The Voice of the Customer

“Think you’ve got what it takes to be a part of The Voice 2020? Then you’re in luck, because we’re looking for some brand-new talent to take to the stage!”

 

 

Well, even though it might not be associated with the popular singing competition, the Voice of the Customer does, in fact, share some common traits with the TV show of the same name. Let us explore what it is and why companies like Amazon and Apple have already adopted a Voice of the Customer (VoC) approach in today’s increasingly competitive retail market.

 

What is It?

 

While the concept of VoC isn’t new, its methods and modalities have changed over the years to make it a far more impactful research technique for product marketers everywhere. In fact, the term was first used by Abbie Griffin and John R. Hauser in a 1993 paper published by the peer-reviewed Marketing Science journal, which goes on to discuss the Quality Function Deployment (QFD) method in the product development process. The authors describe VoC as such:

 

 

“[VoC] provides a detailed understanding of the customer’s requirements, a common language for the team going forward in the product development process, key input for the setting of appropriate design specifications for the new product or service, and a highly useful springboard for product innovation.”

 

 

In other words, VoC brings true insight into what customers really want from your brand or product, because it comes directly from the consumers themselves. It serves as a unique common data source for designers, merchandisers, sourcing managers, and suppliers to make more informed decisions on product innovation. This way, teams can confirm or adjust product concepts and future production.

 

 

In its earliest inception, the VoC method consisted of both qualitative and quantitative processes to gather information around consumers’ expectations, including personal interviews, focus groups, ethnographic studies, and contextual inquiries. Of course, these approaches offer key data and information to help brands and retailers discover the true value of their products. However, in recent years, researchers have applied more technological components to the VoC method, creating a meticulous data set complete with granular insights that enhance the research at hand. With the combination of digital solutions like product lifecycle management (PLM) tools and enterprise VoC software, now product developers can really refine their designs based on the most accurate information possible.

 

 

If we go back to “The Voice” analogy, think of the show’s contestants as new product ideas from brands and retailers. The judges, then, represent consumers’ immediate feedback. Instead of broadcasting these insights to television audience, the VoC is collected through internal digital platforms in order to optimize the product innovation process.

 

 

Why is it Important?

 

There are four key reasons to incorporate a VoC approach into a brand or retailer’s assortment strategy:

 

 

1. Relevance and Markdown Reduction

In retail, there’s no such thing as being irrelevant to your consumers’ expectations. So as major retailers either battle for market share or shutter their doors entirely, it’s become crystal clear: companies can no longer afford to ignore consumer trends. All that does is lend to increased inventory and shrinking margins. Instead, what retailers need to do is respond to consumer demand through unique product differentiation. By offering customers specific items unavailable in other stores, retailers establish a competitive brand advantage that sets them apart from their retail rivals. However, if retailers don’t do their due diligence in capturing and incorporating consumer insights into new assortment planning and pricing strategies, the damage has already been done.

 

 

2. Sustainability

When you transform consumer insights into binary code, VoC technology can provide a more granular approach to sustainability. Indeed, VoC can inform brands and retailers of the styles their respective consumers want to buy, therefore creating a consumer-centric supply chain and production process. With this sort of consumer-led manufacturing principle, retailers can produce more relevant assortments, better adjusted inventory levels, and far less waste.

 

 

3. Consumer Engagement

In world enveloped by social media, it’s crucial for brands and retailers to utilize social tools in order to keep a tight connection with consumers. Just look at all the content customers post to platforms like Instagram and Twitter, wearing the latest fashions from their favorite brands or promoting products they love. It’s proof consumers just want to be heard. In fact, 71 percent of retailers acknowledge this fact and recognize the importance of customer input in the product creation process. Listening to target consumers’ wants and needs only reinforces the relationship between retailer and shopper, and it helps product designers create those innovative products that’ll truly set their brand apart from the competition. Better yet, when retailers listen to consumer insights, they’re better able to reduce sampling-related costs, decrease oversampling, and minimize discarded merchandise with low customer interest, lending to a shortened time to market. Imagine what you could do with all that extra time and disposable working capital!

 

 

4. Production Efficiency and Early Supplier Involvement (ESI)

A recent survey from Sourcing Journal shows 45 percent of industry leaders agree: better planning at the product development stage can make a big difference in operational efficiency. That’s why it’s worth considering extending a VoC strategy to the entire supply chain. When leveraging VoC as a faster data stream to inform suppliers and factories of foreseen style attributes—like material, color, and shape—these partners can take advantage and plan accordingly. In a way, this allows retailers to reverse engineer the product development process, starting with consumer demand, then driving down to production and supply stages. Ultimately, the VoC approach leads to improved production agility, decreased inventory, far less waste, and a diminished environmental impact. Another bonus: according to 2016 Aberdeen research study, brands and retailers can expect an average of six percent less changes in orders when VoC data is included within the product development process.

 

 

Capturing the Voice of the Customer

 

While traditional VoC data (VoC 1.0) can be obtained through focus groups, questionnaires, and surveys, these methods prove to be limited in terms of technological insight and consumer panel representativity. However, times are changing, and more relevant technology is now readily available. Also, because today’s modern consumer has the option to purchase products from online retailers over physical stores, the VoC is essentially digitized, making it much easier for retailers to capture and analyze.

 

 

A combination of digital VoC (VoC 2.0) and Sourcing and PLM solutions, in addition to predictive machine learning (ML) capabilities is really the secret sauce to enabling a truly digital VoC integration within the new product introduction chain. The key to a building a successful VoC strategy lies in providing both representative and holistic views of that consumer voice across multiple data sources, like ecommerce shops, social media, and loyalty programs, among many others.

 

 

This is where using machine learning really shines. By listening to social media insights, consumer shopping habits, and historical purchase data, brands and retailers can better confirm trend directions, create new products in line with consumer demand, and manage inventory to best serve their customer base over time and with limited waste. This is a tremendous help, as it removes the guess work from your retail strategy and informs extended supply chain partners of what items are most likely to sell in specific channels.

 

 

So, you think you’ve got what it takes to incorporate the Voice of the Customer?

Nate Fleming

About Nate Fleming

Senior Director of Marketing

Nate Fleming is the Senior Director of Marketing at Bamboo Rose. Previously, Fleming was a technology market analyst and thought leader covering product innovation, software product development services, and digital transformation for Fortune 1000 companies.