For those of us who are deeply involved with online marketing research, it may appear that the proliferation of Voice of the Customer (VoC) programs is exploding these days. However, recent Forrester’s research found that 56% of the executives they surveyed were not aware of any formal VoC program in their companies. One of potential explanations to this discrepancy may be the fact that many companies conduct localized, departmental initiatives that are not visible to the rest of the organization.
Indeed, an amount of online surveys I am bombarded every day is staggering. It seems that people who designed every website I stop by want to know my opinion… even before I had any time to form one. Availability of inexpensive and easy-to-use technology for conducting online surveys is not a good excuse for harassing your site’s visitors to collect “short” and “easy” response to the closed-ended questions structured on a scale of 1 to 5.
There are 3 reasons why an inadequately administered survey is harmful to your business:
Popup surveys reduce visitor engagement with a site, and therefore promote high bounce rate.
Many people commenting about their site user experience are complaining about the timing of these interruptions and their inability to respond to posed questions at a time they are being posed. Timing the request to allow a customer to experience your product or service would provide more meaningful reaction and responses.
Questions that do not align with customer’s experience and perspective do alienate the customers.
The closed-ended questions you pose to your customers may be very important to you and your company. However, if answering them does not provide any value to the responder, why would they want to waste their time? It is much better to provide generous space for comments and reflections of their experience from their perspective, and let them tell you what elements of this experience are important to them. Make it easy for them to say what they want to, not what you want to hear. They are not in the business of validating your assumptions.
Customer Feedback that does not result in action is a waste of time – yours and your customer’s.
A disconnect between cause and effect explains low participation of voters in a political process. Customers want to help you improve your product or service and will provide you with clues to how to do it, if you “listen”. There are tools available for automated processing of unstructured customer comments and reviews that are called Opinion Mining platforms. Use them to help you discover the insights into their experience. You can get results within 24 hours. Let the customers know that their efforts are not wasted. Communicate back what you have learned from them and what actions you plan to take in an effort to improve their experience.
Social media monitoring quickly becomes a “commodity” with hundreds of companies’ rummaging through fire hose streams of communications published, re-published and re-tweeted every second of a day. Brands want to know what people think about them and are prepared to pay for this knowledge. But why is this so? What is the value of knowing that people communicate a positive sentiment about your brand today?
I would speculate that most companies make this investment without specific strategy or process on hand, and some companies do it to manage the reputation of their brandsor in other words, to do PR damage control and risk mitigation. A very few do so to systematically improve their customers’ experience.
Most of Social Media chatter has relatively low value for opinion mining efforts, which need to be given attention if you want to extract actionable knowledge for systematic change.
Furthermore, it is important to understand the differences between the types of communications that use Social Media channels:
People often refer to Word of Mouth (WOM) in Social Media as a buzz and focus too much on technology at the expense of the appropriate targets, actions and measurements.
The Voice of the Customer (VOC) is a subset of WOM that can be directly attributed to the customers of your product. It is very similar and as valuable as, if not more valuable than, customerfeedback collected by many companies through their “walled garden” channels at a great expense.
The opinion mining operation that is focused on the Voice of the Customer “ore” delivers significantly higher yield compared to the overall Social Media buzz in terms of actionable knowledge. It is possible because it provides a very close correlation to specific products and often describes holistic customer experience with these products. I refer to “holistic customer experience” in the context of the customer’s effort required to achieve a desired outcome. An example of a desirable outcome is a new roof for the house or a quality audio experience while exercising in a gym.
We consider all steps – from the initial purchase research to the selection, purchase, delivery and setup, and to a completed realization of the desired outcome – measure it as a difference between the customer’s expectations and their perception of reality (their actual experience). Examples of VOC “ore” include—in ascending order—customer forums, blogs and customer reviews published online.
Recent Forrester’s research found that 14% of executives surveyed said that their companies don’t solicit customer feedback at all, while 56% of the respondents said—or were not sure if—their companies do not have a formal VOC program. However, the most shocking finding is that nearly one out of every four executives said that they seldom or never use customer feedback to change a business process (source:http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=142811).
The Temkin Group research identified it as the one of Top 10 Customer Experience Incompetencies, as shown in the table on the left.
There is a good reason why so many companies find it difficult to mine Social Media for improving customer experience: most content generated by customers is unusable by corporate information systems that are built to process structured data.
The following steps have to be taken to address the big challenge of translating seemingly anecdotal evidence into a scalable, corporate process:
Aggregation, capture, cleansing and authentication of Voice of Customer data
Conversion of this data into structured information
Alignment of this information with corporate targets, i.e. conversion of this information into corporate knowledge
Integration of that knowledge into existing, repeatable business process.
The discussions on importance of innovation are all over Social Media. The calls for innovating ourselves out from the current economic malaise are coming from the President of Consumer Electronics Association to the President of the United States. In the words of Louis XIV (or was it Mel Brooks?) – “It’s good to be the King!” – for the rest of us it would be helpful to put some definitions around these terms. I do not pretend to be an expert on the subject of innovation, but I like to be specific and want to offer some ideas for discussion.
So what differentiate commercially successful product or service from the innovation?
I would like to propose that successful products gain market traction, meet their sales forecasts and generate anticipated profit margins. Innovative products re-shape the market place, create new categories, and generate blockbusting profits. Innovative products successfully defeat the competitors’ assaults for long periods of time.
Development and introduction of successful products or services is a very challenging and risky endeavor, as we are well aware.
The Recent Portfolio Management Benchmark Survey sponsored by Planview, reported that only 52.3% of products meet with commercial success, while 21.2% were “killed prior to launch”. They did not specify the type of products or industries covered by this survey, but my personal experience pegs the success ratio well under 40% mark.
The risk level for innovation is even higher. It is estimated that only 1 out 3,000 new innovative ideas becomes a commercial success. We also know that most innovative products rarely have anything to do with technological inventions, but have everything to do with the scale of market adoption. Peter Dreker, the father of modern Management Science, wrote in his book “Innovation and Entrepreneurship”, that a 15 year “gestation” period is the average time observed between the time of an original invention and the time of its commercial realization.
We all know examples of such innovations as Ford T, Microsoft Word, iPod and iPad to name a few that dominated and still dominate their product categories. These are very different products, however the thought process, methods and techniques of the people who are behind the creation of these products, are a mystery we want to discover.
I would like to propose that the key difference between really good Product Managers and the Innovators is in a way they perceive and understand the markets they target.
While a Product Manager segments the markets in terms of demographics or personae for which they develop a product, an Innovator is focused on the Customer Experience of people, who struggle to use existing products to do their chores, and interprets these struggles into the definition of innovative vision for new generation products.
In other words they concentrate on improvement of EXPERIENCE as oppose to improvement of a PRODUCT.
There is a heated debate in a Product Management community about the Role of Market Research in creation of innovative products and I have mused on this subject earlier on this blog.
Product managers, who subscribe to a “thought leadership” (as oppose to “customer participation”) model, love to quote Henry Ford who supposedly said – “If I asked my customers what they want, they simply would have said a faster horse.” The “customer driven innovation” camp proponents are swearing by Customer Feedback and Voice of Customer based methodologies. However there is no clear evidence that either site consistently out-innovate their opponents.
During this webinar we will explore and analyze traditional methods of product definition process, their limitations and their applications that often lead to incremental improvements as oppose to true innovation. We will talk about
What separate a successful product from INNOVATIVE product
What are differences between a Product Manager and a Star Product Manager , and
How the knowledge of the market helps to close the gaps between the two.
The Playbook introduction caused a lot of controversy well before it was actually released with speculations about its battery life problems wildly spread all over internet. The decision to go with its proprietary operating system was also met with a lot of criticism in social media. However since the Playbook started shipping and customers had a chance to form their own opinion, the results of their opinions analysis did not produce a crystal clear picture yet. One thing seems to emerge though – it is a lot better product than most people have expected. This writing is based on the analysis of 886 customer reviews of their experience with these tablets.
Below is a screenshot of the dashboard with a subset of attributes that are most important to customers (statistically determined). The bars represent measurements of the difference between customer expectations and there experience with each attribute.
It appears that Battery life issue was either blown out of proportions by pre-release speculations, or miraculously corrected by RIM engineers before the product started shipping, as the Playbook customers report that it exceeded their expectations by 21%.
QNX operating system appears to be a big hit with the customers as it exceeded their expectations by 35% and scored at much higher customer perception levels than iOS and Android.
What is surprising that overall general satisfaction score from the Playbook customers is quite low in spite the fact the most of the important attribute’s scores are positive. When I clicked on the general satisfaction bar of the Playbook, the negative opinion snippets (customer insight) was focused around the lack of content and applications for the device.
Since I don’t know a source of really authoritative, undisputable and complete definition of the term “innovation” I would like to propose that most innovations usually are new applications of previously invented technologies and/or processes. Truly innovative products usually find new ways to use existing inventions to improve experience of people. The confusion arises when practitioners focus on improvingproducts rather than experience with the product, because that is where a difference between “innovation” and incremental “improvement” lives.
Product managers, who subscribe to a “thought leadership” (as oppose to “customer participation”) model, love to quote Henry Ford who supposedly said – “If I asked my customers what they want, they simply would have said a faster horse.” There is no debate that a motorized carriage was an amazing invention, which by the way was not created by Ford – he innovated scalable assembly line manufacturing, among other processes. However his quote only implies that survey and/or forum market research methodologies are not suitable for validation of truly innovative products in conceptual stage of development. He couldn’t help but notice all the horse manure on the streets and inefficiencies of small cargo shipping associated with horse carriages. The art of “noticing” how customers experience products, currently available to them, is called ethnographic research and there is no innovation possible without some degree of it.
During the last SVPCamp 2011, I was really tickled to see a presentation by Tony Ulwyck of Strategyn, called “Silence the Voice of the Customer (VOC) and Create Breakthrough Products”. My first reaction to the subject line of the presentation was extremely negative as I, like possibly many others, did not pay close enough attention to terminology he used. In fact VoC is defined by most practitioners as company stimulated customer feedback about your existing products, which is one of the best sources of inspiration for incremental product improvements. Considering this, Tony’s subject line is very valid and surely catches people’s attention. Since VoC collection mechanisms are designed around company’s desire to collect and process the content in the most efficient way, they often do not encourage free and easy sharing of customer experiences, and the ways and reasons customers use the products. That is the primary reason why VoC does not offer much opportunity for discovery of “Aha” insights that lead to innovation. However the quest of an enterprise for efficiency often leads to missed opportunities to innovate as freely flowing stories about how the customers use the products and what jobs they “hired” these products to do, contain insights that can be discovered only by much more expensive ethnographic research. Online Word of Mouth (WoM) opinion mining technologies hold a promise of help this discovery to become timely, scalable and economical process.
It is very hard to sell to people we don’t understand. We turn to market research for help to understand who our best potential customers are. This quest usually starts with assumptions about common characteristics these people have to be predisposed to our products or services. It is common to assume that certain age and gender groups, or their residence, would make them more interested and capable to spend their money on our offering. Normally we come to these assumptions based on our personal experiences and intuition that we call “common sense”.
I wonder if that “common sense” is the same one that came with very accurate definition of what happen to us when we ASSUME?
I am sure that most people would prefer to KNOW instead of assuming and estimating, but there is no good way to know what does not exist yet. However there is a way of making better assumptions and estimates.
Steve Jobs is often and rightly credited as the genius behind Apple’s great success in assuming what consumers really want, but I wonder if there is a method behind his magic. Just how much sorcery is needed to figure out the requirements for iPod if you take a really close look on what customers, who purchased MP3 players, have experienced? Imagine watching these people figuring out tiny menus trying to find and play a music track they want to hear. Surely the age and gender may influence just how much of inconvenience one can tolerate, but the very fact that these people have made a decision to spend their money for something that is so imperfect, uniquely qualify them as a special market segment that supersede the traditional market segmentation criteria based on demographics.
The special applications tablets and digital e-readers were around for a few years and relatively large number of people and companies spent considerable time and money using these devices. Wouldn’t it make sense to learn from them what could make their investment even more compelling, and as the result attractive to even larger audience?
Consistency of the Apple success in introducing the products customers want suggests scalable methodology and transferable skill. I think the vision of current, successful products of your potential competitors as an early prototype of your future blockbuster is at the foundation of this methodology. The skill of creative analysis of customer experience with these products provides a detail road map to the future success.
Please RSVP by Monday, January 24. Registration is limited.
Questions? E-mail the Webcast Team or call 703-907-7797.
Description:
Participants will learn the methods, techniques and best practices for use of online Word of Mouth (WOM) to stimulate demand for CE products; methodology and tools for market research of social media to measure product reputation and customer satisfaction without breaking the bank.
Who should attend:
Marketing Product Managers, Market Research and Market Intelligence professionals, PR and Marketing Communications professionals interested in product and brand equity management.
Presenter Bio:
Gregory Yankelovich has been involved with customer centric product management and marketing, CRM process best practices and their automation for the last 15 years. He currently serves as CEO of Amplified Analytics, the firm that specializes in use of opinion mining and natural language processing technologies for analysis of CE Customer reviews, word of mouth and other forms of customer feedback.
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My hero, Peter Drucker, is often quoted to say (I paraphrase here) “What you cannot measure, cannot be managed” and this idea inspired many analytic initiatives by large companies as well as by budding startups, like this one. There are hundreds of companies that monitor, listen and analyze every aspect of web traffic, impact of media messages, both digital and analog, and just about anything else under the sun. There is surely no shortage of technology and tools, and current interest from businesses and consumers is quite high, but…there is still not enough conclusive evidence that measuring and managing to the specific parameter can produce measurable result. It often is still a challenge to interpret measurements into predictive models, that produce or support specific actions or decisions. Perhaps it is just my personal, limited experience and I look forward to be proven wrong in your comments, but for now I would like to propose a few potential reasons for these disappointing experiences.
Is it possible that we often measure wrong things? Many people would argue that NPS (Net Promoter Score) is a meaningless thing to measure and the Social Media influence, measured by Klout and others, does not translate into any specific action. We often measure what is easy to measure, listen to what is easy to hear, without a difficult effort of understanding and interpreting into an action that can produce measurable improvement. Many people find it easy to identify metrics that measure the worth of their work:
salespeople have sales targets, production managers track whether inventory is delivered on time and under budget, but for most of us it is very difficult to associate and measure our direct contribution to the desired outcome.
Perhaps the most actionable metrics are derivative – a combination of a signal, statistics, interpretation and analysis. Measurement of atmospheric temperature and pressure, compared with historic observations and combined with predictive algorithms, do produce relatively reliable weather forecasts. Perhaps measuring multiple aspects of customer experience, compare them with competitive alternatives and combining it with predictive algorithms, can produce more accurate sales forecast.
Is it possible that we have unreasonable expectations? We often expect direct causation while operating in an open system environment. Business environment is not a scientific experiment and unpredictability of market conditions cannot be isolated to prove validity of specific measurement methodologies. We only can improve odds, but we often expect certainty. Uncertainty is the reason for any important measurement effort. Measurement improves confidence in a quality of the decision is supports, but it cannot guarantee an outcome, after all according to Warren Buffet “It is better to be approximately right than to precisely wrong.”
For those of us who are deeply involved with online marketing research, it may appear that the proliferation of Voice of the Customer (VoC) programs is exploding these days. However, recent Forrester’s research found that 56% of the executives they surveyed were not aware of any formal VoC program in their companies. One of potential explanations to this discrepancy may be the fact that many companies conduct localized, departmental initiatives that are not visible to the rest of the organization.
