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CUSTOMER/MARKET RESEARCH TOOLS:

What's the Need?

  • Need:  Understand key customer needs, competitive strength, customer segments
    • Quality Function Deployment (QFD):  Background on the methodology, step-by-step explanation, a tasty example, and 3rd-party resource links below
  • Need:  Buying-decision drivers and dynamics (price, product attributes, account coverage, etc.)
    • Win/Loss/Deal Participation Rate Surveys
  • Need:  Objective, qualitative input on messaging, positioning and branding
    • Focus Groups
    • In-Depth Interviews (IDIs)

Quality function deployment (QFD):

  • QFD is an excellent and fairly straight forward tool (depending how far you take it) to quantify the relative importance of customer needs in a competitive or prototype context.  Here is a very simple outline of the initial steps to take:
    1. Interview a small number of customers and have a discussion about what are the qualities that are most important to them when they think about purchasing a particular product or service.
    2. Following the interviews, boil done the essential qualities in a list of 8 - 12 key qualities.  These are the rows of your spreadsheet.
    3. Conduct a second round of interviews and ask them to divide 100 points (or dollars) according to the importance (weighting) of each quality when making a purchase decision.  The distribution of points needs to add up to no more or less than 100.  The most important quality would get the most points.  [It can be useful to have them fill in a spreadsheet where it totals as each value is entered so the customer can see how many points they have left to distribute.]
    4. Ask the customer to score (rank) how well each of 3 products (could be your product and two competitors or 3 potential product configurations that you are developing) deliver on each of the critical qualities.  This is your columns.  Use a scale from 1 - 5 (5 being the best), with the customer looking a Product 1 and each quality and giving it a score.
    5. Finally, back at your desk it's time to do some multiplication to derive the weighted rank score. For Product 1, take the weighting of each Quality (from the 100 point distribution) and multiply it by the score/rank and get a sum for each of the Products.  This captures that doing really well at what is most important to the customer is essential when customers have choices
  • Example:
    • Let's use chocolate candy as an example.  Here is a hypothetical list of potential qualities that are critical to a consumer:
      1. Sweetness
      2. Texture in your mouth
      3. Color/Visual appearance of the chocolate
      4. After-taste
      5. Price
      6. Attractive packaging
      7. Aroma or smell of the bar
      8. Cocoa percentage
      9. Country of Origin
      10. Brand
    • If I were to divide the 100 points across these qualities, Sweetness (20), Texture (15)  and After-taste (10) would get the highest valuation.  When I rank three different chocolate bars against those qualities, if one of them has a bad after-taste, I will give it a 1 or 2, which means that in the weighted ranked score, that would contribute 10 or 20 points to the overall total.  If another brand has an awesome after-taste and gets a 5, that would contribute 50 points to the total.
    • Similarly, if a brand gets a 5 on something that's got 5 points of importance, it only contributes 25 points to the total....wasted excellence.
    • You can use this information in three critical ways (at least):
      1. Look for sub-segments, for instance a taste segment vs. a price segment.
      2. Have discussions with the customer and with your team about what contributes or drives a particular quality.  For example, if your product appearance is getting whacked in the scores, dig deeper into understanding what about the appearance is off and what are the manufacture/design/components/ingredients which determine the appearance (or quality that you are trying to improve).
      3. The data will give you a clear indication of what your basis of competitive advantage is because you are clearly seeing your ranking on critical qualities vs. the competitor's offering.  You can credibly point to those qualities that your customer value and rank positively when marketing, selling and pricing your offering.
  • Here are a few resources to learn more about QFD:
  • Questions?  Feel free to drop me a line.