It’s time to start giving your customers a seat at the development table. Voice of the Customer (VOC) programs are delivering results today, which is exemplified in the best practices of some the leaders in this concept.
Breaking the rut of complacency when it comes to new product development and getting the true voice of their customers reverberating through their future channels, sales, service, pricing, and product strategies does take hard work, and it’s much more than just calling up your favorite customers and asking for feedback. You need to start with the customers that like you least if you really want to find areas for improvement and get an honest assessment of how you are doing. Being preemptively aggressive about improvement is what each of the companies that typify best practices in this area share as a core value.
The rut of complacency in new product development is a comfortable place, and for many companies manifests itself in a myriad of ways, including:
- Early Voice of the Customer efforts fail due to a lack of cross-functional team focus, narrow product guidance, lack of executive ownership and accountability, and incremental changes only allowed from these sessions;
- Lack of closure on the insights shared from customers and little if any evidence of products and services reflecting customer feedback;
- Lack of financial accountability around new product development and introductions.
Giving Your Customers a Voice
Cummins India, GE Capital Fleet Services, and Honeywell Aerospace have ongoing programs that focus on bringing the Voice of the Customer into the early stages of their new product development (NPD) processes. Each of their cases are slightly different in terms of what drove them to so aggressively bring Voice of the Customer processes into their new product development, but some of the lessons learned are shared across these three companies form the basis of best practices in Voice of the Customer input into the NPD process.
A Plan for Success
- Start with a baseline of your customers’ satisfaction levels today. Knowing where their customers’ concerns were before inviting them into the NPD process saved each of these companies months of getting every customers’ agendas that were close to each other. After finding out, in aggregate, the customer satisfaction levels beforehand save thousands of hours in coordinating and managing expectations.
- Cross-functional teams where performance impacts pay and bonuses work. All three companies found that when cross-functional team members who had a voice in the raises and bonuses of others, and likewise, when team members impacted their own raises and bonuses, there was a significantly higher level of accomplishment. Peer pressure with dollars involved works.
- Seek out competitors’ customers and lost prospects. A very valuable source of new product ideas, and shortcomings that no one may be seeing get discovered when lost prospects are spoken with. Rather than “price price price” being the mantra of lost business, it very well may be sales approach, strategy or lack of solution fit.
- Use both qualitative and quantitative customer listening tools for best results. A discussion of these tools could fill another three columns. The quantitative tools that need to be considered include Critical Incident Surveys, Customer Satisfaction Surveys, Customer Complaints, Benchmark Surveys and Win/Loss Reports. Qualitative tools need to include onsite visits, focus groups, unstructured content from customer service and CRM records.
- Get the Voice of the Customer involved early and often in the NPD process. Accenture has completed research in the NPD process. Bringing in Voice of the Customer into the Product Requirements Development phase is where each of the three companies start with their customer requirements gathering.
- Insist on financial accountability around new product introductions. Each of these companies found that once there was clear financial accountability around new product introductions, the entire new product development process received greater attention from the senior managers responsible for launching what was being built.
For Cummins India, the focus on bringing the Voice of the Customer into the NPD process delivered the following gains:
- Approximately 15,000 new ideas for product and service improvement were generated as a result of this strategy.
- The company credits this process with a US$320,000 savings annually, as they have re-organized to make the customer the center of their business.
For GE Capital Fleet Services, the following results were achieved:
- Increased customer satisfaction and retention scores significantly.
- Further strengthened the processes in place for making the entire division more driven by the Voice of the Customer and fine-tuned their extensive Voice of the Customer process.
For Honeywell Aerospace the following results were achieved:
- By including Voice of the Customer initiatives in re-defining service processes, closure rate on service issues increased 28 percent.
- Customer response time on service requests improved 27 percent.
- Thanks mainly to cross-functional teams incented on performance and collaboration, there was a 40 percent increase in new business opportunities as a result of re-aligning their organizations using feedback gained from their Voice of the Customer programs.
At the Intersection of VOC and NPD – Dig Deeper
Of the many books on this topic, I have found Dr. Robert G. Cooper’s Winning at New Products: Accelerating the Process from Idea to Launch to be by far the most comprehensive on this topic. Dr. Cooper has many years of experience in new product development and introductions, and while there are many other authors of books on just one industry’s processes, there are several on high-tech introductions. Dr. Cooper has what I have found to be the best handle on cross-industry insights. I am in no way affiliated with Dr. Cooper or his book by the way — I just have a passion for this area and I keep his book on my credenza for referral and reading often.
Louis Columbus, a CRM Buyer columnist, is a former senior analyst with AMR Research. He recently completed the book Getting Results from Your Analyst Relations Strategies, which is available on Amazon.com.