477: Three-step VOC system – with Andrea Ruttenberg, PhD

Market research essentials for product managers Today we are talking about the knowledge area called market research. How do you know that the product you’re developing will actually create value for customers, that they’ll love it, and that they’ll buy it? Have you done the right things to have confidence of these outcomes, or are you wishfully guessing? You need confidence. That is why Andrea Ruttenberg, PhD, is joining us. As an associate principal at Applied Marketing Science, she has helped numerous clients conduct customer research and make critical business decisions—the same decisions you need to make, and this episode will help you move from guessing to confidence. Summary of some concepts discussed for product managers [6:08] What tools or processes do you use for customer research? The bread and butter of what I and my firm, Applied Marketing Science, do is Voice of the Customer (VOC). We define VOC as it’s described in an article called Voice of the Customer written by my co-founder John Hauser and his then-graduate student Abbie Griffin. Voice of the Customer is a systematic, thorough process that starts with qualitative interviews to understand customers’ needs. Needs mean customers’ problem, pain points, or things we can solve for them. Needs are not solutions. Voice of the Customer research means going to customers to deeply understand their perspective on problems we can solve for them. It’s our job to fix those problems for the customer. The VOC process has three main parts: * Talking to customers in focused interviews. * Analyzing transcripts and identifying unique needs. * Doing a quantitative survey to understand how important each need is and how satisfied respondents are with it. [12:49] How many customers do you need to talk to? Our gold standard is 30 interviews. That’s when we start to hear nearly 100% of customers’ needs. At AMS we do a systematic, labor-intensive, time-intensive, in-depth VOC process. However, that’s not always necessary. There are times when it doesn’t make sense to do 30 interviews followed by 500 surveys. We’ve been focusing on helping our clients understand tools for getting insights in a pinch. How can you do this VOC process without completing 30 in-depth interviews? Step one is making sure you’re doing it for the right reasons and at the right time. If you’re starting a new product from the ground up, I would strongly recommend a more systematic process. If you’re just doing version 1.2 or you already have a lot of institutional knowledge, you can cut corners and still come up with really good research. [15:02] Tell us more about your in-a-pinch VOC process. For our in-a-pinch process, rather than relying on qualitative interviews, we rely more on our own institutional knowledge and sources that are already available, primarily online. Step one is to recruit three to seven colleagues within your organization who have diverse perspectives on your customers and their pain points. They should be from different parts of your organization and if possible also have diversity in seniority and demographics. Avoid folks who are likely to criticize or dismiss ideas and avoid large seniority gaps. Next do some brainstorming to build a list of your customer needs. Start writing down what your customers’ problems are. We generally have people sit around the table for an hour or two and do a brain dump. Go beyond generalities and define specific pain points your customers have. Ask people to put themselves in the customer’s shoes or walk through a day in the life of a customer. Think about different types of customers. Next take stock of what you know and where there are gaps in your knowledge. Then see what you can learn about your customers online.