Voice of the Customer
- 1. Customer-Inspired Design: Applying Voice of the For further information, please contact: Customer to Improve New Stan Baginskis, Principal Tel: (650) 864-3505 Product Success Rates Email: sbaginskis@prtm.com Ari Shinozaki, Principal Tel: (650) 864-3582 Email: ashinozaki@prtm.com Alex Blanter, Principal July 19, 2003 Tel: (415) 764-3404 Email: ablanter@prtm.com www.prtm.com Pittiglio Rabin Todd & McGrath
- 2. Workshop objectives Understand key best practices in customer needs acquisition and requirements definition and how to structure a Voice of the Customer (VoC) project Review VoC techniques and their use in gathering needs and converting them into requirements for a project Conduct a brief workshop to practice selected tools and techniques © Copyright 2003 Pittiglio Rabin Todd & McGrath 1 9052MV / 07/17/2003
- 3. Today’s agenda Start Time 1 Introduction 9:30 a.m. Using the “Voice of the Customer” to drive 2 successful new products 9:40 a.m. 3 Principles of PRTM’s VoC 10:10 a.m. “Redesigning Product Development*” 4 (L.L. Bean Using VoC techniques) 10:30 a.m. 5 VoC Workshop 10:45 a.m. 6 Additional resources 12:15 a.m. © Copyright 2003 Pittiglio Rabin Todd & McGrath 2 9052MV / 07/17/2003
- 4. Introduction PRTM is recognized globally as the leader in helping technology-based businesses achieve superior performance in their core operational processes
- 5. PRTM is a worldwide organization dedicated to achieving measurable results for our clients Focus Glasgow PRTM was founded in 1976 with Oxford • a unique focus • • • Frankfurt Paris • Core business processes Chicago Detroit • Tokyo San Francisco • • • Waltham • Stamford • “Results, not reports” Mountain View • • Costa Mesa • • • Washington DC • Technology-driven companies Dallas Experience More than 1,200 satisfied clients • Over 6,000 successful implementation projects • 90% level of repeat business Industry Knowledge Client Profile Aerospace and Defense Start-up Depth Automotive and Industrial Over $1B More than 450 consultants Computers and Electronic Equipment Financial Services Under • Technical backgrounds with $100M practical experience and MBAs Life Sciences $100M Retail and Consumer Goods to $1B from top schools Semiconductors • Low staff/director ratio with Software significant director involvement Telecommunications/Internet in all projects © Copyright 2003 Pittiglio Rabin Todd & McGrath 4 9052MV / 07/17/2003
- 6. PRTM practice areas address all core business processes Operations Marketing Customer Information Business Product and and Service and Technology Strategy Development Supply Chain Sales Support Solutions Management Strategy, Organizational Design, and Interim Management IT Strategy Business Process Assessment, Design, and Implementation IT Operations Economic Modeling, Benchmarking, Research, and Due Diligence System Selection Program Management, Change Management, and Team Facilitation IT Implementation Co-Development, Partner Management, and Outsourcing IT Outsourcing Business-Aligned Technology Implementation © Copyright 2003 Pittiglio Rabin Todd & McGrath 5 9052MV / 07/17/2003
- 7. Your perspective… What is your interest in this practice? What are your expectations for today’s session? © Copyright 2003 Pittiglio Rabin Todd & McGrath 6 9052MV / 07/17/2003
- 8. Using the “Voice of the Customer” to Drive Successful New Products
- 9. Complex companies have unique strategy, product, service, marketing, and sales challenges… If we were to look at the most critical list of issues companies face, the following items would certainly be near the top Mistaking “customer experience” for “customer value,” thus creating an outstanding experience for customers who remain vulnerable to competition because the value of the services is perceived as weak Lack of information to leapfrog the competition by developing products, services, or strategies customers love, but would never have thought possible Misunderstanding of the customer’s buying preferences or supplier requirements one level away from the vendor Fear of commoditization and lack of information and analysis skill to determine if current strategic actions will reduce or increase commoditization Lack of a clear strategic focus that creates boundaries for service or product design, packaging, selling, and delivery Misunderstanding the policies, procedures, systems, and information that are needed to produce the best supply chains or internal operations © Copyright 2003 Pittiglio Rabin Todd & McGrath 8 9052MV / 07/17/2003
- 10. …that require customer input for success Management needs ideas and continuous feedback from Customers customers to stay relevant Solution Delivery Organizations align Product organizations must have many services, Sales, market-leading strategies for their channels, and Channels, Marketing & products marketing campaigns Customer Services Solution delivery organizations (e.g., & Support Operations channels or unrelated partners) need to represent value effectively Customer Links to Customer Input to Sources of customer information Service/Product Operating (e.g., CRM systems, customer Development Departments inquiries, sales input, trouble reports) are seldom integrated with timely customer input on a specific development project Manufacturing, Delivery, and Channel Management Large customers of one operating company may be insignificant customers of another operating company, thus setting up R&D, Product Management, Development inconsistent treatment and loss of customer loyalty © Copyright 2003 Pittiglio Rabin Todd & McGrath 9 9052MV / 07/17/2003
- 11. However, most companies listen to their customers in a haphazard and non-repeatable way They decide to They gain customer They generate develop products insight once the products great ideas or services are in the market The company A particular customer They see what the develops a product or demands a really great idea service to meet those specific solution could have been… demands © Copyright 2003 Pittiglio Rabin Todd & McGrath 10 9052MV / 07/17/2003
- 12. Best practice companies employ a more robust approach called Customer Inspired Design (CID) They generate They transform concepts that well grounded, address well designed S-QFD customer Markets Compet Concept concepts into requirements A B C D E A B C D E winning 1 2 3 4 5 They dive into their Customer Requirements solutions customers’ current – C1 (often in use environment and They translate – C2 conjunction learn about problems customer insight – C3 with lead firsthand—from their into an image of Business customers) customers’ the customers’ Requirements perspective context and into They select the customer concepts that best meet requirements both customer needs and company capability © Copyright 2003 Pittiglio Rabin Todd & McGrath 11 9052MV / 07/17/2003
- 13. Best practice companies employ a more robust approach called Customer Inspired Design (CID) Continued Category Customer-Inspired Design implementation Customer-Inspired FOCUS Customer-Focused Design Design Thoroughness and +++ ++ + rigor of the analysis Recommended New platform Derivative product Product application New product Narrow technical improvement New market solution opportunity Key characteristics Thoroughness of Targeted towards Intended for thinking obtaining explicit situations where Potential for customer customer discovery latent user requirements requirements are requirements Abbreviated metrics known or reside in customer-facing personnel Time to complete a 3 – 4 months 2 – 3 months A few weeks project © Copyright 2003 Pittiglio Rabin Todd & McGrath 12 9052MV / 07/17/2003
- 14. CID implementation may take various forms to suit specific company needs Situation Customer-Inspired Design implementation Outcome New Platform or Product/ Service Significant & innovative— CID potentially breakthrough Derivative Customer Product delighting extension FOCUS On-target Narrow particular Technical solution Solution Product Improved Improvement product out quickly CFD © Copyright 2003 Pittiglio Rabin Todd & McGrath 13 9052MV / 07/17/2003
- 15. The core of any CID implementation is a technique of Voice of the Customer… …a formal approach to gather and synthesize customer requirements Voice of the Customer approaches… Our experience goes back to 1992, Are designed for exploratory customer and we have a track record of requirements research satisfied clients Structure the “fuzzy front end” of market and We provide a best practice framework to product development requirements gathering identify the winning customer requirements Ground internal professionals in external realities We facilitate the design of responsive solutions based on facts Assure disciplined, focused thinking Tap the intuitive knowledge of experienced We integrate the requirements process into professionals—their experience allows them product development to see what market researchers cannot Proactively identify explicit and latent For companies that know how to develop customer needs products the right way, PRTM helps them Facilitate a thorough exploration of potential develop the right products and achieve their options that are created in response to clearly target market share and price levels articulated needs Self-document the teams’ thinking and decision making Align diverse individual perspectives to a common understanding © Copyright 2003 Pittiglio Rabin Todd & McGrath 14 9052MV / 07/17/2003
- 16. We’ll use some terms today that we should all use in the same way “A Customer” = any expert, buyers, channel member, influencer, specifier, who has information to add knowledge about a subject “VOICE” = an actual quote captured directly from an individual, usually in a face-to-face meeting Need: A problem, concern, or issue, either stated or latent, that a “customer” has, which can be translated into a “requirement” Requirement: A statement, aligned directly to a “need”, and having specific content on which service or product development can base a decision © Copyright 2003 Pittiglio Rabin Todd & McGrath 15 9052MV / 07/17/2003
- 17. One of the key VoC applications is to collect customer requirements for new product development PRTM created a unique VoC toolkit that integrates into the front end of product/service development Concept Phase Definition Planning Development Launch Validate Develop Understand Requirements Concepts to Customer and Concepts Meet Customer Requirements and Select Final Requirements Solution(s) Iterate with customers, refine solutions, and listen/respond actively during launch © Copyright 2003 Pittiglio Rabin Todd & McGrath 16 9052MV / 07/17/2003
- 18. How comprehensively you use the VoC to document customer requirements depends on the situation Steps and ate me r rst xt nsl s usto m’ts ate y ate n t n it de Tra oice C uire t ener cs rve Cre tions ree Tes ept elec t Pl a Vi s Un onte V q h G etri Su lu Sc c S C Re Insig So n Situation M Co Outcome Plan Major New Innovative, Product or Perhaps Break- Platform through Derivative Customer- Leverage Delighting prior Extension context work ( ) Narrow On-Target Technical Technical Solution Solution or Routine Continuous Input Customer Improvement from Inspired Improve- of Existing sales & ments service © Copyright 2003 Pittiglio Rabin Todd & McGrath 17 9052MV / 07/17/2003
- 19. To summarize, PRTM’s VoC approach captures needs and converts them to requirements VoC is a methodology that is based on using actual quotes captured directly from customers Usually in a face-to-face meeting, but also by phone, and through some new technology-assisted methods From anyone whose interest you represent or whose perspective can add value to your understanding VoC is a process that allows a company to: Structure the “fuzzy front end” of strategic thinking, discovering new markets or new market opportunities, product or service development, or understanding supply chain problems Ground internal professionals in external realities Assure disciplined, focused thinking Tap the intuitive knowledge of experienced professionals—their experience allows them to see what market researchers cannot Proactively identify explicit and latent customer needs Facilitate a thorough exploration of potential solutions—that are created in response to clearly articulated needs Self-document the teams’ thinking and decision making Align diverse individual perspectives to a common understanding © Copyright 2003 Pittiglio Rabin Todd & McGrath 18 9052MV / 07/17/2003
- 20. Principles of PRTM’s VoC
- 21. Several important principles underpin PRTM’s process for collecting and using the VoC to design products 3. Processing 1. Developing a 360° View 2. Understanding Context Language Data AHA!! 5. Recognizing “By 6. Partnership Fostering 4. Trusting Your Intuition Chance” Opportunities Ownership Adapted from Center for Quality of Management © Copyright 2003 Pittiglio Rabin Todd & McGrath 20 9052MV / 07/17/2003
- 22. 1. Developing a 360° View Means… Beginning with an attitude of exploration Viewing the issue of interest from many angles Collecting a diversity of perspectives Staying open to discovery Resisting testing one’s own hypothesis Adapted from Center for Quality of Management © Copyright 2003 Pittiglio Rabin Todd & McGrath 21 9052MV / 07/17/2003
- 23. 2. Understanding Context Means… Swimming in the fishbowl— viewing products and services from the vantage point of your customers Understanding customer problems firsthand Collecting real experiences, capturing anecdotes, and stories 12 20 95% % of new data 70% # of visits Adapted from Center for Quality of Management Griffin & Hauser © Copyright 2003 Pittiglio Rabin Todd & McGrath 22 9052MV / 07/17/2003
- 24. 3. Processing Language Data Collecting real experiences, capturing anecdotes and stories from customers translates to “language data” The nature of language (qualitative data) is that it is often open to multiple meanings, multiple interpretations We tend to bring our own experiences to language we take in Therefore, the tools used in our processes enable a group of individuals to work with language in a way that facilitates coming to common understanding of the language data © Copyright 2003 Pittiglio Rabin Todd & McGrath 23 9052MV / 07/17/2003
- 25. 4. Trusting Your Intuition Means… Focusing the excellent thinking and intuition of your internal experts; their intuition is born of their years of experience in their domain of AHA!! expertise, your industry, and your company “It is by logic that we prove, but it is by intuition that we discover.” – Poincaré Copyright Center for Quality of Management © Copyright 2003 Pittiglio Rabin Todd & McGrath 24 9052MV / 07/17/2003
- 26. 5. Recognizing “By Chance” Opportunity Means… Clear innovation chartering enables team members to notice relevant input/ideas/solutions as if “by chance” “…chance favors only those minds which are prepared.” – Pasteur Copyright Center for Quality of Management © Copyright 2003 Pittiglio Rabin Todd & McGrath 25 9052MV / 07/17/2003
- 27. 6. Partnership Fostering Ownership Means… Each team member’s tacit knowledge becomes more explicit and shared Each team member experiences the customer’s world firsthand Team members create insight with others who share responsibility Deciding together what the solutions should be usually means more commitment for implementation Copyright Center for Quality of Management © Copyright 2003 Pittiglio Rabin Todd & McGrath 26 9052MV / 07/17/2003
- 29. Video “Redesigning Product Development*” (L.L. Bean using the process) * Reference: Harvard Business School Publications (800) 988-0886 © Copyright 2003 Pittiglio Rabin Todd & McGrath 28 9052MV / 07/17/2003
- 30. Workshop Introduction Exercise 1: Planning a VoC Project Exercise 2: Conducting Customer Interviews Exercise 3: Developing Customer Requirements
- 31. Case — Developing a next-gen “carrier” for the business traveler You are the hand-picked lead for helping Carry Co develop a next- generation product line for business travelers Carry Co makes a line of traditional suitcases and travel bags Carry Co has a standard and well received line of laptop bags and carry-on luggage models If the other big names in luggage have it, we have it You have a cadre of excellent industrial designers, materials experts, manufacturing experts, market researchers, and the like You’ve recently had brainstorming sessions, but all the products end up looking like variations of “me-too” luggage and bags You’ve thought about it, and realized that you are just solving the problems business travelers you already know about, but you haven’t really hit on a problem that has never been solved or even considered before… If you can get some really interesting “new” customer problems in front of your team, you know they will execute… …and your star will continue to rise © Copyright 2003 Pittiglio Rabin Todd & McGrath 30 9052MV / 07/17/2003
- 32. The focus of the workshop will be on three critical VoC elements Steps and ate r me ate rst xt nsl s usto m’ts ate y ree n t t Pl a n Vi s it de Un onte Tra oice C uire t ener cs Su rve Cre tions Sc Tes ept elec V q h G etri lu n c S Situation C Re Insig M So Co Outcome Plan Major New Innovative, Product or Perhaps Break- Platform Through Derivative Customer- Leverage Delighting prior Extension context work ( ) Narrow On-Target Technical Technical Solution Solution or Routine Continuous Input Customer Improvement from Inspired Improve- of Existing sales & ments service © Copyright 2003 Pittiglio Rabin Todd & McGrath 31 9052MV / 07/17/2003
- 33. Workshop Introduction Exercise 1: Planning a VoC Project Exercise 2: Conducting Customer Interviews Exercise 3: Developing Customer Requirements
- 34. A Project Plan includes Project Participants Project Purpose Objectives for Learning Company Fit Remaining Questions (for Sponsors) Sources of Existing Data Customer Profile Matrix Interview Guide(s) (Observation Guide) (Project Schedule) List of Materials to take on Visits Source: The Planning Approaches come from Voices into Choices: Acting on the Voice of the Customer, Gary Burchill and Christina Hepner Brodie, Joiner, 1997 © Copyright 2003 Pittiglio Rabin Todd & McGrath 33 9052MV / 07/17/2003
- 35. Example: Project purpose To explore the experiences of business travelers relative to what they carry with them on a daily basis in order to design, develop and deliver optimal solutions profitably for the next generation of personal carriers for the business traveler © Copyright 2003 Pittiglio Rabin Todd & McGrath 34 9052MV / 07/17/2003
- 36. Example: Objectives for learning To learn from their stories of past and current experiences To understand what they typically carry To understand how they typically transport what they need To understand their problems and challenges with: What they carry How they carry it Where they carry Where they store Specific challenges relating to travel To better understand how they acquire business accessories To explore their individual purchasing experience: To learn about where and how they shop To explore their criteria for decision making regarding carrier selection To explore their vision of the ideal carrier © Copyright 2003 Pittiglio Rabin Todd & McGrath 35 9052MV / 07/17/2003
- 37. Which customers to visit? Consider both traditional and non-traditional segments… Examples: Traditional Examples: Non-Traditional Type of industry or sector Type of industry or sector Lead users or thinkers Lead users or thinkers Large volume vs. medium or low Large volume vs. medium or low Happy customers Happy customers volume users or purchasers volume users or purchasers Demanding customers Demanding customers Application of product Application of product Dissatisfied customers Dissatisfied customers Location in customer chain: Location in customer chain: Customers you had, but lost Customers you had, but lost Distributor, purchaser, user Distributor, purchaser, user Customers you never had Customers you never had Geographic location: Region of the Geographic location: Region of the Leading researchers, both Leading researchers, both country; continent; urban vs. country; continent; urban vs. academic and corporate academic and corporate suburban suburban Culture differences Culture differences Gender Gender Demographics Demographics © Copyright 2003 Pittiglio Rabin Todd & McGrath 36 9052MV / 07/17/2003
- 38. After considering the potential segments, organize them in a Customer Profile Matrix Non-Traditional Segments Traditional Segments Other dimensions to consider: The matrix frames the discussion: The matrix frames the discussion: Which diverse set of 20 interviews will Which diverse set of 20 interviews will deliver the 360°° view? deliver the 360 view? © Copyright 2003 Pittiglio Rabin Todd & McGrath 37 9052MV / 07/17/2003
- 39. Workshop Introduction Exercise 1: Planning a VoC Project Exercise 2: Conducting Customer Interviews Exercise 3: Developing Customer Requirements
- 40. Interview preparation — Key guidelines Interview objective is to immerse yourself into your customer’s environment… … and to observe, observe, observe Start with broad topics and then narrow to your area of interest — use a “stepping stones” approach Although you may want some general information about the interviewee’s business, do not dwell on it; quickly bring the discussion to your main area of interest Allot certain amount of time to each section of the guide and stay on track Probe and actively listen to get to the true underlying needs Prepare to ask open-ended questions using phrases such as: “Describe…”, “How…”, “What do you mean by…” e t iv g Ac enin is t Pro bin g L Avoid questions that – Elicit a single-word answer — yes/no questions Underlying Needs … – Seem to anticipate the “right” answer” – “don’t you agree…” Do not consider the interview guide to be a “script”; it is only a guide © Copyright 2003 Pittiglio Rabin Todd & McGrath 39 9052MV / 07/17/2003
- 41. Sample Interview Guide When you envision yourself traveling for business, what images come to mind relative to what you carry? (or tell me a story about your worst experience relative to using your current briefcase) Describe the ways you use your briefcase in your daily routine What benefits do you experience relative to what you currently use? What are the problems or disappointments you have experienced? If you were to think about trying a new carrier, what would your considerations be? (or describe your process when you acquired your current …) Pretending that you knew nothing about current briefcase or computer case design, and that there were no design constraints, describe the perfect solution for your routine needs … Why would that be such a good solution? © Copyright 2003 Pittiglio Rabin Todd & McGrath 40 9052MV / 07/17/2003
- 42. Workshop Introduction Exercise 1: Planning a VoC Project Exercise 2: Conducting Customer Interviews Exercise 3: Developing Customer Requirements
- 43. We distinguish terminology related to requirements Customer Voice: A direct quote from the verbatim notes of a customer interview; it might be a word, a sentence fragment, a sentence, or a passage. The chosen voice contains the seed of a customer requirement Customer Requirement: A sentence that describes the need/issue/problem that needs to be solved from the customer’s vantage point Product Requirement: A sentence that describes the functionality of the product that will solve the customer’s problem Product Specification: The specific technical solution(s) and performance targets for a given product requirement © Copyright 2003 Pittiglio Rabin Todd & McGrath 42 9052MV / 07/17/2003
- 44. Key themes and supporting voices — Our example I like to put my keys and sunglasses Sometimes I carry my laptop, and in two outside pockets sometimes I need to carry awkwardly shaped samples It has to be small Not expensive, but tasteful © Copyright 2003 Pittiglio Rabin Todd & McGrath 43 9052MV / 07/17/2003
- 45. Customer Requirement Guidelines Requirement Statement Criteria 1. Identify a functional need, not a solution A functional need tells what the solution should do; a solution tells how it should be accomplished 2. Be as specific as possible Abstract or vague terms allow for multiple interpretations 3. Use multi-valued language Allows for a requirement to be measured along a scale 4. Phrase the statement in positive language The word “not” indicates a weakness- oriented requirements statement © Copyright 2003 Pittiglio Rabin Todd & McGrath 44 9052MV / 07/17/2003
- 47. Media Resources Books: Voices into Choices: Acting on the Voice of the Customer Gary Burchill and Christina Hepner Brodie (1997 Joiner) Setting the PACE® in Product Development: A Guide to Product And Cycle-time Excellence Michael E. McGrath, Editor (1996 Butterworth-Heinemann) Focus: Cross Functional Project Excellence, Pipeline Management and Technology Management Product Strategy for High-Technology Companies, 2nd edition Michael E. McGrath (2000: McGraw-Hill) Focus: Core Strategic Vision, Planning and Managing Platforms, Portfolio Management and Product Line Planning Video: “Redesigning Product Development” Harvard Business School Publications (800) 988-0886 Articles: “Invigorating Strategy with Voices of the Customer”, by Christina Hepner Brodie, Insight, Summer 2000 “Beyond Product Development: Creating a Process That Drives Innovation”, by Thomas J. Lenk, Aritomo Shinozaki, and Christina Hepner Brodie, Medical Device & Diagnostic Industry, November 2000 © Copyright 2003 Pittiglio Rabin Todd & McGrath 46 9052MV / 07/17/2003