ADM510 C4 Researching Customer Needs 4.1 Gathering and Analysing Customer Information

ADM510 C4
RESEARCHING CUSTOMER NEEDS
4.1 GATHERING AND ANALYSING CUSTOMER INFORMATION
Voice of the customer is a market research tool that allows you to get feedback on your
customers’ preferences, expectations, and aversions. VoC should be collected on continuous
basis, but typically starts at the beginning of a new project. It can be a powerful way of
providing best-in-class websites, products and services to your customers.
[VoC] provides a detailed understanding of the customer’s requirements, a common
language for the team going forward in the product development process, key input for the
setting of appropriate design specifications for the new product or service, and a highly
useful springboard for product innovation.”
In simple terms, Voice of the Customer is a methodology used by companies and brands to
determine, describe and define the exact needs of their customers.
It’s the process of collecting everything that your customers are saying about your products
and services with the aim of getting to know the overall perspective of your brand.
Key approaches in gathering Voice of Customer (VoC) :-
1. Comment Cards and Formal Surveys

The survey to collect VoC Six Sigma data must target defined participants. There are many
reasons why a project team may wish to communicate with its stakeholders or customers. A
primary reason is the evaluation of the customer’s perception of the process or product that
is under consideration in the Six Sigma project and the impact of the project on customer
satisfaction.
2. Focus Groups
This is where a group of eight to 12 customers meet in a room, where they are asked to
share their perceptions, beliefs, and opinions about your product or service. The group
participants are free to openly talk with one another.
This data collection method is used to gain insights into customers' prioritization of needs,
or to test concepts and get feedback. Focus groups are sometimes used in addition to
interviews and surveys as the last step to further investigate and understand the Voice of
the Customer for each of the company's touch points.
Focus groups are used to understand who your ideal prospect is, what features to prioritize
when you develop your products, who the competition is and to understand narrative and
positioning into how to communicate with potential customers.
This data collection method is used to gain insights into the customers’ prioritization of
needs and/or to test concepts and get feedback. Focus groups are sometimes used in
addition to interviews and surveys as the last step to further investigate and understand the
Voice of the Customer for each of the company’s touch points.
Focus groups involve gathering your customers in a room and inviting them to express their
opinions, thoughts, and feelings regarding your goods or services. The participants of the
group are guided through a discussion by a moderator.
Focus groups are often used in addition to interviews and surveys to add more depth to
Voice of the Customer data. Having multiple participants can often lead to lively discussion
and allow ideas to spark off each other. The qualitative data produced helps with both
product improvements and the development of marketing material.
3. Direct Customer Contact

4. Field Intelligence
5. Complaint Analysis
Complaint analysis is used to track, categorize and handle customer complaints. When a
customer makes a complaint, he or she is voicing a concern in relation to your product or
service.
6. Internet Monitoring
Comment Cards and Formal Surveys

CC Type: A piece of card/form with simple questions.
 Usually placed at a counter/inside the room (hotel)
 Purpose: Measuring customer satisfaction.
 Limitation: Only few will respond and respondents may not represent the typical
customer.
❖ FS: Design to sample a customer base.
❖ Characteristics: Clear questions, unbiased questions,
avoid long questions.
❖Advantage of CC & FS: Easy ways to solicit customer information.
Focus Group
• A panel of individuals (customers/non customers) who answer questions about a
company’s/competitors products & services
• Approach: Allows a company to select the composition of panel
• Advantage: Direct voice of the customer
• Disadvantage: Higher cost of implementation
Direct Customer Contact

 Approach: Top executives commonly visit customers personally.
 Target: VIP and Loyal customers.
 Advantage: Firsthand information.
Field Intelligence
Any employees who comes in direct contact with customers (listen/observe/advice)
 Ex: Salespeople, technicians, receptionists can obtain useful information from the
customers.
 Advantage: Firsthand information, two-way communication)
Complaint Analysis
 A key source of information
Approach: Analyze the complaints received via
mail, telephone, media, etc.
 Adv: future improvement, corrective actions
 Disadv: Some cases require further investigations
Internet Monitoring
Use website/offer a forum for the customers to discuss/voice out their opinions.
 Adv: Minimal cost
 Disadv: Unstructured and unfocused conversations.
4.1.1 Analysing the VoC Data

• The customer’s information needs to be sorted & consolidated into logical groups in
order to understand the issue.
Affinity Diagram
• a technique for gathering & organising a large number of ideas & facts
• developed by Kawakita Jiro in 1960s.
Business Analytics
• can automate the process of capturing & analysing huge amount of data.
• for e.g. text mining & text analytics.
4.2 MEASURING CUSTOMER SATISFACTION & ENGAGEMENT

• An effective customer satisfaction measurement system results in reliable
information about customer ratings of specific P&S features & about the
relationships between these ratings & the customer’s likely future market behaviour.
• It allows the organisation to:
1. Discover customer perception & compare performance with the competitors.
2. Identify the causes of dissatisfaction & failed expectations, as well as the drivers of
customer’s happiness.
3. Identify internal work process & discover are as of improvement.
4. Track trends to see whether changes actually result in improvement.
4.2.1 Designing Satisfactions Survey
Determine - Determine its purpose.

Identify - Identify who should conduct the survey.
Select - Select appropriate survey instrument.
Choose - Choose carefully the questions that matter the most customers – length, types of
questions, wordings, scale...
Design - Design reporting format & data entry method
4.2.2 Analysing & Using Customer Feedback

 Customer feedback is important to improve a company’s products & processes -
integrated into improvement activities & in redesigning P&S.
 Good measurement – identifies processes that have a high impact on satisfaction &
distinguish between low performance & the well- performed.
 One of the ways to evaluate – collect information on both the importance & the
performance of key quality characteristics.
Why CS Efforts Fail (by Blanton Godfrey, 1996) (CHAPTER 1)
1. Poor measurement schemes

2. Failure to identify appropriate quality dimensions
3. Failure to weight dimensions appropriately
4. Lack of comparison with leading competitors
5. Failure to measure potential and former customers
6. Confusing loyalty with satisfaction
4.2.4 Measuring Customer Loyalty
Customer loyalty is a measure of a customer’s likeliness to do repeat business with a

company or brand. It is the result of customer satisfaction, positive customer experiences,
and the overall value of the goods or services a customer receives from a business.
When a customer is loyal to a specific brand, they are not easily influenced by availability or
pricing. They are willing to pay more as long as they get the same quality product or service
they are familiar with and love.
All businesses should strive to improve customer loyalty to keep clients purchasing and
make them promote their brand to new audiences. With email marketing, brands can boost
relationships with their existing customers, in turn, improving loyalty. Email marketers build
relationships by sending relevant campaigns that increase retention and build customer
loyalty, thereby yielding quicker growth than other marketing strategies.
Overall satisfaction
• Likelihood to switch to a different provider

• Likelihood to increase frequency of purchasing
• Likelihood of first-time purchaser to repurchase
• Likelihood to purchase different P/S
• Likelihood to recommend
• Likelihood to continue purchasing the same P/S
Tools for CL Measurement

Net Promoter Score (NPS)
Developed by Fred Reichheld, Bain & Co., & Satmetrix
Based on one simple question - scale 1 - 10
Customer Perceived Value (CPV)
Customer Perceived Value is the evaluated value that a customer perceives to obtain by
buying a product. It is the difference between the total obtained benefits according to the
customer perception and the cost that he had to pay for that. Customer perceived value is
seen in terms of satisfaction of needs a product or service can offer to a potential customer.
The customer will buy the same product again only if he perceives to be getting some value
out of the product. Hence delivering this value becomes the motto of marketers. Customer
Perceived Value becomes very important for making sure that the customer becomes
repeat. If the CPV is positive then only there would be a probability of repeat buy else the
customer would switch to a competitor. CPV can be measured by taking in account all types
of values like task, time, functional etc. to make sure it fulfills the expected value by the
customer.
• Measures how customers assess benefits

• Includes potential buyers; forward- looking & examine alternatives
• Identifies the most important product attributes

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ADM510 C4

RESEARCHING CUSTOMER NEEDS

4.1 GATHERING AND ANALYSING CUSTOMER INFORMATION

Key approaches in gathering Voice of Customer (VoC) :-

1. Comment Cards and Formal Surveys

3. Direct Customer Contact

Comment Cards and Formal Surveys

Direct Customer Contact

4.1.1 Analysing the VoC Data

4.2 MEASURING CUSTOMER SATISFACTION & ENGAGEMENT

4.2.1 Designing Satisfactions Survey

Determine - Determine its purpose.

4.2.2 Analysing & Using Customer Feedback

1. Poor measurement schemes

4.2.4 Measuring Customer Loyalty

Customer loyalty is a measure of a customer’s likeliness to do repeat business with a

• Likelihood to switch to a different provider

Tools for CL Measurement

Customer Perceived Value (CPV)

• Measures how customers assess benefits

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