More often than not, organizations start out with high expectations for a successful market launch, only to find that the results fall short of goals. A seemingly innovative idea fails to attract customers and never reaches its projected sales. A product worked brilliantly in a research laboratory, but fails to reach the target market. A seemingly disruptive technology is surpassed by the competition shortly after it is launched. All three of these common, underperforming product launches have a common theme: The companies failed to adequately understand their target market, customer needs, their own capabilities and the process required to launch the right product at the right time to the right customer.
Most successful companies have cultures anchored on listening to their customers on a continuous basis. The constant feedback strengthens their market knowledge, helps them understand more about their own capabilities, and provides a feedback that enables continuous process improvement. Through analysis and reflection, comes direction. When a company clearly understands their target customers’ drivers and needs, it becomes easier to spot and respond to market issues and opportunities. Market development for these companies is not a budget line item, nor a program flanked on the front-end of a product launch. Rather, it is a core value that drives a continuous, evolving process focused on the customer.
Understanding and Capturing Customer Feedback
In general, companies understand the value of customer feedback. Unfortunately, merely valuing customer feedback is not enough to drive success. It is critical to understand how to collect customer data, analyze it, and apply the lessons to one’s own strategy and product management. This is where many organizations fail. They simply do not know how to conduct customer feedback studies or they lack the bandwidth.
An example of a customer feedback study is a process known as the “Voice of the Customer” (VOC). A VOC is primary market research conducted by collecting direct feedback from target customers within a defined market segment to provide insight into key areas that include:
- market trends,
- customer needs,
- customer requirements,
- product requirements and
- product life cycle management.
One type of VOC is the conjoint analysis, which is a statistical technique used in market research to determine how people value different attributes (feature, function, benefits). There are a few different methods for conducting VOCs, but generally they are accomplished via direct interviews with target users. The first steps are developing a standardized questionnaire and collecting feedback from the target customers. The format may be a live or phone interview, a survey via the internet or professional network.
The VOC study design is critical in order to draw valid conclusions. Many companies don’t know how to structure the questions in a VOC. It is important that the survey include both qualitative and quantitative measures in order to obtain a holistic view of the customer experience. Care should be taken in framing the questions. For example, using leading questions or using only closed probed questions does not allow insight or follow up questions for higher gains. Other common errors include small study size, focusing on a specific subset of the market (e.g. U.S. customers for a product intended to be sold internationally), and not building redundancy into the study to crosscheck data points and add confidence to the data. If a customer consistently answers three questions on cost in a similar way, but the questions each have different approaches, one would have confidence that the customer’s cost needs are captured.
Properly capturing customer input with confidence is critical for a successful product.
For example, in the In Vitro Diagnostic Industry (IVD), it can take two to four years and millions of dollars to develop a product. Proper VOC allows companies to establish user needs and requirements. Getting this right means the product will be approved by the FDA and accepted by the customer. On the other hand, poorly defined user needs often cause delays with the FDA and poor acceptance by the customers.
VOC and a market driven culture are critical for commercial success. It starts with listening to the customer, understanding how to develop the input-gathering methods, collecting the data, analyzing the data and applying that analysis into a business strategy. It is that foundation that will feed into continuous process improvement, more innovative products, shorter development paths, higher launch success rate, and ultimately preparing your organization for growth.
