best. The larger the group, the more formal the meeting gets. The more formal the meeting, the less information gets shared.
Do not bring senior management to working-level meetings and vice versa. Management will want to set a good example for subordinates. Subordinates will worry about divulging something inappropriate in front of management. Everyone will be overly cautious about what they say and share.
Split up the presenting and question-asking tasks. A presenter that constantly stops to ask questions and record answers is distracting. Better to keep the presenter in the giver mode and let someone else do the getting.
Let customers know well before your visit that you will share your plans. Alert them to any specific areas that you intend to probe. This gives them time to prepare and makes the best use of everybody’s time.
Resist the urge to sell or defend your strategy. If the customer objects to something you have presented, try to find out why. Remember, you are not selling anything other than that you are a first-rate supplier that wants to understand its customers’ needs.
Keep voice-of-the-customer visits separate from sales calls. You do not want customers to assume a negotiating posture when you are seeking feedback on your strategy.
Talk twenty percent and listen eighty percent of the time. Devote one half of your talking time to asking questions.
Avoid electronic note taking. Your customers view you as a potential leak to their competition. Put a microphone on the table or start keying your notes into a laptop and they will go silent. Instead, take notes with pen and paper. You will appear politely attentive and non-threatening.

How to Talk about Future Products

In voice-of-the-customer market validation, you will talk to your customers and your sales force about products that are not yet for sale. If you mishandle voice-of-the-customer conversations, you can:

Delay sales of your current products.
Tip your hand to competitors.
Over commit your company.

To manage expectations with salespeople and customers during voice-of-the-customer market validation:

Ensure that everyone understands that roadmaps and market requirements documents represent intentions, not commitments.
Know where you are in the buying cycle with each customer that you meet. Adjust your approach as needed to ensure that you do not discourage a customer from buying a current product.
Do not share product cost information. What a product costs you to make has nothing to do with whether a customer will buy it or the price that they will pay.
Play it safe. Add a multi-month buffer any time you show a future product release date.

Whenever you talk about future products, you are sharing the essence of your strategy. There is always the risk that someone will leak it to your competitors. It is a balancing act between sharing enough to get feedback and protecting sensitive information. When deciding how to strike that balance:

Assume the information will leak to your competitors.
Make sure that non-disclosure agreements are in place.
Present and share, but do not distribute detailed strategy materials outside of your company.
Only share with customers with a reputation for respecting confidentiality.

How to Confirm Buying Decision Drivers

If you have an engineering or scientific background, you may be familiar with a branch of applied statistics called design of experiments (DOE). DOE is a method that allows you to manipulate multiple input factors to figure out their effect on the desired output.

Choice-based conjoint analysis is a market research method that you can use to determine how customers make buying decisions. You can think of it as DOE for product managers. In your case, the inputs are product attributes, and the output is a buying decision.

You can use choice-based conjoint analysis to reveal how a customer ranks certain product attributes. For example, you could ask customers to choose between two product attributes, such as:

Is throughput more important than yield?
Is yield more important than price?
Is price more important than throughput?

You could also ask customers to choose which of two product configurations they would buy. See the example in Table 13.

Attribute	Product Choice A	Product Choice B
Maximum resolution	15 µm	10 µm
Throughput	100 units/hour	100 units/hour
Price	$50,000	$60,000

Table 14: Example product choice for conjoint analysis

In both attribute and product choice-based conjoint analysis, you present the customer with a series of binary choices. You design the choice series to reveal the product attributes that are the most important for the customer’s buying decision and how they value them.

How to be Confident in Your Conclusions

Your customers are not of one mind, nor do they all use and evaluate products in the same way. You will encounter conflicting data, gaps, and ambiguity. You need to resolve these so that you can be confident in your conclusions and the resulting decisions for your product line. To improve your ability to do that:

Participate directly. The customer discussions will be full of nuance and conflicting data that require a product manager’s insight and follow-up to resolve. Also, your customer feedback could lead to a recommendation for a major investment or a change of plan. If that happens, you will want to assure management that you got the customer data directly and not through delegates.
Plan your questions. In every voice-of-the-customer meeting, you will ask the customer questions critical to your strategy and plans. Document them and have them in front of you during your meetings.
Keep the number of variables low. Do your best to use the same materials, questions, and validation team for every voice-of-the-customer meeting. That way the only variable that is changing meeting to meeting is the customer.

Get multiple perspectives across multiple functions from each customer. You cannot be sure that a single employee represents the whole company.

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