A best practice being widely adopted by business-to-business firms is to institutionalize Voice of the Customer (VOC) or Voice of the Market (VOM) programs. Most business leaders we work with embrace the idea of putting more effort into learning from customers and are genuinely interested in whatever the market has to say – good, bad, or ugly.
However, organizations and people are ‘wired’ to interpret data and feedback based on their own experience or proclivities. When new information is filtered through prior experience and beliefs, even the most honestly receptive managers are prone to misinterpret what the market is saying. As a result, effort and resources invested in VOC or VOM programs don’t provide hoped-for early indications of risk or opportunity that would give the firm an edge over rivals.
The misread doesn’t need to be large to significantly affect end results. For example, a provider of industrial packaging solutions was engaged in a significant initiative to improve the sustainability benefits and reduced environmental impact of its products. This sales messaging focus on sustainability was generally producing good results for the firm. So they were perplexed when potential customers did not respond more positively to a new product.
We used our Nine Voices of the MarketTM approach to discover why potential customers were not responding more positively. While the new product was demonstrably superior to competitors in terms of reusability, positioning it on sustainable and environmental-related attributes did not resonate with the potential buyers. The company’s customer surveys showed that respondents consistently stressed reusability as an important value because it lowered their total costs. But in this case, the company mistakenly interpreted the feedback as related to sustainability and positioned the product accordingly. That positioning created a block to understanding the much simpler value – reusability and lower cost. Potential buyers were significantly undervaluing the product’s benefits.
The risk of misunderstanding market signals creates two demands for organizations: 1) the need to increase the openness and scrutiny of the ways managers understand market feedback and 2) getting parties not involved in the business day-to-day sales function to help interpret information from customers and other market participants.
Much of the work we do at Blue Ridge Partners is to reduce that risk and respond to the demands by providing objective, third-party analysis and interpretation of market information. However, internal resources can provide similar benefits, especially as an ongoing component of VOC or VOM. Groups such as Strategic Planning, Market Research and even Operations can be effective at challenging conventional wisdom and seeing different or additional meaning in feedback from the market. For some firms, getting peers from other business units involved is an effective alternative.
A key to understanding what the customer or market is saying is to continually challenge common or long-held beliefs and interpretations about customer and market values.