How (and Why) to Implement a Voice of the Customer Research Program

Expansion stage CEOs and management teams are information carnivores, digesting data, industry news and trending product developments that will ultimately help them better understand their business’s position in the market.
That’s a good thing. But while all of that information undoubtedly helps them prepare their companies for current and future trends, they sometimes overlook one of their greatest – and most obvious – research resources: their customers.

After all, who better understands what your company is doing well, what it could do better, and which competitors pose the biggest threat to your business?

Truthfully, every company should be able to identify its top customers and closest competitors. If you can’t, then you’re missing out on valuable insight into potential target customers, product functionality developments and product positioning and marketing strategies.

So, how can you identify your closest competitors and top customers?

Generally, management teams can accomplish that by talking to their sales and customer service people. They interact with your customers on a daily basis and have a broad understanding of their pain points and favorite product features.

However, to truly identify your top customers and competitors and understand your competitive advantage in the marketplace, you need to dig in much deeper. That starts with setting up a formalized process for collecting feedback from your new and past customers, which is often referred to as Voice of the Customer research.

For example, Intel Consumer Electronics credits its Voice of the Customer research program for helping drive the innovation and design improvements that redefined their customers’ digital experiences. Its top researchers detail their methodology on the company’s website if you want to see how a large corporation handles the process.

Intel, of course, has access to virtually limitless resources and capital. So how would a startup or expansion stage business accomplish something like that? Truthfully, the basic steps that Intel took can be scaled down to suit smaller technology companies with more limited time and resources.

Creating a Voice of the Customer research program:

1. Divide your customer list into customer types

For example, create categories like new customers, present customers and lost customers. From those categories, put together a database that contains each company’s demographic, industry and geographic information.

2. Identify the appropriate contact

Once your customer types are divided into separate lists, you’ll need to acquire contact information for the most relevant person at each company. Generally, this will be the lead procurement person or the account manager.

Identifying the right contact is crucial. Smaller expansion stage companies can’t afford to waste time analyzing irrelevant feedback. As a recent report by customer research firm The Temkin Group points out, detecting the right survey participants is the first – and arguably most important – step in a Voice of the Customer research program.

3. Develop a survey

This step will help you learn about the new and lost customer segments. For the new customer survey, it’s important to collect the following information:

  • Previous Service Provider/Product Information
  • Final ranking of products they were choosing between (i.e. top 3 in ranking order)
  • Top 3 reasons why they chose your product/service

For the lost customer survey, collect the following information:

  • Whose service/product are they currently using?
  • Final ranking of products they were choosing between (i.e. top 3 in ranking order)
  • Reason why they chose to leave your service or quit using your product

4. Select a stratified sample of your customers

In each customer category, make sure that your stratified sample includes sufficient representation across industries, geographies, and sizes. Once that’s done, then implement your survey.

5. Merge the results

After the survey is performed, merge the results from each survey with the company demographic and geographic data.

6. Identify characteristic and demographic patterns

Understanding the characteristic and demographic patterns in the lost and won customer groups will teach you more about who your top customer segments are. Hopefully, this will validate your current market positioning strategy.

7. Identify your most frequent competitors

For each customer segment, you can use the customer feedback from the new and lost customer surveys to identify which companies you’re competing with most frequently. With that, you can strategize how to keep your top customers away from key competitors.

So, there you have it. Follow those steps and you should be well on your way to better understanding your top customers and competitors.

If you have a few minutes, read this post by Jeffrey Henning, which highlights the top seven Voice of the Customer research trends for 2011.

It’s important to remember that the marketplace is continually evolving, so you should implement a continuous tracking survey system and keep up on the best feedback collection methods. That way, you’re always operating with up-to-date information on the customers you’re losing and winning.

Photo by: Meena Kadri

Brandon Hickie
Brandon Hickie
Marketing Manager, Pricing Strategy

Brandon Hickie is Marketing Manager, Pricing Strategy at LinkedIn. He previously worked at OpenView as Marketing Insights Manager. Prior to OpenView Brandon was an Associate in the competition practice at Charles River Associates where he focused on merger strategy, merger regulatory review, and antitrust litigation.
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