Tuesday, July 14, 2009

The Fallacy of Voice of the Customer by Dr. Phil Samuel

Revenue and profit growth is at the top of the agenda for most corporations. Growth is primarily achieved through either mergers and acquisitions or organic means. Innovation is the key approach to drive organic growth. However, the process of innovation and organic growth has been considered messy, risky, and unpredictable. We know that organic growth is achieved by creating a new value proposition for customers with unmet needs. Within the last few years, companies have placed greater emphasis in collecting voice of the customer (VOC) data to accelerate their innovation efforts. In spite of all the advances made in voice of the customer research, companies still bring products and services to the market place that ultimately fail.

While customers have a key place in formulating our innovation strategy, many voice of the customer gathering processes are flawed or misdirected. Most companies and customers are good at articulating what they are familiar with, which leads then to focus on the functions of the existing products and solutions. As such, the literal voice of the customer usually centers on the useful and harmful functions of existing solutions. For example, let’s say that a lawn mower manufacturing company decides to conduct a focus group to gather the voice of the customers. These customers are likely to tell the lawn mower manufacturer that they need to make the lawn mower more fuel efficient, easier to push, less noisy, less polluting to the environment, easier to maintain, easier to store, occupy less space, cut grass faster and uniform, and weigh less. Sophisticated customers might indicate that they would like to see lawn mowers in different colors and styles that appeal to human emotions. On the surface, these would appear as true customer needs based on the voice of the customer (VOC).

On the other hand, if we ask the lawn mower customers why they are using lawn mowers, they are likely to answer that it is for cutting grass. If we ask them again, why they need to cut grass they are likely to say that it is for keeping the grass beautiful. The reason for keeping the grass beautiful could be to have aesthetically pleasing surroundings, conform to Homeowner’s Association regulations, or to increase the value of their home. While most lawn mower companies such as Honda and John Deer are focused on improving the lawn mower, another company is working on eliminating the need to cut grass. They are trying to bring about a new generation of S-curve to satisfy the need of keeping the grass beautiful without the need for mowing it regularly. It is interesting to note that most incumbent businesses are not good at commercializing the next generation of S-curve. It was not the candle companies that commercialized the light bulb nor did slide rule companies commercialize the calculator. The failure is not because the incumbents are not collecting the voice of the customers, they are not focusing on the underlying customer need. Professor Ted Leavitt of Harvard Business School once said, “People who buy power drills don’t necessarily want to buy a quarter inch drill. They want a quarter inch hole”. The underlying customer need is called a Job To Be Done. A Job to Be Done is the reason customers are hiring or using our products and solutions. Companies good at innovating, always focus on this higher purpose (called Job to Be Done) for which their customers buy products, services and solutions.

So do we stop collecting voice of the customers? The answer is no, instead we should convert customer’s input into useful information regarding what job they are trying to get done and their success criteria. If we analyzed what lawn mower customers are telling the provider, most of their voices are regarding success metrics regarding how they want the job done. When customers say that they would like more fuel efficiency from their lawn mower, they are implying that they would like to minimize the use of resources (such as fuel) when getting the job done called “cutting grass”.

This input, along with others can be used more effectively to innovate the method of cutting grass. In the long run, the provider must think of eliminating this job altogether and move up the chain and address the higher purpose called “keeping the grass beautiful”. Otherwise, somebody else stands to disrupt our business by moving ahead of us.

2 comments:

Graham said...

Very true (and very important), but hardly new: about a hundred years ago, Henry Ford said
"If I had asked people what they wanted, they would have said 'faster horses'".

Scribbett said...

Hi Phil,

Great article, but for me what it highlights is the need for business to invest in the best possible human skills, such insight, research and design, and not just rely on technology to gather up and disseminate the Voice of the Customer alone.

We (Youmeus) are one of a number of companies that combine leading-edge web technology with traditional research and design skills to spot the latent and unarticulated needs of consumers, and turn these into actionable insight.

Stephen Cribbett
stephen@dubstudios.com

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