Strategy is a hard thing to define. People often ask me what we do as strategy consultants. A simple, but unsatisfying, answer is that we help companies figure out what to do to create value. But that’s not especially elucidating, either. How do we help them determine what to do?

Among other things, we talk—and listen—to customers. We have delivered valuable, actionable insights to clients by doing voice-of-the-customer (“VOC”) research.

For example, consider one of our clients, which had dutifully built its products largely on the basis of customer feedback. We recently interviewed a cross section of their current and potential customers. Our client was started to find a large difference between what customers and non-customers valued. They hadn’t realized that, by designing their product to be desirable to current customers they had ended up with a product suited only to one segment of the overall market. They are now designing a refresh that should allow them to reach a much larger effective market.

Here’s another example of how voice-of-the-customer research can create value. A few years ago, we were interviewing channel partners for a consumer products company. Asking about the relative importance of various product attributes, we kept hearing about the importance of one particular attribute that our client was not even aware of. After reviewing our findings, our client decided to make performance on this attribute a key part of its product development and marketing investments. This client has gone on to become one of the largest and most successful companies in its industry.

It’s surprising to me the number of companies that try to make big, strategic decisions without having a crystal clear understanding of what buyers value, what they are struggling with, or how competitors are addressing their problems. This is where VOC research can really add value.

When Does Voice-of-the-Customer Research Work Best?

Like any tool, VOC research works better in some situations than others. Generally, we’ve found it is most effective when at one or several of the following are true:

The information you’re seeking requires significant probing
The people you’re trying to interview are high level or otherwise hard to reach
The ideal sample size is in the neighborhood of 15-50
Discretion is required

We find that these criteria are often met at businesses that sell to other businesses.

Suppose you’re an investor thinking about acquiring an auto parts manufacturer. But, you’re concerned that new technology may shift demand and leave this parts manufacturer behind.

In that case, you might want to talk to directors of procurement at major auto manufacturers to gain a clearer understanding of the situation. You’d want to ask, “How is new technology changing your procurement strategy? What are your main purchasing criteria? Which purchasing criteria are becoming more important in light of this technology change?”

Now imagine trying to answer these questions with a web survey emailed to various directors of procurement. Question: “How is new technology changing your procurement strategy?” Answer: “We’re taking it into consideration.” Question: “What are your main purchasing criteria?” Answer: “Price. Quality.” Not super helpful.

This is where VOC research shines. The information you’re seeking is complex and requires probing beyond one or two word answers. The customers you’re trying to interview are reasonably high level and may not respond to an automated survey. You’re also not trying to talk to 1,000 customers—there are only so many auto manufacturers. Finally, discretion is required—you don’t want to let the market know about the potential acquisition.

Structuring Voice-of-the-Customer Research

In our experience, we’ve found eight guidelines for conducting effective VOC research.

1. Use a structured interview guide

A structured interview guide ensures all interviewees are asked the same questions. Without this, it is virtually impossible to analyze the results to draw general conclusions. It also ensures the interviewer doesn’t get sidetracked or forget to ask for key information.

2. Know when to leave the guide behind

Interview guides are important, but it’s also important to know when it’s okay to leave the guide behind. For example, an interviewer may want to go off-guide to understand rationale behind a particular answer. Or, she may sense the interviewee is getting impatient and want to skip to more important questions later in the guide. Sometimes, the most insightful information comes from asking a follow-up or otherwise unplanned question. For example, recall the client for whom we identified a new dimension of competition that they hadn’t previously considered.

3. Have smart, experienced people doing the interviews

While anyone can follow a script, going off-script requires skill and experience, especially when interviewing high level executives. This is important not only for the reputation of the client, but also in the sense that someone inexperienced might miss important, but subtle, details.

4. Mix qualitative and quantitative questions

The interview guide should include both open-ended, qualitative questions and deterministic, quantitative questions. Qualitative questions elicit responses that are rich in detail, but fall short in that they are not especially well-suited for comparative purposes. Quantitative questions, on the other hand, produce responses that are easily compared and analyzed, but sometimes these responses lack context. Thus, we prefer to include a mix of both types of questions.

5. Interview current and potential customers

In some cases, it makes sense to interview mostly current customers. However, as I showed with the example earlier, this makes you susceptible to a feedback loop: Your current customers may be your customers precisely because they appreciate the characteristics of your current offering. Interviewing potential customers can provide insight into what it would take to win new business.

6. Mix in-person and telephone interviews to meet time and cost objectives

In-person interviews are always the best way to get the most out of an interview. However, they can be expensive and time-consuming. Phone interviews are much faster and less expensive than in-person interviews. Companies must balance the value of in-person interviews with the costs, both monetary and time-related.

7. Conduct the right number of interviews

We often get asked about how many customers a client should survey. The answer depends on several factors, including the variability in answers and the degree of confidence required. We previously wrote about how to determine an appropriate sample size.

8. Analyze and communicate the results effectively

VOC research is only useful to the extent that the findings are insightfully analyzed and then effectively communicated. As we mentioned before, both quantitative and qualitative feedback—in fact, the combination of the two—makes for the most insightful and effective presentations to clients.

One less obvious reason that quantitative feedback alone isn’t as effective is credibility. Quantitative data analysis, however brilliant, struggles to tell a story. Qualitative feedback, on the other hand, is all about story-telling; it brings data to life and can help build credibility within the client’s organization. Instead of presenting just data, we’re sharing real quotes from familiar customers. It’s not us telling you that you should do this—it’s your customer!

Who should do Voice-of-the-Customer research?

VOC research can be performed internally by sales, product management, or customer service departments. These team members know their industry and may know the right questions to ask. They have relationships with current customers and should have no difficulty interviewing them in-person or on the phone.

However, it usually makes sense to use an outside resource. First, external firms have no vested interest in the answers. If you ask your sales department to conduct VOC research, don’t be surprised if it turns out that all you need is a better product and lower pricing! Second, external firms may have an easier time including potential customers in the interviewee set. Third, firms like Woodlawn have expertise in VOC research and are more likely to know how to efficiently talk with dozens of interviewees, standardize interviews to allow comparisons and quantification, and analyze the results in an insightful way. Finally, an external firm can typically work on the research full-time and get feedback faster than busy internal resources.

We would be delighted to help you with any of your research or strategy needs. Please email us.