ValueNotes
Voice of Customer
Leveraging Customer Inputs to
Accelerate Business Objectives
White Paper
February 2013
White paper | February 2013 | Voice of Customer|2
Successful companies place the customer at the heart of their
business. ...
White paper | February 2013 | Voice of Customer|3
Benefits of listening to your customer
Successful companies place the cu...
White paper | February 2013 | Voice of Customer|4
Exhibit 3: Use of in-house resources most prevalent
The customer feedbac...
White paper | February 2013 | Voice of Customer|5
Exhibit 5: Decisions based on customer feedback
Source: ValueNotes Surve...
White paper | February 2013 | Voice of Customer|6
The following infographic further breaks down the satisfaction levels by...
White paper | February 2013 | Voice of Customer|7
How to get the most out of your customer feedback initiatives
The first ...
White paper | February 2013 | Voice of Customer|8
An ideal administrator of VoC is a third-party agency that understands t...
White paper | February 2013 | Voice of Customer|9
ValueNotes is a leading provider of market intelligence and research,
wi...
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White Paper - leveraging Customer Inputs to Accelerate Business Objectives

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Successful companies place the customer at the heart of their business, and base their activities and decisions on the customer’s needs and preferences.

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White Paper - leveraging Customer Inputs to Accelerate Business Objectives

  1. 1. ValueNotes Voice of Customer Leveraging Customer Inputs to Accelerate Business Objectives White Paper February 2013
  2. 2. White paper | February 2013 | Voice of Customer|2 Successful companies place the customer at the heart of their business. The Voice of your Customer is a key input for improving business performance and developing strategies for future growth. ValueNotes conducted a survey of senior decision-makers in Indian and multinational companies to find out if they gather customer feedback, how they do so, and how they use the inputs. We found that while most companies do in fact seek customer feedback and want to use it for critical decision-making, they are not able to do so, as the inputs get are not actionable. This white paper describes the key elements of a successful VoC initiative – an appropriate design for the program; in-depth, unbiased and objective qualitative interviews with customers, and incisive analysis that addresses the key pain points of decision- makers.
  3. 3. White paper | February 2013 | Voice of Customer|3 Benefits of listening to your customer Successful companies place the customer at the heart of their business, and base their activities and decisions on the customer’s needs and preferences. Exhibit 1: Critical intelligence from VoC For a company that is looking to align itself to the customers’ needs and expectations, Voice of the Customer (VoC) offers critical intelligence. It serves as an effective tool for providing actionable inputs for improving the overall customer experience to decision makers across multiple functions such as sales, customer service, marketing, product R&D, etc. An intimate understanding of the customer is an intellectual property that can give the company a competitive advantage. VoC is not a new initiative and most companies are aware of the significant gains that can be derived from it; but a lot of companies are not able to realize the true value it can generate. Some companies undertake VoC merely as a compliance activity, totally missing its value and contribution to critical business decisions. Source: ValueNotes Analysis As indicated in Exhibit 1, regular engagement with customers enables an organization to improve its topline and bottomline through customer retention, service/product improvements, better marketing, new product development, identifying new opportunities, among others. How are companies gathering customer inputs? A survey conducted by ValueNotes found that 78% of the companies that responded, do actually have a process to gather customer feedback. Of the remaining 22%, more than half are planning to start customer feedback initiatives in the near future. Exhibit 2 indicates the different methods used by companies to gather these inputs. Most companies resort to traditional methods - over 25% are using customer satisfaction surveys. Exhibit 2: Methodologies to gather customer feedback We also found that in a majority of the companies, the business development and operations departments are largely responsible for seeking formal customer inputs. From our experience, we have found that business can get better insights from their customers by using a combination of customer satisfaction surveys, feedback forms, inputs from sales as well as customer analytics. But surprisingly, barely 10% of respondents actually used all four in tandem. Future opportunities Existing efforts Source: ValueNotes Survey Analysis Impact of VoC New business opportuni ties Identify new customer segments Inputs to product developm ent Customer retention Improve product/ service delivery Improve marketin g efforts 26% 21% 18% 14% 8% 6% 7% Customer satisfaction survey Feedback forms Feedback from sales and operations Analyzing customer data/analytics In-depthVoC study Social media Other
  4. 4. White paper | February 2013 | Voice of Customer|4 Exhibit 3: Use of in-house resources most prevalent The customer feedback process is managed either by people within an organization, or by third-party providers. Some companies use a combination of both. The survey indicates a clear preference for in-house collection of customer feedback. About 40% of the organizations cited in-house knowledge of products and services as the main reason for conducting it internally. However, those that outsource their VoC program to independent third-party agencies identified lower cost and deeper insights as the top two reasons for choosing this option. Source: ValueNotes Survey Analysis Companies want to use customer inputs for business decisions Exhibit 4 indicates the varying degrees of importance that respondents attach to the reasons for capturing feedback. (The size of the word indicates relative significance.) Exhibit 4: Reasons for seeking customer feedback Source: ValueNotes Survey Analysis The top two key objectives of seeking customer feedback are designing improvements in products and services (42% respondents) and assessing customer satisfaction objectively (24%). Clearly, the focus seems to be on enhancing the existing product/service delivery to the customers. Additionally, respondents said that the key decisions made based on the customer feedback related to “Improvements in product/service delivery”. “It would be helpful if we can get specific areas to work on based on the data from research. It would be good if these are strongly stemming out of the specific data in research.” ~ Survey Respondent 57% 32% 11% In-house only Combination ThirdParty
  5. 5. White paper | February 2013 | Voice of Customer|5 Exhibit 5: Decisions based on customer feedback Source: ValueNotes Survey Analysis Most companies are missing the opportunity to use customer inputs to guide their future growth plans – identifying new market opportunities, new market segments and new product ideas. For instance, a meager 2% of the survey respondents used customer feedback to indentify new revenue streams. We feel this is clearly a lost opportunity. “VoC studies incorporate inputs from not just existing customers but also potential customers and competitors’ customers. They entail in-depth conversations and discussions with the customers to get to the need behind the need and hence identify hidden business opportunities.” ~ Varsha Chitale, Director, ValueNotes But they are not happy with what they get Ironically, while 94% of the respondents use customer inputs for some kind of decision-making, only 26% of them are happy with the customer feedback process in their organization. Survey findings: 78% agreed that customer feedback contributes to enhancing existing operations 15% respondents mentioned that customer feedback was helping them identify new opportunities 6% respondents mentioned that customer feedback was not feeding into any business decision Survey findings: 26% indicated that they are completely satisfied with the existing process 67% indicated a need for improvement 7% said they were unhappy with the process Of those that expressed complete satisfaction, 71% have a well-structured VoC process All those that expressed unhappiness with the existing process, rely on very basic and traditional methods to collect data 38% 22% 13% 10% 8% 6% 2% Improving product and/or servicedelivery Assessing performanceof sales & customer service teams Identifying cross sell opportunities Improving supply chain management Making effective pricing decisions No significant decisions taken Identifying new revenue streams
  6. 6. White paper | February 2013 | Voice of Customer|6 The following infographic further breaks down the satisfaction levels by the method of capturing customer feedback. Exhibit 6: Satisfaction levels with existing VoC program Source: ValueNotes Survey Analysis Clearly, although very few of the respondent companies use third-party service providers for getting customer inputs, the level of satisfaction is highest among them. This points to the benefits of using professional organizations that have expertise in conducting VoC surveys. The respondents cited many limitations of their in-house VoC program and reasons for unhappiness. Exhibit 7 indicates these in detail making it obvious that companies need more insights to make decisions. Exhibit 7: Limitations and unhappiness with VoC Source: ValueNotes Survey Analysis We believe that companies are making decisions based on limited insights. When the information they receive is irregular, without sufficient depth, and likely to be biased and inadequate, it is best termed as ‘unreliable’. This exposes them to a great risk. 29% 29% 26% 16% Ineffective probing Irregularfeedback Conflictof interest Lackof effective analysistools Limitations of in-house VoC program 27% 25% 25% 16% 7% Superficialresponses Feedbacknottimely Inadequate analysis Inconclusive responses Biasedresponses Unhappiness with collected data
  7. 7. White paper | February 2013 | Voice of Customer|7 How to get the most out of your customer feedback initiatives The first step in setting up and implementing an effective a program to capture customer inputs is to define the objective of the initiative. What is the purpose of seeking customer inputs? Which functions need these inputs? What are the actions or decisions that will be contingent on these inputs? Once the objectives are clear, it is possible to design a questionnaire or discussion guide that will facilitate the analysis to address them. Inputs from all the relevant stakeholders who influence the purchase decision in the customer’s organization need to be taken. In order to gain deep insights, the person gathering the inputs must be able to interact intelligently with the respondent and ask penetrating questions to fully understand the responses. Finally, the respondents’ feedback is truly valuable only if it is completely honest. The table below summarises the key elements of a successful Voice of Customer program: Exhibit 8: VoC Best practices Source: ValueNotes VoC Best Practices Key Elements WhatThey Bring to VoC Help MeetStated Challenges 1 Design Based on analytical and methodical approach 2 Skill Sets Experience in conducting qualitative primary research 3Objectivity Adequateproximity with respondents • Questionnaire/ discussion guide designed to facilitate the required analysis • Appropriate mode of delivery to maximize effectiveness • Choose the right respondents • Seek inputs from all stakeholders within an organisation • Use the right analytical tools & techniques to arrive at actionable analysis and recommendations for the company • Trained primary researchers can ensure better probing and hence deeper insights • Not too close - VoC study cannot be conducted by those who are close to the customers, as biases are bound to creep in • Not too far – At the same time, interviewers need to have an adequate understanding of the company and its products so that they are able to probe effectively and capture all the nuances • Inadequate customer responses • Inadequate analysis • Non-amenable data for comparison and analysis • Inadequate analysis • VoC data is superficial with no real insights • Conflict of interest in collecting information • Timely execution • VoC data is superficial with no real insights
  8. 8. White paper | February 2013 | Voice of Customer|8 An ideal administrator of VoC is a third-party agency that understands the company, technology, and products; understands the objective of VoC; has the expertise to design an optimal program; and is not too “close” to the customer. In-house departments, other than those dealing directly with the customers, may also undertake VoC. For instance, human resource personnel trained in interviewing techniques can get insightful inputs that can feed into business decisions without coloring opinions with their own biases. CASE STUDY Voice of Customer (VoC) enables Fortune 100 company tap $80 million opportunity in India The Problem A Fortune 100 engineering company with a presence in more than 100 countries and manufacturing technology solutions, wanted to develop a go-to-market strategy for the Indian hospital market. They needed to understand the hospitals’ requirements for their safety, security, productivity, comfort & energy efficiency product portfolios, and service opportunities in the installed base of such products. They wanted to establish the current market size, growth rates and growth opportunities for their products over the next 3-5 years. The Solution ValueNotes undertook an intensive Voice of Customer (VoC) study which gathered customer intelligence on 66 product categories from 650+ key decision-makers in over 100 hospitals across India. The study provided vital inputs on key decision-makers within the segment, the procurement processes in the hospital segment, budget allocation patterns & constraints, as well as the vendor selection processes. The Benefits The study captured the latent need for the client’s products, identified the high and low priority products, and the hospitals’ preferences for owning and renting/leasing the products. This provided pointers for how to pitch the client’s value proposition to hospitals. The study also provided vital inputs on the key decision-makers and influencers within the segment, the varied procurement processes in the hospital segment, their budget allocation patterns & constraints, as well as the vendor selection processes. ValueNotes further provided insights and recommendations on contractors and system integrators, which enabled the client to develop and implement a channel strategy for hospitals in India. The client is now developing a comprehensive go-to-market strategy focused on increasing their market share in the Indian hospital market.
  9. 9. White paper | February 2013 | Voice of Customer|9 ValueNotes is a leading provider of market intelligence and research, with expertise across industries. It provides a wide range of bespoke business research, competitive intelligence and financial research services about specific markets, industries and companies. The offerings include custom research as well as research support services. It serves leading global corporations, consulting firms, research & B2B publishers, PE & VC firms, and money managers. Competitive Intelligence Consulting – with over a decade’s experience in conducting competitive intelligence (CI) and advising firms on their CI strategy, ValueNotes CI Consulting assist companies to implement CI frameworks to gain a strategic advantage. The ValueNotes Sourcing Practice publishes proprietary market intelligence on the (services) outsourcing industry – in BFSI, e-learning, engineering, healthcare, legal and publishing – with an emphasis on knowledge services or KPO. SourcingNotes.com is now one of the largest information providers on the outsourcing industry. ValueNotes Sourcing Practice subscribers include buyers and providers of outsourcing services, consultants, and investors. ValueNotes.com, the financial portal, provides for an independent and unbiased aggregation of views, opinions, research, market analysis and independent third-party analyses, primarily about the Indian financial and equity markets. DISCLAIMER: This report does not constitute professional advice. The information in this report has been obtained or derived from sources believed by the sponsors to be reliable but the sponsors do not represent that this information is accurate or complete. Any opinions or estimates contained in this report represent the judgment of the sponsors at this time and are subject to change without notice. Readers of this report are advised to seek their own professional advice before taking any course of action or decision, for which they are entirely responsible, based on the contents of this report. The sponsors neither accept nor assume any responsibility or liability to any reader of this report in respect of the information contained within it or for any decisions readers may take or decide not to or fail to take. Copyright © 2013 ValueNotes Database Pvt Ltd All rights reserved For more information, please contact: Varsha Chitale Director, Competitive Intelligence Practice T: +91-20-6623 1743 / 1700 E: research@valuenotes.co.in ValueNotes Database Pvt Ltd 1 Bhuvaneshwar Society, Abhimanshree Road, Pashan. Pune 411 008. Maharashtra, India W: www.valuenotes.co.in

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