Board of Directors;
The Voice of the Customer (VOC)
Understanding customers for new
Thirty-seven years ago, in my very first Marketing role, I began my career of understanding basic wants, needs, and behavior of potential customers, of surfacing unmet needs, of calculating their payback from potential solutions, and of discovering their evolving needs in the future. Critical to the utility of this information is the articulation of customer needs into the formation of the product, into the product development process, and into of the delivery of benefits that customers wanted to spend money to receive.
This is what I term "front-end, fact-gathering, analytical Marketing to steer the enterprise."
An early, spectacular success
For example, in 1972 I was asked to turn around a floundering product line whose mounting losses and declining revenues had brought it to non-viability. The company was within a few weeks of either abandonment or folding the line into another, stronger, product group.
I examined the customer base and found an existing customer who was should have been ordering large quantities but was, instead, ordering a seemingly endless iteration of single units with slight variations of a standard product. I called them on the phone and identified their basic needs which bore no relation to either their purchase specs, to our design, or to our manufacturing process. Their iterations had been yielding only +/- 1% benefit improvement whereas they needed a factor of two improvement and were willing to pay for it.
As a team with our key engineer, we innovated a new product from the ground up to meet their needs and to deliver the benefits they wanted to spend money to receive. It's design was absolutely counter to everything else in the industry but made sense only if you understood the customer needs and the problems they were trying to solve.
We delivered a factor of ten improvement to the customer!
Our customer was ecstatic. Although the new product was less costly for us to manufacture, only $25, I raised the price by a factor of 100 to $10,000 ($5,000 in quantity, 2006 prices). The customer ordered 100s of units, at a gross margin of 99.5%, assuring the revenue stream, growth, profits, and future of that product line.
The customer received the benefits that they wanted to spend money to receive. Our company achieved revenue, growth, and profits. It was a spectacular success which reinforced the importance of my front-end Marketing.
I continued my career in Marketing, surfacing customer needs and steering the enterprise, and formalizing the "Actionable Front End™" method.
VoC coined twenty years later
More than twenty years later, Abbie Griffin and John R. Hauser coined the term "The Voice of the Customer," in Marketing Science, Winter 1993.
The Voice of the Customer has four elements (a subset of my "Actionable Front End™" method) and is defined as:
"Many people - practitioners included - assume intuitively that Voice of the Customer simply means any type of primary market research that elicits input from customers. Actually, the definition of VoC is far narrower than that. Voice of the Customer refers specifically to the development of a detailed and prioritized set of customer wants and needs in support of new Product Development - that is, the design of new or improved products, services, or processes. VoC belongs at the very beginning of a new product initiative, the so-called "Fuzzy Front End" of innovation, in which the company attempts to define exactly what type of product or service it wishes to build."
The company culture
The challenge is to develop a company culture of the Voice of the Customer.