After we have a good handle on the market segments we wish to analyze, we need to answer three key questions:
- Who are you going to interview?
You will need to identify which of the market segments you need to focus your attention on for this program. Will you look to interviewing small, medium, or large customers? Will you focus on North America, Europe, or Asia, or do you need to interview customers in each geographical region? If you serve more than a few market segments, which ones will you pick to participate in this study? Once you have completed this, you must also decide which functions and job titles are the most important for you to talk to.
- How many customers will you interview?
Once you have decided on segments, geography, size of company, and job titles, you must decide how many people of each job title in each segment/category you must speak to in order to meet your objectives.
- Where will I conduct the interviews?
Will you send teams to each of the identified target customer locations, or would the process be better served by having the customer visit your location?
As we stated in the preceding section, the first step in customer sample selection is to review our segmentation and pick out the ones that are the most valuable for our VoC initiative. This task is best done in a group setting with all the stakeholders present and engaged. There should be a robust discussion with senior management in the organization to make sure your VoC program aligns with the strategic direction of the organization. As you can imagine, if you or your team selects interviewees and builds your next generation product based on the needs of a segment that is not a target segment, the likelihood of your VoC program meeting the needs of the company management will be greatly diminished.
When deciding whom you wish to interview, you will need to come up with a sample selection process to decide what would be the best use of your time and resources. This process is meant to be a way to identify the most representative profile of your target customers that are true to the objectives you have set, but it is critical that you try and keep your target selection process as simple as possible. It is best to try and devise one or more two-dimensional tables showing the most critical aspects of customer selection on the axis.
You can have any number of attributes for the customer selection axis, including the types of customers (lead users, satisfied customers, dissatisfied customers, former customers, noncustomers), other customer archetypes (most profitable customers, least profitable customers, channel partners, distributors, customers buying much more recently, customers buying much less recently, power users, leads lost, and so on), types of internal customers (purchasing, installers, engineering, users, key decision maker, repair and service technicians), geographical segments, customer segments, and more.
The following are the two potential examples highlighting ways to segment your customers for sample selection that I find both effective and simple:
Figure 5.1: Customer profile matrix
The first one looks at customer types (Lead Users, Satisfied Customers, Dissatisfied Customers, Former Customer, Non-Customers) versus the different market segments you are targeting. By taking this approach, you can fill in the table with customers in each quadrant ensuring that key customers in each segment are being identified and earmarked for inclusion into your program. The second approach looks at customer types versus geographical location. Most of the time, you will find that needs and differences in other geographical areas will be just as pronounced as those in different market segments, making it all the more critical to include geographically dispersed customers if investigating an international product.
The reason I like using a variation of the matrices in the preceding diagram is that it forces you to include those customers who are not the typical customers that your company calls on all the time. If you only include the customers who are your traditional customers that the company knows very well (and by extension, they know and like you well), it will be much harder to create a new product that will help to expand your market to that large segment of customers that you are not selling to.
Of course, if you are expanding your VoC program to include customers you don't already have, how do you go about finding who they are? Some of these will be easy to find, and the sales team can potentially provide you with customers for whom they have not been successful in persuading. Of course, this information may not always be easy to get from the sales team for fear that your research could unearth additional issues the noncustomers have which go beyond product considerations.
The following are some thoughts as to where you could find potential and noncustomers to help fill in one of the preceding matrices:
- Your company CRM: Assuming your company has a CRM system that is actually used, this is a potential goldmine of lost opportunities and past customers, as well as an excellent place to identify your current customers. If your CRM system is robust, there may also be customer data in here about service and repair issues that customers have had as well as people who have gone through your call center. If not, I would also recommend seeing what customer information those organizations have as well.
- Your website: If your website is not linked to your CRM, this is another potential source of customers who, for one reason or another, thought enough about your company and product to investigate you, but did not ultimately buy.
- LinkedIn groups and other online blogs: This can be an excellent source of identifying potential customers that you do not currently have. Of course, if you spend the time absorbing what people are writing in their LinkedIn group or blog, you can also identify lead users based on what they write, whether they are using your products or not.
- Tradeshows: You will typically have a list of people who have visited your booth and expressed some level of interest, but you can also purchase lists from the tradeshow or event organizer if you do not already have it.
- Hire a market research firm: If you develop a persona around the type of person you wish to include in your research, these organizations can call around and solicit volunteers on your behalf in your industry.
- Professional organizations: Many industries have professional organizations or standards bodies that help drive the market. These individuals are often very knowledgeable about your industry and can offer great insight, if they're not a competitor. Be sure to discuss your needs with the organization management. They can provide the right guidance for contacting individuals and can often share ideas of who would be a good point of contact.
- Magazines and other lists: There are list brokers and magazines that offer access to their lists for a fee.
This is a question everyone has, but there is no definitive number of interviews that I can offer to you. However, the following are some guidelines that may be helpful in determining the right number of customers for your project:
- The more strategic the product, the larger the number of customers you should target. If this product is key to the future success of the organization, you definitely want to make sure you have gotten it right and have a clear picture of the market. If you are interviewing customers regarding a minor modification or enhancement to an existing product, you would certainly not wish to invest the same level of time and money that you would if you were interviewing customers regarding the creation of a whole new product platform aimed at customers in a different market segment than that you are already working with.
- A consideration that many of us need to deal with has less to do with how many interviews should I do, but has more to do with how many interviews can I do? Interviews are a very labor- and resource-intensive pursuit, and while you may wish to visit 80 to 100 customers, realistically, it is unlikely your organization has the time, resources, or patience for such an endeavor. Keep in mind that the interview cost can be considerable when you add employee time, travel and lodging expenses, and then the additional backend costs for analysis and reporting. Firms constantly need to balance the question of the costs of additional interviews with the benefits of identifying a more robust set of identified customer needs, but it is helpful to consider that a VoC program of 30 interviews could cost an organization $30K to $100K when including time, travel expenses, and analysis. Make sure you understand what your budget is going into the process so you are planning effectively.
- As a rule of thumb, experts say you should do three or more interviews for each matrix block you have identified for your sample selection. If you look at Figure 5.1, we have five columns and three rows for each example. If you were doing three interviews for each block you would end up with 45 interviews! If we went even further with our matrices and said we wish to identify customers in three different segments for an international product, our matrix would look similar to Figure 5.2.
Figure 5.2: Large customer profile matrix
As you can see here, the number of interviews would be much larger than an interview-based VoC would warrant (five different customer types x nine segment types x three interviews each = 135 total interviews), and one should either look at another research method or consider modifying the approach. Even though you may be interviewing different customer types and interviewing customers in other regions, there is inevitably a point of diminishing returns. Abbie Griffin and John Hauser did some research on this topic while at MIT. Using binomial distribution, they plotted the number of customers interviewed versus their identified needs. In their analysis, they showed that 30 customers would identify 90% of all the total needs. They also showed that 20 customers would identify over 80% to 85% of the needs, and a sample of 12 customers might uncover 70% to 75% of the needs.
Based on the research by Griffin and Hauser, and consideration of resources and time to market, you would probably be well served to target a number of interviews in the range between 20 and 30 customers for a completely new product initiative. Unless you are doing something as drastic as a fundamental overhaul of your entire business, which could warrant 40, 50, or even 60 visits, for most product- and service-centric VoC programs, 20 to 30 is a good starting point. You will probably find that, in many cases, when doing your own research the interviews start to become rather redundant somewhere between 15 and 20.
Of course, this does fly in the face of the experts' rule of thumb that if you are making a product for multiple segments and multiple markets, as illustrated in Figure 5.2, you may be best advised to consider a modified customer profile matrix that will hopefully give you a fair representation of the market, but not be so onerous and expensive that you would spend the next 2 years doing customer research. I have found that it is typically best to try and narrow your initial VoC program into those segments you deem the best fit based on the research you have done as part of your customer-selection process. Try to have three or four interviews in the cells you consider to be the most important customers for your research and fewer, if any, in the other cells. In Figure 5.3, you can see an example where we have determined that our most important market is small international manufacturers, but we have also added a few additional interviews with large manufacturers' lead users to compare and contrast against the small manufacturers in an effort to determine whether we need to have a potential second round with the large manufacturers as well:
Figure 5.3
It is important not to try and shortcut this process and just interview the customers you think are the best. Laying out the tables we have shown in Figures 5.1 through 5.3 will help you to clarify the entire potential customer base and further help you to find the most ideal representatives for your future market. The matrices have the additional benefit of providing a framework to explain your segmentation and customer interview selection process to your coworkers as well as your management, and also gives them the opportunity to add constructive feedback.
While every VoC program is different, and you must ultimately decide the correct number of customers to interview, I would offer the following guidance as a place to start (assuming budget is not a gating issue) when trying to develop your customer VoC program:
- For a new platform product in a market segment different from the one you already cater for, aim for 20 to 30 interviews
- For a new platform product in a market segment that you already cater for, aim for 12 to 25 interviews
- For a new product in an existing platform, aim for 10 to 15 interviews
- For a minor modification or enhancement, aim for 5 to 12 interviews
When discussing customer interviews, most people assume that you will be conducting the interviews at the customer's place of business. While this is typically where many interviews take place, there are a number of areas in which you can hold interviews:
- At your place of business
- At a neutral location
- At the customer's place of business
The following are some thoughts as to the positives and negatives of each.
From a logistical and cost perspective, this is by far the best choice. If you can convince enough customers to visit your location, you can conduct many interviews with little cost. Even if you end up paying for the customer's travel, you still have the benefit of not loosing as much time out of the office as if you would have had to travel to each customer location. Having customers come to your site offers the additional advantage that the customer will not need to cut short the VoC if they need to run to another meeting, and it also means that many other members of your team can meet with the customers in addition to the customer interview team. Also, as the customer is already coming to your site, you can hold additional sessions with the customer to get feedback on other areas of your development roadmap, as well as the VoC-focused program; just be sure you don't try and blend another customer session directly into your VoC session. There should be clear delineation and ground rules (which we will cover in the next chapter) for the VoC session, which is considerably different than any other customer meeting.
Often, it is possible to coordinate customer interviews at an offsite location in conjunction with another event where the customer will already be in attendance. Tradeshows and conferences are prime examples. Holding customer interviews during these events have a number of advantages similar to holding the interviews at your place of business. First, there is a good chance that you will have other business at the conference or tradeshow and can accomplish additional sales and marketing tasks in the same trip, such as competitive analysis, attending conference sessions, or exhibiting.
As most of the time the customer will already be in attendance at these events, it is also unlikely that you will need to pay for things such as travel or lodging for the customers you are meeting. The other advantage, much like having the meeting at your site or location, is that the customer is out of the office and is less likely to shorten or cancel the meeting, and the possibility of the customer getting pulled out of the meeting when it is offsite is much lower.
Probably the largest advantage of meeting at a venue such as a tradeshow or conference is that you will likely have the opportunity to meet with a number of customers for the outlay of money and time, as opposed to only seeing one at a time if you are meeting at your location or the customer's site.
While there are a few negatives with visiting the customer's site as we discussed earlier, I have found that if you have the budget and resource availability, nothing can match the depth and richness of knowledge one can acquire by directly visiting a customer at his or her place of business.
In addition to the PR benefits of traveling to a customer's site, showing them how important they are to your research, there are two other rather significant advantages to an onsite interview that cannot be matched with an interview at your place of business or a neutral location:
- As you have already committed to the travel and living expenses required for most customer visits, you should also try and get a 360 degree view of anyone using your product or part of the value chain why not try and meet with three or four different types of users when visiting the customer location? Being able to get the viewpoint of the users, the purchasing department, the maintenance personnel, and the management of the organization you are visiting provides a much richer view of the customer than could be accomplished in only one interview, or even by interviewing all these customer types representing differing customers.
- If you are able to not just interview the customer at their place of business, but also actually see the customer using your product in their place of business, you will walk away with a much deeper understanding of the customer's needs. Quite often, a customer will not be able to recall an issue they have had in the past, but once put in front of your product, most of the time past experiences will bubble to the top of their mind. Additionally, during this phase of the interview you will also occasionally be able to learn just as much by watching the customer use your product as you do during the actual interview. We will cover more details of this part of the interview in Chapter 6, The Interview Process – The Interview.