Editor’s note: John Goodman is president of TARP, an Arlington, Va.-based firm specializing in customer service and satisfaction research. Colleen Bush is a measurement manager at the firm.

Getting close to the customer and listening. These have been the buzzwords of the ’90s. As we approach the year 2000, how much impact has the "voice of the customer" (VOC) had on improving customer service? Not enough. Our work on strategic customer retention studies and customer feedback tracking systems has taken us into many corporate departments concerned with VOC, including market research, consumer affairs, quality, and customer service. Often when we are hired, our clients tell us that they are frustrated because their VOC survey findings are not always actionable.

One company in the travel industry unsuccessfully spent about five years trying to get a VOC process in place. Department after department tried to develop a plan but did not have the proper budget and did not bring other departments into the planning process. Finally an interdepartmental team was developed, with senior management oversight, which planned the process and was given adequate budget to implement the program. While the process had a promising start, later reorganizations and downsizing led to the disappearance of the original interdepartmental team and a lack of follow-through from the original oversight/senior committee. The VOC function moved from one department and manager to another, each with various degrees of company/product knowledge and survey research skills. This company is now reassessing what went wrong.

Two years ago1, TARP identified five major problems which lead to ineffective VOC processes. The major disconnects, which were extracted from a survey TARP conducted with 22 North American companies, are:

  • lack of a unified plan for collecting quality, customer satisfaction, and market research data;

  • lack of an integrated analysis of the data to produce a unified picture of quality and customer satisfaction, drawn from all the data sources;

  • lack of a conversion of survey research findings into revenue implications;

  • lack of communication and translation of information to management in a manner that provokes action;

  • lack of an integrated tracking system to see if important issues raised by the VOC were ever fixed.

These disconnects all relate to a nonsystematic approach. TARP has noticed that these disconnects are still quite widespread and that many companies are asking themselves what they are doing wrong. In fact, in the past year a few of TARP’s clients have asked for a review of best practices of corporate research departments to help with their own internal assessments of their VOC process.

TARP used a few different approaches to get at this information: 1) a benchmark survey of 15 American and Japanese international manufacturing companies; 2) an evaluation of the departments of companies that TARP consultants have worked with recently, which span multiple industries.

The benchmark survey

Although some companies have made headway in resolving some of the disconnects, the findings in the May 1998 TARP benchmark survey of research managers from 15 major manufacturing companies found that many of the disconnects still exist. Below are some of the findings that illustrate that many of the disconnects are still prevalent today and that the process is fragmented.

  • Two-thirds of the companies had separate groups collecting product needs and quality data, "how to go to market" data, and "after sales" customer satisfaction data.

  • All but three of the 15 multinational companies designed the product in their home (headquarters) country and sent the product to the other parts of the world with instructions to "do research on how to sell this standard product in your part of the world."

  • Fewer than a quarter of the companies conducted a unified analysis of manufacturing quality/warranty data, survey data and customer complaint data which was converted to revenue implications.

  • Fewer than a quarter of the 15 companies conveyed their VOC results to management in an interactive manner that got management directly involved with the data.

The companies in this sample that were effective in the VOC process had unified the collection of data (product needs and quality data, "how to go to market" data, and "after sales" customer satisfaction data). These units also develop the overall data collection plan for surveys, complaints, and internally-generated data. They convert their data into number of customers at risk and often directly into revenue implications. Finally these units are heavily involved in the business planning process and develop the ongoing company strategy in direct conjunction with the management committee.

The evaluation

Observing both best practices and failures for the VOC process showed that there were some other fundamental issues that had to be present in order to solve the disconnects.

  • Corporations should regard the VOC process as an investment. The VOC process should be considered part of the basic infrastructure of the organization and should be one of the last budget items to be cut. In fact, in times of scarce financial resources, the VOC process can help identify and prioritize where to invest. Successful companies seem to be aware that VOC information is an investment and they are willing to pay for it. This may be because they convert the VOC findings into revenue implications. Many less successful companies either never make this initial investment or skimp during downsizing and reorganization initiatives to save costs.

  • The VOC process needs corporate-wide commitment. The VOC process should have corporate-wide commitment across departments and up and down the various levels of the organization. The planning, implementation, and reporting should not be the sole responsibility of the survey research department. The role of communications should not be underestimated. Clearly understood channels of communication should be in place and responsibility should be assigned for communication of the plan. Successful companies have communicated the plan ahead of time to all company constituencies (including finance, planning, marketing, product development, and customer service) and seek input to the research planning process, have regular data reporting and translation mechanisms, and seek feedback on the back-end for the usefulness of the information. Successful companies have communication and understanding to/from all employees, input and feedback from a group of survey users, and oversight from a senior management committee.

  • Professionals should manage the VOC process. Many companies ask us where the VOC process should reside within the organization. TARP has noticed that the location of the department is not as relevant or predictable to success as having an adequate budget, a corporate-wide commitment, and lastly, the correct professionals in place to manage the VOC process. The person managing the process should have good company, organizational and product knowledge to assure that all of the needs and requirements of the research users are understood and integrated into the plan. The manager should have good communication and translation skills to move the VOC plan horizontally and vertically throughout the organization. Last, the manager should have a good understanding of survey research and/or have support staff to fulfill this function. This will assure that sound research methodologies are practiced and that the implications of the research findings are reliable and valid.

Must be well managed

Our conclusion: The process can work if it’s well managed. Two companies which have VOC processes which appear to work well are Harley Davidson and AT&T. While neither company has a perfect system, they have dealt with all of the pitfalls identified above. Signs of success are Harley’s backlog of orders and AT&T’s recent Baldrige Award.

Getting to a successful VOC process is an implementation challenge. For example, a Midwest health care company realized that its VOC process was not working and banned all surveys until a needs assessment and new plan was developed to assure that the firm was maximizing its resources. A company-wide team of operational managers was formed, lead by the strategic planning and analysis department with oversight by a senior management policy committee. The integrated team identified gaps in the VOC process and brainstormed and developed a VOC plan that brings all constituencies into the process. The firm is taking the plan back to its policy committee for approval to implement and appear to be moving in the right direction.

This example is indicative of a widespread discovery that the VOC process is not always working. What is encouraging is that many organizations are undergoing some basic self-examinations to assess where they have gone wrong and what they can do to be more successful in getting close to the customer. While there may be a few companies that are not convinced that the VOC process can work, most companies seem to have the basic belief that a VOC process makes good business sense and are taking steps to reassess their VOC process. Companies that admit that this examination requires some patience and reengineering will be prepared for the challenges of the next century in adapting to rapidly changing technologies and customer needs.

Notes:

 1 John Goodman, Scott Broetzmann, and David DePalma, "Maximizing the Value of Customer Feedback." Quality Progress, December 1996, pp. 35-39.