August 15, 2015

Voice of the Customer (VOC)

Resource: VOC to effort impact analysis to develop and approve project charter to CTQ to SIPOC , VOC ( Identify customer , Collect customer data ,  Analyze customer data & Determine critical customer requirements) KJ Method  affinity diagram Critical to Quality CTQ Definition of a Customer:  Identify Customers ( External  vs Internal ) Consumer customers vs business customers External market segmentation Benefits , Traditional VOC Collection Methods (Interview, Focus group, survey, customer complaint data) , Ethnographic Interviewers ( Ask thought provoking questions , Actively listening to what the consumer is saying• Observation daily business, Immersion–Stepping into another person’s life, Introspection–Imagining yourself in the role of the consumer ” Customer Retention The life cycle of a customer ( Acquisition, Retention keeping the customer Attrition: Customer enthusiasm fades, Defection: losing the customer ,Re acquisition: Regaining the customer )

Voice of the Customer
•Identify customer
•Collect customer data
•Analyze customer data
•Determine critical customer requirements

Definition of a Customer:

In simple terms, a customer is the recipient of a product or service.

Identify Customers 

Customers are recipients of products and/or services. Two types of customers are there:

External -> Product/Service

Internal -> Product/Service

Example –Customers Clothing Manufacturer Customers

External –Retail Shops –Wholesale Outlets –Retail Shoppers –Internet Buyers

Internal: Assemblers , Logistics , Accounting , Distributors

Identify customer

External customers
•End users: Those who purchase a product or service for their ownuse
•Intermediate customers: Those who purchase the product or service and then resell, repackage, modify or assembly the product for sale to the end user.
•Impacted parties: Those who did not purchase or use the product, but would be impacted by it.
Internal Customers
•Employees
•Down stream users (example, engineering is the down stream users of R&D, plant might be the down stream users of engineering department, many department may be the down stream users of personnel department)

Customer Retention The life cycle of a customer is defined by 5 stages:

•Acquisition: Converting a prospect to a customer, high cost •

Retention: Keeping the customer, ¼of the cost to acquire them

•Attrition: Customer enthusiasm fades, as dissatisfaction creeps in

•Defection: losing the customer

•Reacquisition: Regaining the customer, but at a high cost

Consumer customers vs business customers
Consumer customers
•The consumer market has a large number of customers
•The majority of consumer purchases are small in actual dollar amounts
•The transaction is usually a simple purchase
•Most consumers are not very knowledgeable about the product
•The supplier does not share proprietary information with the consumer
Business customer
•There are a very small number of business customers; maybe only one
•The amount of purchased per transaction is quite large
•The purchase is handled through specialized personnel
•The customer may know more about the requirements than the producer
•The supplier may allow the customer access to all sorts of information

External market segmentation
Market segmentation starts by distinguishing customer needs and wants. Market Segmentation divides the market into subsets of customers. Any subsets may be selected as a market target
To be reached with a distinct marketing mix.

Some typical segmentation examples are:
•Geography: region, county size, city
•Demographic: Age, sex, family size, income, occupation, race
•Psychographic: compulsive, extrovert, introvert, conservative, leader etc
•Buyer behavior: heavy user, aware of need, status, loyalty
•Volume: group based on usage of product (heavy, medium,light)
•Marketing factor: Brand loyal customers

Benefits of market segmentation
•The company can be in better position to spot marketing changes in needs, competitor
Offerings, levels of customer satisfaction
•Specialized knowledge can be developed. A manager can direct his/her resources of time
and money in more effective ways
•Separate marketing programs can be developed for each market segment

Traditional VOC Collection Methods

Interview

Learn about a specific customer’s point of view on service issues, product/service attributes, and performance indicators/measures. Supports development of hypotheses about customer needs.

Focus Group

Organize information from the collective point of view of a group of customers that represent a segment. Helps clarify and define customer needs.

Survey

Measure the needs or the importance and performance of a product, service or attribute across an entire segment or group of segments. Furnishes quantitative data.

Customer Complaint Data

Collect and classify customer feedback about product performance, features and attributes –classify by type across product lines. Furnishes qualitative and quantitative data.

Ethnographic VOC Collection Methods

Ethnographic Interviews–Asking thought provoking questions –Actively listening to what the consumer is saying

Observation–Carefully and non-judgmentally watching consumers as they go about their daily business (contextual inquiries)–Gleaning insights as you observe the things that they struggle with, are frustrated by, delighted in, and satisfied with

Immersion–Stepping into another person’s life–Living that life for sufficient time to acquire insights

Introspection–Imagining yourself in the role of the consumer–Living your life “in his/her shoes”

 

VOC Data Analysis

Types of VOC Data

•Words and notes•Attributes and numerical data•Data that can lead to design specifications

VOC Data Analysis Methods

KJ Method : The affinity diagram is a business tool used to organize ideas and data. People have been grouping data into groups based on natural relationships for thousands of years.

The affinity diagram organizes ideas with following steps:

  1. Record each idea on cards or notes.
  2. Look for ideas that seem to be related.
  3. Sort cards into groups until all cards have been used.

Once the cards have been sorted into groups the team may sort large clusters into subgroups for easier management and analysis. In many cases, the best results tend to be achieved when the activity is completed by a cross-functional team, including key stakeholders. The process requires becoming deeply immersed in the data, which has benefits beyond the tangible deliverables.

We also need to learn what is Critical to Quality Characteristics (CTQ) After collecting voice of customer, we need to arrange it into CTQ Critical to quality characteristics (CTQs)
Critical to quality characteristics (CTQs) are the product/service characteristics that are important to the customer from the customer’s point of view, and CTQ is measurable characteristics whose performance standards or specification limits must be met to satisfy the customer requirements.

CTQ have following components:

Characteristic

Measure

Target

Specification Limit

How to Derive Specifications/targets
•Customers Inputs

Example:

•For a water fountain…–Function = Deliver Water –CTQ = flow rate–Target = 16cc/sec –Tolerance = +/-4cc/sec•For a computer system receiving and storing images in a database…–Function = Process files –CTQ = time –Target = less than 5 sec
•Benchmarking

Benchmarking is comparing your approach to existing approaches or competitive designs•Find existing ways of doing your function or similar designs•Use the customer’s knowledge, the internet, the library & patents
•System Constraints

Voice of Customer