Notes from 'Customer visits: Building better market focus'

The ever wise Mr. Saeed Khan recommended this to me when I mentioned I wanted to better understand the practice of discovering what customers value.  The question, "what is value?" is all well and good to think and talk about, but it's not practical unless you can apply the answers to your day job.

Book: https://www.amazon.ca/Customer-Visits-Building-Better-Market/dp/0765622254

The area of product management is one I haven't gotten a lot of exposure to, practically speaking.  Specifically how one actually figures out what jobs customers do and why they do them is something that I need more understanding in.  So here we are, spent some time reading (finally), and learned stuff.

Tl;dr

Customer visits must have a program, an intent, a design - else they, too, are just a good idea that ends up producing waste.  Being successful at these requires that facilitation and interviewing be core capabilities your organization fosters, paired with a designed intention to have an organizational culture focal around creating value for customers.

Recommendation: If you want a great take on how to be successful at making customer visits effective, this lays it all out in gory practical detail - with socio and technical covered well.  Though written almost 30 years ago, I'd argue it's as relevant as ever - we continue to have a tendency toward technical information gathering while still being living human beings.  The author does lean towards B2B (BTB, business-to-business), but I think you can still capture important learnings from his experiences.  Interesting applications lie in the internal aspects of an organization - I found myself nodding quite a bit when applying my health check experiences against what he wrote.

Thanks, Saeed!

Long notes...and they are long...

But perhaps buying the book isn't for you...these are my notes for future-me.  I wrote a lot because a lot stood out loud and clear.  Hope it helps!!

Off the bat, the author makes it clear that this is widely applicable across all sorts of industries, and that it effectively consists of intelligent interviewing.

"For the remainder of this book, I will assume that you accept the basic principle that business profits come from satisfying customer needs and that your concern lies not with justifying the need for a market orientation but with specific actions you can take, now, at your firm, to achieve it.  Moreover, I will assume that your primary interest lies in tools that will build a customer focus as part of the larger effort to achieve a market orientation." (p.4) 

...where market orientation = 

'business culture committed to the continuous creation of superior value for customers'
and

'org-wide generation of market intelligence pertaining to current and future customer needs, dissemination of the intelligence across departments, and org-wide responsiveness to it'.

The defining paradigms with which an author writes are so important, and it's wonderful that he started the book off by calling this out!  I remember hearing once that if you don't agree with the premise, don't bother with the book - and the author-held paradigms (and definitions) are certainly part of the premise!

"Understanding that market focus is a matter of business culture thus identifies the magnitude of the task facing you and your firm as you attempt to change." - boom!

Honestly the first chapter is worth the price of admission here.

"This is a radical notion: You cannot rely exclusively or largely on marketing personnel...to generate market intelligence.  If you do, you fail the test: Your business is not going to be customer focused. Your employees, in particular your technical people, are not going to develop a shared commitment to customer satisfaction."

"...it is important to understand that a focus on quality that is not simultaneously a focus on the customer will be, at best, blind and, at worst, wrong headed."

"Without practical steps to move the org closer to the customer's perspective, the TQM process is vulnerable to becoming a new gloss on an old fallacy: an encouragement to focus on the thing you make rather than the need you fill."

That mental model, of focusing on what we do rather than why we do it...not news, yet still a problem!!

"It is the thesis of this book that a simple, practical step that should be considered by any org that seeks to be market focused is to increase the number and range of employees who visit customers and improve the sophistication of these visits."

Rules that help you maximize effectiveness of that practical step... (p.7, p.28, p.36)

1. The key decision makers must personally participate in the visits.
2. The visits should be conducted by cross-functional teams.
3. The visits ought to be organized as a program, complete with... 

• stated (written) objectives
• a careful selection (sampling plan) of customers
• a discussion guide (and assigned roles for team members) linking objectives to interview conduct
• a (structured) plan for reporting the results

Remember, these customer visits are a (not insignificant) investment!

Long story short, there's empirical evidence that says, 'doing new product dev? not doing customer research, or doing it but poorly, or too little too late = greater odds of failure'.

Two models of the innovation process: technology push (teams creating on their own), demand pull (identified needs that are unmet). 70% of successful innovations fit a demand pull model.  (curious what Christensen says on this)

Here's a great rule of 'when to do in person visits'...what are your information needs?  If simple/factual, no justification for in person...

Richness (of alternative communication media) is a function of the amount and variety of information that can be conveyed.  Specifically, research has shown that interactive face-to-face communication grows superior in effectiveness to the extent the information to be exchanged between two parties is complex, novel, or ambiguous.

Another reason is paradigm differences (thought world in the book).

e.g. "Vendor engineers tend to live in Lab World, whereas the customer's technical people tend to live in Task World.  In Lab World, bits, bytes, and baud rate are a source of fascination and the focus of attention.  The product itself is valuable and interesting.  In Task World, the priority is to accomplish some job, and the product is merely a means to that end.  The product and its underlying technology have value only insofar as they contribute to this task."

tl;dr: get outside the system to understand paradigm differences.  firsthand information has more power than relayed information.

"A desk is a dangerous place from which to do business." :head-asplode:

So get outside your system and into your customer's system - customer visits happen at their place of work.  The interviews are thus able to seize the moment - suppose you see something there that catches your eye? (p.15)

"One of the most important messages in this book is that such an assumption (interviews must be done by interview experts, and not involve technical staff) can be dangerous and counterproductive... Although the importance of good interview skills cannot be denied, the overriding concern is to have the right people encounter customers firsthand."

The idea that engineers should stick to engineering is anti-customer-focus.

Further remember that in tech, innovation is a critical capability (as the tech sector has a lot of 'new product disrupts and wins' scenarios), so do not design into your system a segregation of 'marketing is the only dept to talk to customers' - you guarantee a stifling of innovation opportunities.

e.g. on a customer visit an engineer noticed some employees of the customer struggling with a competitor's product.  It was packed poorly and caused much grief.  Upon returning to the office, they immediately fixed their packaging process so that was not an issue with their product.  Innovation is not limited to 'new product dev'!

"By contrast, when given appropriate leadership and guidance, engineers can naturally develop a customer focus if they have an opportunity to encounter diverse customers and build and test mental models of how the customer interacts with the product."

"And if scientists and engineers are not committed to this goal, it is surely not possible for total customer satisfaction to be added in to the product at some later point."

Don't delegate this task outside (lack of business context understanding), or even to the sales team.  Why?

1. Longer feedback loops, lossy information.
2. Incentive structures generally do not favour "the kind of patient inquiry that good research demands."

Cross-functional teams doing customer visits = balanced view, plus teams can build trust.

This table...such wow. (p.23). The outcomes for the firm...

• Heightened motivation to respond
• Increased potential for change
• More thorough understanding
• Heightened possibility of innovative solutions
• Deeper understanding
• Protection against partial understanding
• Heightened commitment and responsiveness
• Decreased bickering among departments
• Better marketing-R&D integration

What you see there is that customer visits = builds shared understanding, improves organizational potential, develops hearts and minds.

(this also informs you when looking at costs of such projects; i.e. getting cross-functional teams together and forcing them to eat/travel/interview together can produce harmony out of chaos, i.e p.49-50)

A cautionary tale...one of the exemplar organizations here is Polaroid.  Same kinda mcdeal as the Good to Great orgs.  You can be illustrative of a principle in a snapshot of time.  Sustaining that principled existence is a whole other ball of wax.  I digress.

Part2

So simple as to be ineffective, yet so true in many ways.

"The key to conducting an effective program of visits is to have a clear idea of what you are trying to accomplish."

POINT:  PROGRAM of visits.  Customer visits are commonplace.  A program of visits, entirely different.  (I wonder how much that has changed in 30 years)

This kinda blew my mind, and I find this descriptive model really helpful in books - the appropriate and inappropriate times to use this method, as identified by verbs:

• Good: Identify, explore, describe, generate
• Bad: Select, evaluate, forecast, test

At this point I also recognize my poor understanding of statistics is also playing a role in grasping these ideas.  This has also come up before with Deming's variation/causes, and 'How to measure anything'.

Contrasting methods from 'programmatic'... (not all are inherently value-less! but with conflicting agendas and a lack of planning, they will fall short)  e.g. Sales support (closing a sale), troubleshooting (obvs), road show (i.e. engineers come along to help tout/sell a major product release), inbound visit (customer comes to you).

Thought: The physical product world plays heavily into the paradigm of the book, which makes sense for 1993.  We'd be tempted to say that it doesn't apply to software, as we are much more sophisticated these 30 years later...except that we are no different, humanity has not escaped us.  At my last job, they made a clear point of doing these types of visits, although, to what extent of adhering to the lessons of this book, I'm not sure.  I am sure, however, that engineering was never involved, and that certainly caused issues.

"...one of the surest paths to failure in research is trying to do too much.  Even more dangerous is not having a clear direction."

What costs more - taking a bit more time up front, or doing it twice later?  What do we tend to do?

So take time applying the 'set objectives' rule.

"...you may discover that management expects or assumes that you will present confirmatory objectives (select, evaluate, forecast, test)...This is a recipe for failure.  Experience suggests that you are going to get hurt if you proceed in good faith to conduct visits for the purpose of exploration and discovery, even as management expects you to bring home confirmatory evidence and hard data..."

Thus, everyone, especially management, needs to agree with the set objectives before you even begin.

Lesson: "Time and budget pressures consistently drive organizations in the direction of asking too much of customer visits."

e.g. in 1993 dollars, "Sometimes these managers think of $10,000 as the most anyone would ever want to spend on market research, whereas in fact it is close to the floor.  Many market research objectives require $50,000 to $500,000 to be fully addressed (particularly, those that involve a test, selection, or prediction)."

"Effective visit programs tend to have at most two or three research objectives. ... Firms that fail to empower their program coordinators sufficiently will suffer accordingly."

"Interviews...can be like 'drinking from a fire hose.' Without clear objectives, it may be very difficult to make sense of the wealth of input received from customers."

When selecting a sample of customers..

"The key point to remember is that the selection of customers to visit is a make-or-break activity for the visit program.  ...first law of sampling in customer visit programs is garbage in, garbage out."

'the wrong people to talk to' = not relevant or appropriate for the set objectives.

(That's kinda vague...)

Laws of sampling in customer visit programs...

1. garbage in, garbage out (at least the customer should be relevant to the set objectives)
2. bigger samples are better than smaller samples (min 10-12 customer firms; 20-30 good enough for most research)
3. sample size increases have diminishing returns (e.g. 60-100; caveat, multi-market studies or major business plan overhauls)

research says: 30 customers, good enough for identifying 90% of needs of total population; 20 : 80-85%; 12 : 70-75%

Sample frame (basic params of the types of customers to be considered for inclusion in the research effort) is a disciplinary mechanism for keeping you focused on the set objectives, adds discipline to interview question choice, and is a distinguishing feature of a programmatic visit - you should not choose customers based on your own convenience.

How to devise a sample frame:

1. Review segmentation scheme: (i.e. how the business differentiates customers) with the point being to remind you of important sources of diversity within your customer base
2. Select types of customers: can't visit all types - not enough money/time, and you need a good statistical sample size per customer type
3. Check feasibility: what are your practical constraints (time/money) vs. your set objectives?  If you cannot escape time or money constraints, revisit the segmentation scheme - creatively; with an understanding of statistics!
4. Define the (customer) job roles to be in included: You cannot visit Boeing; you must visit an individual at Boeing.  Be consistent in who you include across firms.  This seems like not that significant of a step, until you consider...

"In fact, there is probably no more disappointing feeling, across the whole spectrum of customer visit activity, than travelling at considerable time and expense to a distant city, sitting down at a conference table, and realizing within the first 5 minutes that you are talking to an individual who cannot help you.  This is an unrecoverable error that no amount of interviewing skill can correct." (p.58) lol

Do include your local sales reps in this process, as they have much tribal knowledge, including gotchas and faux pas's.  Ask them for customers who are neither very happy, nor very unhappy, as the middle customers tend to produce the most valuable interviews.  Do not delegate the recruiting, however - the sales rep's agenda is not your agenda.

Totally buried in here (p.64):

"...interview in which the vendor's primary objective is to listen and learn.  You want to be very clear that the purpose of this visit is to listen to customers so as to better understand their needs."

it would appear that meeting hygiene has been a problem for ages...

"Please recognize that most people do not like to show up for a meeting that has a vague or obscure purpose.  This is part cynicism ("Will my time be wasted?") and part genuine anxiety ("I don't know how to prepare myself").  The brief agenda plays an important role in assuaging this uncertainty."

"...there is one very important advantage that BTB marketers do have: your customers need you to succeed."

Note the customer + job mental model! 

"...if your products do not actually perform any useful function for customers, then, once more, you have larger problems than are dealt with in this book..."

Have a market research story...why are you out there talking to them? Why should they care?

Don't abuse the customer by spamming visits!  One visit can generate good will, several in a row will waste their time.

Rule for selecting team members: 

The people who must use the information that will result from the visits should be involved in gathering that information.

In visits, statistical consistency is key - same people need to observe the same customers, else you skew the results.

Consider the discussion guide a rough agenda, or collection of conversation starters - 2-4 pages is long enough - longer and you fall into the trap of anxiety, or trying to hit too many objectives in a single visit.

"Bad meetings generally result either from the lack of an agenda or a chair who fails to exercise leadership.  A good interview requires the same things as a good meeting: a feasible agenda and appropriate leadership.  The discussion guide serves as an agenda for the visit."

i.e. facilitation skills!!

Core to the discussion guide - follow three aspects: topics, questions in the topics, and sequence of the topics/questions.

Guide tips...

1. Circulate early drafts internally for comments suggestions.
2. Structure needs to balance generality and specificity; it's a set of prompts and reminders, not a script
3. Arrangement of topics should promote a smooth flow of conversation, logical-like
4. Pilot the guide with local 'safe/familiar' customers
5. Be flexible!  It's not the ten commandments; if the interview jumps around, that's ok - just ensure all the topics get covered sufficiently
6. For guides, less is more
7. Know your priorities, what is essential?

Note that it'll take 1-2 months to accomplish all the pre-work before you actually even start interviewing.

Ch4

• 2hr max; design & structure it (open - building rapport/safe space, middle - info gathering/getting answers, close - wind down intensity/last 5-10m can often be the most insightful, so leave space);
• tl;dr: all details matter here, the chapter goes through it exhaustively (e.g. make a tour part of the visit)

"I also encourage you to approach interviewing as more art than science.  Think of it as a craft or skill; do not approach it as a process that can be precision engineered.  Think of the interview as a messy, human event, full of surprises, and ultimately uncontrollable.

There are rules of thumb, practice does lead to improvement, and procedures can be developed to improve your conduct of interviews on average and over time.  But a good qualitative interview will always remain an improvisational, extemporaneous event." (p.90)

"Finally, let me warn you away from a tempting but ultimately bankrupt solution to the anxiety you may feel concerning interviews. ... that you can manipulate the outcomes of an interpersonal encounter if only you grasp certain techniques... I strongly discourage you from seeking or following advice on how to manipulate people successfully."  ...Because people know when they are being manipulated by a salesperson, and it makes them mad.

Moderator skills (p.92) - probing, establishing a rapport quickly, tenacity & fluency 

"The most common mistake made by beginning moderators is a failure to probe.  The ability to ask probing questions is something every moderator should strive to develop.  To probe means asking for clarification when an answer is opaque, difficult to follow, or uncertain in its implications.  It means recognizing when your original question has not really been answered, and finding a way to ask that question again in a more effective way.  It means pursuing a topic in depth rather than settling for a superficial overview."

"...easy to use is probably the single most unilluminating phrase in all of engineering today!"

e.g. "Anything else?", "Can you give me an example?", "Why do you say that?", and "Are there any other reasons?"

Rapport: a relationship of trust and empathy in which the customer feels free to express his or her perceptions and emotions, without fear of ridicule or rejection.  More rapport = customer more willing to work hard for you in the interview.

While we cannot change our innate personalities, per se, we can strive to remove obstacles to rapport, like attitude/tone of voice, body language, interruptions, attention paid.

There is a tension of building rapport with ensuring that you don't do things like rewarding the customer, false enthusiasm on your part.  Try to establish "unconditional positive regard" (client-centered psychotherapy) - which is kinda fascinating...effectively, be honest, genuine, show no falsehood.  Also interesting is the need for, as interviewer, to have a poker face.  Your opinions are effectively detrimental to the process.

Tenacity requires fluency of subject, ability to paraphrase - and these in good faith - on the fly.

Listening is the responsibility of everyone on the team.

• Grasping and retaining the specificity of what the customer said; staying alert to context, capturing this
• Recognizing and retaining the range of customer responses discovered over the course of the interviews - i.e. working to defeat our own analytical biases
• Understanding responses in depth - tying not just words but body language; what are they really saying?
• Draw connections to previously made remarks; share these realizations with customers

"You can spend your entire working life getting better at asking productive questions." (p.103)

Questions

KISS for questions - keep it short and simple

Leading question: one that makes one response from the customer more likely than another; leading and biased questions - don't do these; putting your own words in the customer's mouth; biased question is one that indicates you already know the right answer or that you are simply seeking confirmation for what you have already decided to be the case (these seem to be the most dangerous, as we can be blind to our own biases)

A productive question asks the customer to think, to draw connections, to explain, or to give the big picture; it is tied tightly to the context of a specific interview.  Yes/no; easily answered; obvious answers are not good signals.  Too hard also bad (e.g. whose responsibility is it to answer this question? vendor, or customer?)

• Bad: What features would you like to see?
• Bad: How much would you be willing to pay?
• Good: What does your customer demand from you?
• Bad: What sorts of information do you require when you have just arrived in a strange city?
• Good: Think back to the last time you arrived in a strange city and found yourself lacking some piece of information - what was that information, and how did you go about acquiring it?

At this point I'm just writing out the book.  The whole section on questions is great and full of insight.

The last 50 pages of the book are dedicated to practice and analysis of what you have gathered, so I glossed over this - but noted it!!!  This is super helpful and practical material, anyone involved in a customer visit program should read this, especially those designing the program, and trying to make use of it to sustain their org's success.