10/18/01© 2001, Predictive Consulting Group, Inc. 1 Customers? Who Needs em? Customer Sensing...

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Customers? Who Customers? Who Needs ‘em? Needs ‘em?

Customer SensingCurtis N. Bingham

Predictive Consulting Group

cnbingham@predictiveconsulting.com

An address given to the Boston Product Management Association, 10/18/01

Attendees rated 4.6 out of 5

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Bell Labs Mentality

“We know what our customers want! We told ‘em so!”

It was more important to be right than to do right.

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Outline

Symptoms & problems Becoming customer focused Organizational considerations Political considerations Resources Blah, blah, blah Applause and fanfare

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Is Your Company Customer-focused?

Does your company:– Have a vision that doesn’t mention the customer?– Issue press releases stating they are customer-

focused?– Ask a nanny for input on advertising?– Develop the CEO or VP’s pet-product?– Ship the “cool” product that came from engineering?– Respond to the most vocal sales people?

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Results of False Customer Focus

Great idea—but nobody buys Hugely expensive product launch/customer

acquisition efforts—but nobody buys Sales don’t meet forecasts Extreme Marketing vs. Development

friction

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Customer Satisfaction Index

Source: ACSI/UMich Business School

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ACSI & Spending

Source: ACSI/UMich Business School

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ACSI & Earnings

Source: ACSI/UMich Business School

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Why Do Customers Buy?

Consumers– Gratification– Emotion

Businesses– Security– Politics

Bottom line:– To make problems go away!

We must understand the customer pain, their willingness to buy, and profitably address it!

10/18/01 © 2001, Predictive Consulting Group, Inc.

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How Focused Must We Be?

Initially? Extremely!– MarketSoft

It depends on where your products are in the industry lifecycle

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Industry Lifecycle

10/18/01 © 2001, Predictive Consulting Group, Inc.

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How Do You Learn What Customers Want?

Research, research, research Development Research Marketing Research Sales Research Support

May require organizational change

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Types of Research

3rd party research (be careful!)

Primary research– Surveys– Focus groups– 1:1 interviews

Sales reports Field engineers Customer service reps Customer complaints

& suggestions Data mining Numerous other semi-

automated tools

10/18/01 © 2001, Predictive Consulting Group, Inc.

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3rd Party Research

Think about their methods– Everyone wants to influence them– Companies pay them to come on-site– Many analysts seem to be easily influenced

Big research firms– Common complaint is that Jupiter stinks– Gartner, Forrester have decent reputations– Aggregators such as eMarketer may be better

Don’t have the richness of your own data!

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Direct, Qualitative Research

Types– 1:1 interviews– Focus groups– Some surveys

Excellent for B2B or smaller # of customers

Good precursor for more in-depth research

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Getting Started

State/uncover what pain the customer feels? Select the audience Conduct interview, survey, focus group Aggregate feedback Interpret Test Implement Test Repeat until well mixed

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Formulating the Problem

Problem well-known– Make generic questions from development issues

• “What are your thoughts on the new J2EE standards?”• “What OS platforms are you using? What are your upgrade

plans?”

Uncover it– Follow MarketSoft’s example and let customers tell

you• “What keeps you awake at night?” • “What three things are you presently unable to do?”

Allow for additional discovery

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Select the Audience

Remember—target both economic and use-buyers! Start with advocates

– Sales force, field engineers, tech support Friendly foes

– Current customers Neutral

– Companies that sales hasn’t yet approached Possible enemies

– Customers of competitors, lost sales

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Making the Appointment

Avoid the sales defense! Focus on their needs, not yours Approaches

– “Attempting to better understand your needs…”– Market research

Considerations– Most people will allow an hour, at least 20 mins– Offer an incentive ($100 AMEX gift certificate)

Read book: “Selling to Vito”

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Interviewing

Be mindful of Outcome, Time, Process

Open-ended questions– What does <company>

need to do/improve to be the most successful at <something>?

– Valuable for discovery

Record on tape so don’t have to waste time taking notes

Jot ideas to drill into during interview

Communications skills

Body language and NLP– Ensure comfortable,

free of distractions Location

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Common Interviewing Mistakes

Selling during the interview– Interviewee doesn’t care about YOU!

Leading or closed questions– When are you implementing <feature>?– You’re not using <technology> are you?

Too rigid in following survey Body language

10/18/01 © 2001, Predictive Consulting Group, Inc.

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So You Have Some Quotes….

What do you do with them all?– Contextual Inquiry– FOCUS– KJ– Affinity mapping (sticky notes)

All require up-front planning to execute properly– Select method before interviewing

10/18/01 © 2001, Predictive Consulting Group, Inc.

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FOCUS

5 phases– Frame the project– Organize the resources– Collect data– Understand the voices– Select action

Developed for military applications Somewhat rigorous

10/18/01 © 2001, Predictive Consulting Group, Inc.

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KJ

Nobody knows what the acronym means!

Start interviews with very open-ended question

Transcribe interviews, put all quotes on board

Group similar and write summaries

Re-group and continue until have 1 final group

Last group is product to build, direction to turn, etc.

Sub-groups are product features

Extra rigor around format, style, color, etc.

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Affinity Mapping

Similar to a KJ, but without the rigor Uses “sticky notes” to post quotes up

around the room Find basic similarities and group like

sticky notes with each other

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Testing & Interpreting

Verify with customers– “This is what we heard, is that what you said?

Anything else to add?” Work with development to create solutions Consider

– Strategic goals– Resource levels– Competitive concerns– Time constraints

Results into development & product roadmap

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Testing

Verify with interviewees that product design meets need– “Does this solve your pain? How would you

improve it further?”

People are horrible at telling you what they want– Terrific at telling you what they don’t like!

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Publishing the Results

Publish far and wide, and at every opportunity!

1 page executive summary 4-5 page overview Supporting material as necessary

– Don’t need volume

Use actual quotes everywhere possible

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Implementing

CPD—Customer Profile Document MRD—Marketing Requirements

Document PRD—Product Requirements Document FRD—Functional Requirements

Document

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Testing

Traditional alpha, beta, etc.

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Organizational Considerations

Need a champion Create interdependency amongst service,

product management, sales, development, etc.

Create avenues for customer feedback Customer advisory board Customer experience manager?

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Political Capital

MUST HAVE With management

– Know the customers better than the salespeople With Engineering

– Know the customer better than anyone or know engineering better than they do

Develop by sticking your nose everywhere Actively involved with sales, engineering, support Present your findings at every opportunity

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Resources

Whitepaper– “The Swiss Army Knife of Marketing: Demand-

Oriented Pricing” Newsletter: “Tips & Tricks for Product Managers”

– 1x monthly electronic newsletter Customer interview template InContext training Voices into Choices KJ whitepaper

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What Do You Do Tomorrow?

Sign up for Product Manager’s newsletter Schedule long-time customer interview Set up customer input mechanism Interview sales people/field engineers Interview customer support Explore resources on communications skills

--OR— Hire me!

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Summary

It mattereth not what thou doest, so long as thou dost find out what pain thy customer feeleth!”

10/18/01 © 2001, Predictive Consulting Group, Inc.

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Applause and Fanfare