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Grow Your Business: Know Your Customers, Part I

Uncovering the voice of the customer

Editor’s Note: This is another installment in a series of articles intended to help metal fabricators improve their commercial engines and grow their businesses. To complement this two-part article, Fairmont Concepts is hosting a one-hour webinar describing this VOC approach on April 11, 2018, 11 a.m. Pacific, 2 p.m. Eastern. The webinar will present the full VOC research approach in more detail than can be covered in these articles; provide helpful visuals and examples; and answer questions. Click here to sign up for the webinar or click here to download it if the webinar has already taken place.

Know thy customer is a basic rule of business. You must thoroughly understand your customers’ needs to sustain a successful business. However, manufacturers have many pressing issues that need immediate attention. Concentrating on quality control, on-time shipment, and the supply chain, even to the detriment of keeping up with the changing needs of your customers in your best end markets, is natural.

Voice of the customer (VOC) research is an activity that you can conduct in days by calling a few favorite customers or take months (or quarters) canvassing your installed base. Finding the right scope can be hard. A quick study rarely delivers results believable enough to motivate your company into action, and an exhaustive study can drain too many resources and take too long.

Will VOC Research Yield Results?

Manufacturers embarking on a VOC research project typically have three questions:

  1. Will the research results show where we can make improvements?
  2. Will my team believe the results to be credible enough to take action?
  3. Will the results be worth the time, money, and resource drain?

If you do it wisely, the answers are yes. In some cases, a solid VOC study can be the difference between business success and failure.

The key is to take a scientific, fact-based approach.

Recommended VOC Approach

In this two-part series, a VOC research approach based on a system developed by Applied Marketing Science is described. It has the right blend of delivering highly effective output while retaining reasonable scope. The approach uncovers a comprehensive list of needs, gathered in a strategic way, listed in the customers’ own words, and organized and labeled by the customers themselves. When it is completed, you’ll have believable, actionable data that will motivate your team to take action and improve your offerings and services.

A comprehensive set of accurate customer needs is vital to the performance of many departments (Figure 1).

What Will Be the Result of This Research?

The best way to get you fired up to conduct this research is to show you the end result. Figure 2 and Figure 3 depict the two primary deliverables of this research approach. They show the VOC deliverables for ABC Custom Truck Works, a fictitious company that manufactures custom vehicles for landscapers, electricians, and carpenters. These examples are specifically for its landscaper end market, though some of the needs are appropriate for other, adjacent end markets.

Deliverable No. 1—Primary Needs Table
The first deliverable you create will be the Primary Needs Table, Figure 2. The table includes three to seven need families (in this example there are three), and 12 to 25

primary needs (in this example there are 14).

Figure 1. Departments that can utilize market needs data

The Primary Needs Table provides an organized picture of your customer needs in a way that your company can easily understand. Most of the needs you uncover will not surprise you. Being urprised at what doesn’t make it onto the table is more common. The magic comes from knowing for sure that these needs are of prime importance to your customers and should be focused on first.

Deliverable No. 2—Market Opportunity Map
The Market Opportunity Map is the second major deliverable of the VOC research. This map places the primary needs in a 2 by 2 grid based on two criteria:

  1. The importance of each need to the customer.
  2. Your performance in meeting their expectations related to that need.

The top left quadrant of Figure 3 shows areas in which ABC likely will concentrate first – where the importance of the need is relatively high and the company’s performance fulfilling the need is relatively low.

These two charts—the Primary Needs Table and the Market Opportunity Map—present a clear, concise, prioritized summary of the things your customers want.

How Long Does the Research Take?

If you have the time and talent, this research can be executed without the help of outside resources. It typically takes approximately 16 weeks if you go it alone, and half that time with help from an experienced external partner. You can expect two people to work 20 to 30 percent of the time on the project, with other key stakeholders providing occasional support.

How to Conduct the Research

Let’s start with a general overview of the process that creates the Primary Needs Table and the Market Opportunity Map. The research involves recording interviews, pulling the needs from the transcribed interviews, and then having a few knowledgeable customers (yes, customers) group the needs into 12 to 25 primary needs to create your Primary Needs Table. These needs then are distributed in an email survey to as many users as you can reach in your target market, which enables you to create the Market Opportunity Map.

You’ll find scheduling the interviews and pulling the needs take the most time. In the end, you have a full set of primary needs in your customers’ own words and priority.

The Outline

  1. Establish project scope and obtain approval.
  2. Develop the VOC interview plan for the audience.
  3. Conduct the VOC interviews.
  4. Identify and sort the VOC needs to create the Primary Needs Table.
  5. Conduct the broad customer rating email survey to create the Market Opportunity Map.

Here are the details of the five steps (Figure 4).

Step 1. Establish project scope and obtain approval.
Create a scope document to plan your project and get leadership buy-in. Consider filling out each of these section headings: Purpose, target audience, background and assumptions, objectives and deliverables, tactics, internal and external resource demand, budget and ROI, timeline and milestones, reporting, and signatures.

Figure 2. Primary Needs Table example

Obtaining buy-in at the start helps you gain the confidence of others in your research approach and makes them more likely to fully endorse and use the research results.

Step 2. Develop the VOC interview plan.
The interview plan includes the number of people you will interview and their demographics. Determine the number of each type of customer and job title that will provide a cross-section of your target market.

How many interviews are required to obtain most of the needs? Surprisingly, research has shown that when proper interview techniques are used, 20 to 30 interviews are sufficient to gather more than 90 percent of customer needs. I recommend 20, as they will generate 400 to 1,000 needs that, upon scrubbing, will provide 75 to 300 unique customer needs statements.

Design an interview plan that includes the main influencers and important demographics. You want a good cross-section of the market. Consider job title, geographic location, application, or other categories that make sense for your business. Figure 5 shows an example interview plan for ABC Custom Truck Works. ABC is located in New Jersey, and also covers parts of New York and Connecticut. The key influencers in the purchase and usage of its products and services are operators, managers, and owners.

The next step is to add contact names to each of the cells. As much as possible, use random sampling to select your target companies with one exception: try to include several early adopters, highly enthusiastic, or highly innovative customers. These interviews often are important sources of needs because these customers typically have a strong desire to maximize the performance of your offering. You might find that some cells are hard to fill, but do your best to stick to your interview plan. For 20 interviews, start with a list of 80 to 100 names.

If you are addressing more than one market or product but feel they can be combined into a common interview pool, include an additional 10 interviews per market or product segment. Track the responses from each segment separately so you can highlight significant differences.

Step 3. Conduct the VOC interviews.
In Step 3 of 5, interviews are recorded and transcribed. Recording ensures you capture the customers’ own words and frees you from taking notes.

I use TapeACall to record the call on my smartphone, and then Rev to obtain a transcription. Many services are available. In your introductions, be sure to tell the customers the discussion is being taped, that recording allows an open discussion to take place without being slowed by notetaking, and that the recording will only be used internally.

You need at least 30 minutes per interview. I typically ask for 45 minutes, knowing that some will stretch to an hour.

Two people should conduct the interview, one to act as the main interviewer and the other to jump in to dig deeper if an opportunity is missed by the main interviewer.

Figure 3. Market Opportunity Map example

The interview technique involves following a conversation thread with open-ended questions. You are not conducting a yes or no survey; you’re seeking customer needs stated in the customer’s own words.

Here’s an example to help illustrate the interview question technique:

“Do you prefer A or B?”
Close-ended question, merely used to set up the discussion.

“Why do you prefer B?”
Open – might uncover a new need, or simply identify the reasoning for selecting one product over another.

“You mentioned you prefer B because it is faster. Can you explain your need for speed?”
Open - following a thread of the conversation digs deeper to uncover the true need. Continue following this speed thread. For example, if they mention they need speed to avoid bottlenecks in their production line, ask additional probing questions around issues pertaining to production bottlenecks.

Prepare 10 to 20 general questions, with in-depth follow-up questions for each in the event the customer doesn’t understand or gives a quick reply – especially if you are speaking to someone who is in a position to provide more information. Use the same template for all customers, but the questions you actually use depends on how the interview plays out.

When the customer expresses a need, dig in to explore it fully. Stay flexible. Omit questions or take them out of order if necessary. You are in search of needs, not trying to get through a list of questions. The interview guide is meant to be an aid, not a constraint. Expect to ask questions that occur to you during the conversation, even if they are not in the guide.

Use simple questions to begin. Loosely follow chronologically, starting with the customer’s first use of the product and moving to the present state. Start by asking about extremes such as “best” and “worst.” Get your customer talking and follow conversation threads that seem to be uncovering needs.

When you’ve concluded these three steps, you will have 20 or more transcribed interviews full of customer needs. You and your co-interviewer probably will find conducting these interviews fascinating and fun. You also will find that some were full of valuable needs, and some were busts.

What Comes Next?

Part II of this two-part series covers steps 4 and 5. These last two steps are where the rubber meets the road. The steps describe how to turn your taped interviews into your Primary Needs Table (Figure 2), and then how to conduct the online surveys to create the Market Opportunity Map (Figure 3).

Please email me with any questions – cburnham@fairmontconcepts.com.

About the Author
Fairmont Concepts

Chip Burnham

Co-founder

(833) 667-7889

Chip Burnham is author of MarketMD Your Manufacturing Business, and co-founder of Fairmont Concepts, a company dedicated to helping manufacturers maximize the performance of their commercial engine.