Article by José Campos (Coauthor of 'Capture and Use the Voice of the Customer for Product Development'):
How many hours have you spent in contact with your customers in the last 90 days? If you are typical of the industry, probably no more than 14 hours or 2 to 3% of your time. Most of us spend little time with our customers. Nor do we spend enough time talking about our customers with others in our organization in order to understand the very people who provide our profits.
Customer Intimacy is the ability to understand and then internalize customer needs in order to generate new value in the form of new products and services. "Value" is always determined by your customers, i.e. nothing is valuable until a customer says so.
Thus, customer intimacy improves profits. Given that it takes purposeful interaction with customers to internalize customer needs, rethinking this time allocation can contribute significantly to creating new value — and by the way, spending only 2% of your time doing it will not work — much more is needed.
Investing the right amount of time with customers is the key to successful new product development. Measuring the outcome of the time spent is also important to track your commitment and progress. It also helps to develop baselines for planning purposes, i.e., how much time you will spend with your customers in the future.
Organizations should measure the outcome or results of interactions with customers, for example, identifying the number of new features, benefits, and key insights discovered from customer interactions. And although operational distractions, such as “fire fighting,” or the lack of clear customer-centric organizational values can keep you from it, the single most important thing you must do is develop customer intimacy to internalize current and future customer needs.
WAYS TO SUPPORT BETTER CUSTOMER INTIMACY
#1 Develop a customer-centric culture.
Having a customer-oriented culture is critical. A culture is more than a set of values listed in a document — it is the observable and rewarded intention and behavior of the company at all levels, from top management on down. It is a vision that is more than another platitude. It is a guiding force that rallies the entire team. A customer-centric culture is one that relentlessly pursues superior value for the customer.
Consider the following ideas:
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Do the stated and observable values of your organization recognize the importance of the customer?
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What customer-oriented actions are celebrated? For example, when was the last time someone was recognized for spending lots of time with customers or uncovering a high-leverage customer need?
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How often is there a team retreat focused solely on talking about your customers, their needs, and their environment?
#2 Establish an effective system for collecting and processing customer knowledge.
Every organization needs a framework for requirements gathering, then interpreting and incorporating customer input and innovating from it (see Table 1). You must be able to understand what your customers are saying—and what they’re not saying—and interpret and internalize the messages. Then the ideas must be incorporated into your company's product development projects.
Investigating is the initial process of requirements gathering. Typical activities include selecting the customers to be contacted, then identifying who will make the contact and what information is needed.
Interpreting involves spending quality time processing the input until clear messages are identified. The amalgamation and integration of the input from many customers will result in clear patterns of customer needs.
Innovating is the ability to go beyond an intellectual understanding of customer needs to an almost visceral belief in them. As someone said, being customer-driven is the ability to see the world as your customers do. In this phase, the intent is to turn your customer input, now that you understand it from the previous phase, into innovation.
Incorporating is accessing the skills, knowledge, and abilities needed to translate customer needs into product design requirements. Here’s where you will convert the innovation into documented new product definitions that drive the product design process.
There are many proven methodologies for product definition available, such as Quality Function Deployment (QFD), KJ, and Hoshin. It is essential to make a long-term commitment to the methodology your organization adopts as most appropriate for itself. In our experience, it is best to start slow and take 2 to 3 years weaving the methodology into your organization. It is, after all, a change in your culture. The new methodology, by definition, will force your team to do things differently through new processes and approaches. Reinforcing the values and desired behavior is critical to achieving true customer centricity — no easy task, but achievable.
The Four I’s Framework for Successful New Product Development
Simply visiting customers is not enough to ensure the incorporation of customer needs into new products. Customer-driven companies have a systemic approach to requirements gathering and processing customer input into useful information that the product design team can apply to product development projects and the creation of new value.
| Investigate | Interpret | Innovate | Incorporate |
| The disciplined approach to requirements gathering and documenting articulated and unarticulated customer needs through a variety of techniques that always include in-depth interviews and some level of observation of the customer’s world. _____________________ Output At the end of this phase you should have captured the voice of the customer—the raw data from each of the interviews that you and your team conducted. Documentation This should be in the form of notes, photos, video and audiotape, plus the vivid memories that you and your interview teams captured. | The process of organizing the customer data and processing it into a set of prioritized and documented requirements that clearly express customer needs. _____________________ Output At the end of this phase, you should have a clear, prioritized and approved list of customer requirements. Documentation Generally, this list is relatively short, between two and ten. In some cases it may be longer, but we encourage prioritization to reduce the number of the requirements, which capture the value expressed by your customers. | The process of transforming requirements into one or a few product concepts that will address the articulated and unarticulated customer needs. _____________________ Output At the end of this phase you should have innovative solutions that address the requirements expressed by your customers. This phase is where engineering and marketing collaborate to find the solutions and to innovate. Documentation The documentation should be a prioritized list of solutions, or a collection of product features that in aggregate (cumulatively) provide a solution. | The disciplined refinement of the product concepts into a single one validated by customer feedback, and its full articulation into a set of features and specifications ________________________ Output Naturally, the desired output of this phase is a profitable product. Documentation On the more practical side, the output of this phase generally is an engineering document, which takes into account the technical trade-offs, the timeline, product design costs and other parameters. Engineering and marketing collaborate to ensure that the customer always wins, that is, that the product has maximum value. |
Table 1
#3 Ensure a common purpose by meeting face to face with your customers.
Every one on the product development team, from Marketing to Engineering to Management, must share the same vision of the product. In fact, a team is not a team until there is visible commitment to a common purpose, and the customer is the best point of convergence. Customer focus helps a team rise above functional and corporate barriers. Having all players meet with your customers to share ideas and concerns can solidify the buy-in of each member.
#4 Include all players during the "fuzzy front end."
The period at the beginning of any development project, when there are more questions than answers, often creates considerable confusion. This “fuzzy front end” is a crucial time to bring all team members—including your customers—into the picture because it’s the most convenient and cost-effective time to make and get approval for changes. Once true implementation begins, change becomes painful and may cause severe delays in your schedule.
The Fuzzy Front End, as shown above, occurs at the beginning of every product development project when confusion, mystery, and questions abound. This natural phase is an opportunity to connect with your customers. Also shown are two other important milestones: time-to-market and time-to-profit.
For example, speed of new product development makes it imperative that your product design team has the opportunity to internalize customer needs by interacting directly with them, without our customary filters. These filters, such as design experiences or preference for a particular technology, might make us favor one approach we’re familiar with over another that could better solve the customer’s problem or might encourage us to ignore the wishes of the customer.
Seeing customers in their environment and dealing directly with their problems enhances your engineers’ creativity and helps channel their innovation in the right direction. In fact, your engineers will identify customer needs that marketing can’t—no matter how good your marketing organization might be. Why? Because engineers and other technical personnel view the customer through a different frame of reference. And in a collaborative relationship driven by the mission to provide unprecedented value to the customer, engineering and marketing can create a most helpful “stereo vision” of your customer.
As you involve your product design team, consider the following skills for successful customer interaction:
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How to select the right customers for interaction
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How to frame high-value questions, ones without filters and biases
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How to listen without filters
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How to translate vague and subjective input into clear design ideas—and constraints
#5 Learn what is missing by talking to your “non-customers.”
We tend to talk to our customer “friends and relatives,” i.e., those customers who are mostly satisfied with our products. In some cases, these customers are the sales team’s favorites and are already well taken care of. While talking to these happy customers is important—it only provides one-dimensional feedback. Talking to other types of customers can provide a fuller picture.
Try talking to some of these customers:
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Customers you’ve lost
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Competitors’ customers
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Future customers
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Unhappy customers
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New customers
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Customers buying much less
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Customers buying much more
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Customers who’ve stopped buying altogether
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Customers who are the most profitable
#6 Measure the right things.
What measures do you currently use to track your level of customer intimacy? Start by tallying the hours you and your team spend in conversation with customers. This simple measure, which can be easily extracted from your calendar/planner, will give you a base line of your organization’s investment in customer intimacy. This will also enable you to set goals to improve your understanding of customer needs. For example, rarely does a 15-minute meeting yield key insights. Plan to spend 2 to 3 hours in dialogue with your customers. This may be hard to do, but the payoff is enormous!
Naturally, measuring the number of hours spent with customers does not guarantee success. You should also track the number of outcomes, the concrete results that can be attributed to customer interaction that enable you to increase the value you provide to them. For example, track the number of high-leverage needs that have been identified, the number of new product features that come out of customer interactions, the speed of decision-making in your organization, and the number of competitive advantages. You decide what to measure, but make sure they are results, not just activities.
#7 Know where you are going.
To transform your organization into a customer-centric team, an overall plan of action is essential. Your commitment to a customer-centered approach should include a master plan, or road map, that outlines the why, how, when, who, and how much. Smaller, more individual action plans can guide easy actions that can be quickly implemented. Create an approach that facilitates small improvements, while you develop and implement your long-term plan.
By making a commitment to incorporate at least one of the ideas above in the next three months, you and your organization can take a significant step towards better customer understanding and improving your ability to meet customer needs. And by focusing on immediate steps and a commitment to customer intimacy for the duration, the time and energy invested can pay off in visible results and a healthier bottom line.
