Blog: The Voice

Where should the voice of the customer be on a priority list?

I recently gave a talk at a conference in the southern part of Germany. The audience consisted of around 120 product managers, product portfolio owners, and marketing managers from approximately 80 small to mid-size companies, over 90% of whom engaged in B2B area. As a side note, I might add that these small to mid-size companies are the backbone of the strong German economy and probably the biggest contributors to the huge export surplus Germany enjoys. At any rate, my talk was about why collecting the right data is so important and how with some basic statistical tools one could start implementing a framework in order to be able to measure and justify the return on marketing investment or ROMI (also see my blog Marketing) http://blog.sunmark.eu/2017/06/15/b001/, or how borrowing some proven and already-available analysis tools from six sigma originally designed to minimize defects in production lines, could also pinpoint gaps in the sales or marketing processes. During the talk, one of my slides created a bit of discussion and some wider-than-usual-eyes among the audience. The slide’s title was “The Voice” and it had four bullet points on it: Voice of Customer (VoC) – Voice of Market (VoM) – Voice of Business (VoB) – Voice of Regulation (VoR). At first, I explained what is meant by each bullet point and then I simply posed the question: “Was denken Sie, welche hat die höchste Priorität?”, which in plain English means “What do you think, which one has the highest priority?”. The definitions I provided for each went something like this: VoC is what the customer says he wants and expects; VoM are the market trends and what the competition is up to according to the best of our knowledge; VoB are the organizational goals and long-term vision; and VoR is knowing the legal boundaries in the industry you are engaged in as it relates to the product or service you are providing. Prior to reading any further, why don’t you take a moment and rank the four according to your own point of view/experience?

The wide-eyed people in my audience were surprised to find out about what I had to say which was that the VoC does not necessarily have the highest priority among the four. By then I was getting side comments and hearing statements like Customer is king; Customer wants it and we have to deliver otherwise the competition will; ignore what the Customer wants today and you won’t have any to worry about tomorrow, etc. The ranking I provided was 1.VoB, 2.VoR, 3.VoM, and lastly 4.VoC because from my point of view while VoC may trigger lots of internal initiatives and discussions, it cannot by itself set forward the company strategy. What some folks in the audience were saying was, of course, all true.

You should ask your customers about what they want and expect but more importantly, you should also manage those expectations according to your company’s vision and business objectives.

To keep things simple let’s say after conducting a VoC, the results are telling you that your customers (and sometimes customers-to-be) are hinting at the need for a new product or a more robust/advanced version of an existing product. Furthermore, there may be a market demand for this product not only in your home market but also in another region you are currently not active in. Now talking about a new product development is one thing, getting it out the door is another.

Furthermore, successfully marketing and creating a sustainable revenue stream with that product may directly influence the company’s future existence. Answering a few simple questions at the very beginning could go a long way. Questions such as, weather or not this new product would bring the company closer to achieving its business objectives and how. Not only in financial terms but also in terms of the VoC not being in conflict with the organization’s business model. As we all know, achieving financial objectives are the outcome of running a healthy business and doing a bunch of things right simultaneously. Considering some obvious risk factors such as cannibalization, jeopardizing any existing cash cows, having the technology and the technical know-how, having the right strategic partners or willingness to setup a local operation and so on may help in clearing the first step. In other words, one should look, rather listen, very carefully for signs that the two voices – so far heard in isolation – could, in fact, complement each other much like two different voices singing a duet song. In practice the “duet” may not sound like anything harmonious at the beginning and expecting both singers to sing in harmony on the first try would be naïve otherwise someone else would already be singing that tune. If there are no clear signs of conflict between the VoB and the VoC, continuing toward the next step – Voice of Regulation – will be the next logical move.

Not doing your homework thoroughly and cutting corners when it comes to knowing about the existing and upcoming regulations or standards as they relate to your product or service especially in your target market could be disastrous. Are there any regulations that would prohibit you from exporting your product to a certain region of the world due to the ever-changing political landscape or even sanctions? Can you meet the required CE or UL standards that may be required? In short, you would definitely want to know about any regulations that could limit your activities up front to be able to identify the potential risks or even show-stoppers at the early stages. Being properly represented in the committees who define and update the standards in your industry segment AND having an internal process of cascading the pertinent information within your organization can be a very valuable asset. Some companies go even as far as employing lobbyists to influence the existing and upcoming regulations and I am sure it is not necessarily because they have deep pockets, but in fact due to having done exactly what is being described here and coming up with a tactic how to cope because the benefits outweigh the cost. To use the same analogy, if you can determine that this Voice could also join the “duet” without disrupting it then you can proceed to the next step – Voice of Market.

VoM, from my point of view, consists of two parts: market trends and competitive intelligence. As far as identifying and keeping up with market trends are concerned, hopefully, you have a marketing department or product managers who are on top of this coupled with an internal process of sharing this information throughout the organization. As far as gathering competitive intelligence goes, watching how your competitors behave in the market, which projects or contracts they have won or lost, looking at their financial performance if they are a public company, checking their website on regular basis, asking your customers about their interactions with your competitors, visiting their booth at a trade fair, guessing at how much they are spending on marketing, following them on social media, information about their pricing structure, etc. jump immediately to mind as some basic tactics for gathering competitive intelligence. But all this effort is not worth a cent/penny if you are not capturing and recording this information in a systematic way. Even though the grass always seems greener on the other side, believe it or not, the competition, your competition, is a business with lots of moving parts just like yours. They have their own problems and issues just like you and they are faced with making difficult decisions just like you. Competitive intelligence, at least in my vocabulary, means knowing enough about what the competition has done in the past and combining it with your knowledge of the ongoing market trends in order to take an intelligent guess at what they are inclined to do in the future. If you do not yet have a formal process for capturing competitive intel — and ideally tie it back to your CRM system — skipping over this step may be the smart thing to do here because you will be looking at events in isolation and anything you do will not be more than a knee-jerk reaction.

A word of caution on measuring any new idea against the VoB: 

If you are working for a company who has a measuring stick in the ground and you and your peers know roughly how long that stick is and can guess where to find it, consider yourself lucky.

More times than I’d like to admit, I have come across companies who really struggle with understanding what their business has grown and evolved into or where they want to take their business next, let alone how. More times than I’d like to admit, I have come across CEOs who were running full speed ahead thinking everyone else in the company must understand what she is running after only to look back at critical moments and see no one is following. Unless we are talking about a revolutionary product or service that has the potential to challenge the existing business model and impact the long-term company vision or justify investing in a new business in parallel, going through the first step as described above should be a straightforward task. If you find yourself struggling at this stage, and by struggle, I mean having to rely on mainly your or anyone else’s gut feeling to make decisions, you might want to start by looking for that stick first.

And finally, a word of advice on conducting VoC’s. VoC’s are not merely asking your customers “what would you like?”. Asking a company engineer to come up with a VoC survey vs. a sales professional vs. the VP of product management, could produce astonishing different results because those individuals have different views and objectives. This is why enough thought and attention should be given to setting forward a VoC strategy, centralizing the program, tying questions to goals, and choosing the right survey methodology. If you have never done it before, my word of advice would be to get outside help. Even though I have argued that VoC is the lowest-ranked among the four Voices, without it you could end up shooting in the dark and having to listen to whoever claims to have had a conversation with a Customer as recently as yesterday who wanted this or that and was about to call a competitor!

by: Ali Hoorsun – August 2017