hensley
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© The Lubrizol Corporation 2006, all rights reserved
Until You Ask the Customer…You’re Just Guessing
Until You Ask the Customer…You’re Just Guessing
Deborah HensleyDeborah HensleyNoveon, Inc.
CDMA – April 19, 2006© The Lubrizol Corporation 2006, all rights reserved
© The Lubrizol Corporation 2006, all rights reserved
Why should we ask the customer?Mechanics of customer interviewingThe Industry Satisfaction GapExamples of market-driven product developments
Until You Ask the Customer…You’re Just Guessing!
Have you ever wondered how we put a man on the moon before we thought about putting wheels on luggage?
0% 20% 40% 60% 80% 100%
Led to unexpected or surprising info
Led to greater customer satisfaction
Directly impacted products offered to customers
Has been valuable
Yes No
This Program…
Collaboration and Engagement:The Benefits of Customer Interviews
Background: Hewlett-Packard has been a leader in developing and using these customer interview best practices. Over 200 HP practitioners responded to a survey as follows…
Source: Edward McQuarrie, Customer Visits, 1998; HP study was conducted in 1990 by Corporate Marketing Education
96%
90%
88%
76%
Value of Up-Front Definition:Causes of New Product Failures
29%
19%
14%
12%
24%
25%
17%
45%
0% 10% 20% 30% 40% 50%
Inadequate Market Analysis
Product Problems or Defects
Lack of Focused Marketing Effort
Higher Costs than Anticipated
Competitive Strength or Reaction
Poor Timing of Introduction
Technical or Production Problems
All Other Causes
Source: The Conference Board, Adapted by Robert S. Cooper, Winning at New Products, from D. S. Hopkins & E. L. Bailey, “New Product Pressures”
Frequency Factor Was Cited as Reason for Failure
High quality upHigh quality up--front work is critical to understanding customer needs & respondfront work is critical to understanding customer needs & responding to them.ing to them.
© The Lubrizol Corporation 2006, all rights reserved
New Product RoadmappingBuilding a Better Business Case…
Assess Segment Assess Segment (Multi(Multi--client studies, client studies,
internetinternet……))
Understand SegmentUnderstand Segment(Preliminary interviews, (Preliminary interviews,
industry expertsindustry experts……))
Plan OfferingPlan Offering(New Product (New Product RoadmappingRoadmapping))
Build Business CaseBuild Business Case(Justify heavy spending (Justify heavy spending typical of development)typical of development)
Product Product DevelopDevelop--
mentment
New Product Roadmapping Overview- Combines customer interviews with competitive benchmarking- Forms basis of strong business case for product development- Provides “roadmap” of next 1-3 Noveon product introductions
Customer Interviews- 8-12 Interviews of customers & prospects by 2-man Noveon team- Captures relative importance of top 10 desired properties- Captures current level of dissatisfaction for each property
Competitive Benchmarking- Noveon tests its polymers vs customers’ favorites- Noveon tests the customers’ desired properties- Noveon uses customers’ preferred test procedures
© The Lubrizol Corporation 2006, all rights reserved
8-Step ProcessNew Product Roadmapping
1. Set scope of product develop. project1. Set scope of product develop. project
2. Develop customer survey2. Develop customer survey1st Team Meeting1st Team Meeting
3. Gather customer data using survey3. Gather customer data using surveyCustomer InterviewsCustomer Interviews
5. Gather competitive data from 5. Gather competitive data from labworklabwork
LabStudies
LabStudies
4. Plan side4. Plan side--byby--side competitive lab studyside competitive lab study2nd Team Meeting
2nd Team Meeting
6. Analyze customer & competitive data6. Analyze customer & competitive data
7. Develop a roadmap for product dev.7. Develop a roadmap for product dev.
8. Create a plan to develop products8. Create a plan to develop products3rd Team Meeting3rd Team Meeting
Customer Interviews
Similarities to a Focus GroupSimilarities to a Focus GroupQuestions prepared prior to sessionPhone call & confirmation note used to set upStrong moderator skills requiredSignificant probing employedModerator does not have primary note-taking responsibilityRigorous post-session debriefing used
Contrasts to a Focus GroupContrasts to a Focus GroupYou often have a prior relationship with participantsParticipants are usually in competition with each otherSmaller groups (typically 8-10 for focus groups)Session conducted at customer’s site No one-way mirrors, audio-taping or video-taping
The Industrial Analogue to the Focus GroupThe Industrial Analogue to the Focus Group……
Who Should Conduct Customer Interviews?
Buy-in by your cross-functional team… Evidence acquired firsthand is much more compellingClarity of purpose… If a sales person leads the effort, it may be confused for a sales callRicher content… Inquiry is more productive with technical experts interacting and probingCustomer willingness… They are often eager to talk to technical experts who speak the same languageBetter accuracy…More than one set of ears to capture the dialogue and interpret the commentary
Provides These
Advantages
TechnicalTechnical--Marketing Marketing TeamTeam
Basic Interviewing Skills
Don't ask customers for solutions Don't talk too much. Probe customer answers.Use visual aids.Paraphrase.Accept criticism gratefully.Don’t be arrogant.Be patient.Avoid peer group pressures.Allow some rambling.
Who Should You Interview?
Visit demanding customers & harsh environments Visit demanding customers & harsh environments that that ““push the envelopepush the envelope””DonDon’’t keep going back to the same t keep going back to the same ““comfortablecomfortable””group of favorite customersgroup of favorite customersThe market leader is not necessarily the The market leader is not necessarily the ““innovatorinnovator””Consider going downstream to talk to your Consider going downstream to talk to your customercustomer’’s customers customerInterview multiple buying influences at each customer Interview multiple buying influences at each customer locationlocation……▪▪ ManagementManagement ▪▪ TechnicalTechnical ▪▪ MarketingMarketing▪▪ ManufacturingManufacturing ▪▪ PurchasingPurchasing ▪▪ Product UsersProduct Users
Five Parts of the Roadmapping Interview
1. Feedback on 10 attributes“How important is this attribute to you?”“How satisfied are you with what you can get today in this attribute?”“What test procedure do you recommend to measure this attribute?”“What test result would make you totally satisfied?”“What test result would you consider to be barely acceptable?”
2. “Did we miss any attributes?”3. More feedback on top 3 attributes
“If we could totally satisfy you in any three, which would you pick?”“What is the primary benefit you would get from this?”“How aggressively should we pursue each of these top three?”
4. “What products should we test against?”5. Anything else we should know before starting?”
These are the most These are the most important questions.important questions.
© The Lubrizol Corporation 2006, all rights reserved
Product Offering;Market Segment:
Region:
# Property
1Importance(1-10 scale)
2Satisfaction(1-10 scale)
3
Recommended Test Procedure
4Test Result Needed to Make
You "Totally Satisfied"
5"Barely Acceptable" Test
Result1 Dry Film Appearance2 Clarity/Color3 Adhesion4 Wear Resistance5 Recoat & Dry Time6 Fluid Resistance7 COF8 VOC9 Low-Temp Coalescence
10 Gloss/Sheen
Producer
10 = Critical (among a few absolutely essential properties)
5. What test result would you consider to be the "barely acceptable" level?
10 = Totally satisfied (if we were any better on this property, it wouldn't do us any good)
1 = Totally unsatisfied (our performance here is seen as a major deficiency)
Product Tradename & #
5 = Moderately important (most customers look for this property)
2. How satisfied are you with your existing products' performance on this property?
3. What test procedure do you recommend using to measure this property?
7 = Very important (this property is seen as very important by our customers)
4. Using this test, what result would make you "totally satisfied"?
What existing products are you using as a reference?
Thank you for helping us with this survey. We'd like to ask you 5 questions on 10 properties below…
For our lab benchmarking, can you tell us which products come the closest today to meeting your needs?
Any
Oth
ers?
Polymers for CWFsFloor FinishesN. America & Global
1 = Not important at all (does not matter how we do on this property at all)
Comments… What I like and don't like about this product
Noveon New Product Roadmapping Survey--Overview For Customer's Use
1. How important is this property to you?
3 = Not too important (nice property to have, but not too important to customers)
3 = Unsatisfied (our performance here is seen as deficient) 5 = Barely acceptable (barely meeting most customers' expectations) 7 = Good (meeting most customers' expectations)
Attribute Importance vs. Current Satisfaction
SatisfactionSatisfaction
ImportanceImportance
HighHigh
LowLowHighHighLowLow
Important need already Important need already being met (Threshold)being met (Threshold)
Important need not now Important need not now being met (being met (Opportunity!Opportunity!))
Low customer interestLow customer interest
16%
14%
32%
25%
27%
22%
25%
28%
38%
22%
0% 5% 10% 15% 20% 25% 30% 35% 40%
*Importance times Dissatisfaction (100% = Totally Dissatisfied on a Critical Attribute)
Scrub Resistance
Hiding Power
Brushability
Fading Resistance
Stain Resistance
24-Hour Window Stick
Sprayability
Factory Mix Time
Brushmark Leveling
Crayon Removal
Market Satisfaction Gap*Industry Satisfaction Gap*Satisfaction Gap used to measure customer eagerness Satisfaction Gap used to measure customer eagerness for improvement in an attributefor improvement in an attribute
It helps you to pinpoint attributes that are important to It helps you to pinpoint attributes that are important to the customer that are not being satisfiedthe customer that are not being satisfied
Satisfaction Gap = Importance times Satisfaction Gap = Importance times ““DissatisfactionDissatisfaction””SG = (Avg. Importance Rating) x (10 SG = (Avg. Importance Rating) x (10 –– Avg. Satisfaction Rating)Avg. Satisfaction Rating)
Example:Example:Customers rate an attribute as 9 in Importance and 6 in Customers rate an attribute as 9 in Importance and 6 in Satisfaction on averageSatisfaction on average
SG = 9 x (10 SG = 9 x (10 –– 6) = 36%6) = 36%
Ratings > 30% generally indicate high eagernessRatings > 30% generally indicate high eagerness
Measuring the Satisfaction Gap
Current Industry Satisfaction (Most Important on Left)(5 = "Barely Acceptable"; 10 = "Totally Satisfied")
0
5
10
Weathe
ring
Dirt Pic
k-Up
Efflor
esce
nce
Elong
ation
@ Brea
kTin
t Rete
ntion
H2O Abs
orptio
nAlka
li Res
istan
ceTe
nsile
Stres
sEla
stic R
ecov
eryFle
xibilit
y @ -2
0
Satis
fact
ion
with
Cur
rent
Sup
ply
"+1 Sigma"Mean"-1 Sigma"
Importance of Properties to Customers(5 = "Nice-to-Have"; 10 = "Critical" Property)
0
5
10
Weathe
ring
Dirt Pic
k-Up
Efflor
esce
nce
Elong
ation
@ Brea
kTin
t Rete
ntion
H2O Abs
orptio
nAlka
li Res
istan
ceTe
nsile
Stres
sEla
stic R
ecov
eryFle
xibilit
y @ -2
0Impo
rtan
ce o
f Pro
perty
"+1 Sigma"Mean"-1 Sigma"
© The Lubrizol Corporation 2006, all rights reserved
New Product Roadmapping Output ExampleArchitectural Specialties; Vertical Masonry
Industry Satisfaction Gap (Importance x Dissatisfaction)(100% = Totally Unsatisfied on a "Critical" Property)
22%33%
21% 19%13%
19%12%
20%12% 13%
0%
10%
20%
30%
40%
Weatheri
ngDirt
Pick-Up
Efflores
cence
Elongation @ Brea
kTint R
etentio
nH2O
Absorption
Alkali Resi
stance
Tensile Stre
ssElas
tic Recover
yFlex
ibility @
-20
Satis
fact
ion
Gap
Initial Product Development Target Area
Road Mapping Conclusions
Architectural Specialties:Vertical Masonry
Satisfaction GapDirt Pick-UpWeathering
High Interest in a “Thin Film Coating”Semi-Elastomeric (8 mil DFT)Less elasticity than “true elastomeric”Long-lasting clean, appearanceApplication over higher alkaline materialsCrack bridging performance
Commercial products available in the marketplace
Competitive products
Products from your current product offering and experimental products if you have them
Evaluate the products using the parameters and performance standards revealed in the road mapping
Road Map…then Benchmark
Identify Product Development Objectives
Dirt Pick-Up ResistanceWeathering and Yellowing Resistance
Tint Retention
Efflorescence & Alkali Resistance
Water Resistance
Quick Dry to Prevent Blotching Due to Early Rain
Elongation & Elasticity
Low Film Formation Temperature – 0oC
Binding Power for Fillers & Pigments
Translate Satisfaction Gap to Value Proposition
Noveon Waterborne Carboset®Acrylic and Styrene Acrylic Semi-elastomeric polymers for High Performance Masonry Coatings
Carboset® AE-960 & Carboset® SA-860 offer the complete combination of performance properties:
Clean, long-lasting coatingsConsistent coating appearance and colorApplication flexibilityCrack bridging performanceIn-can stability
Carboset® is a registered trademark of The Lubrizol Corporation
Carboset® AE-960 and Carboset® SA-860Outstanding Dirt Pickup Resistance
Carboset ®SA-860
Carboset ®AE-960
Competitive Polymer
CommercialCoating
Use Satisfaction Gap to Develop Selling Tools
Additional Case Study
Clear Wood Finishes:High performance floor coatings
Surveyed 16 global Surveyed 16 global leadersleadersQueried on 10 propertiesQueried on 10 properties
SatisfactionSatisfactionImportanceImportanceTest ProcedureTest ProcedureDesired test resultsDesired test resultsTop competitorsTop competitors
New Product RoadmappingNew Product Roadmapping
Understanding Customers Emerging NeedsClear Wood Finishes: High performance floor coatings
Higher solids and lower VOC for formulation and polymer usage versatilityLower color development, high gloss capability and better in-can stabilityRapid early hardness development
Industry Satisfaction Gap (Importance x Dissatisfaction)(100% = Totally Unsatisfied on a "Critical" Property)
20% 18%23%
14% 12%22%
8%12% 12%
3%0%
10%
20%
30%
Dry Film
Appearance
Wear Resi
stance
Gloss/Sheen
Adhesion
COF
VOCReco
at & Dry T
imeFluid Resi
stance
Clarity/C
olor
Low-Temp Coale
scence
Satis
fact
ion
Gap
Comparison with Commercial Benchmarks
SANCURE ®OM -945
COMMERCIAL WB OMU - A
COMMERCIAL WB OMU - B
COMMERCIAL CWF - 1
COMMERCIAL CWF - 2
BASED ON COMMERCIAL WB OMUNOVEON WB OMU LEADING COMMERCIAL WB OMU
SANCURE®OM-945
COMMERCIAL WB OMU - A
COMMERCIAL WB OMU - B
COMMERCIAL CWF - 1
COMMERCIAL CWF - 2
BASED ON COMMERCIAL WB OMUNOVEON WB OMU LEADING COMMERCIAL WB OMU
250ExcellentYellow/AmberExcellent(No change in visc.)
31Commercial WB OMU - A
<130ExcellentNo change, Milky White
Excellent(No change in visc.)
45Sancure® OM-945
200PoorLight Yellow/AmberPoor, Visc. Increase33
VOCg/L
Early Hardness Development
Solution Color after 4 wk. in 120°F
Oven
120°F Stability
Solids, wt. %WB OMU Polymers
250ExcellentYellow/AmberExcellent(No change in visc.)
31
<130ExcellentNo change, Milky White
Excellent(No change in visc.)
45Sancure® OM-945
200PoorLight Yellow/AmberPoor, Visc. Increase33
VOCg/L
Early Hardness Development
Solution Color after 4 wk. in 120°F
Oven
120°F Stability
Solids, wt. %WB OMU Polymers
Commercial WB OMU - B
Road Map…then Benchmark
Sancure® is a registered trademark of The Lubrizol Corporation
Translate Satisfaction Gap into Value Proposition
Outstanding durability in a waterborne one-component Ideal for both DIY and Contractor marketsHigher solids ds excellent pigment compatibility –suitable for line-marking paints and specialty enamelLower VOC’s and reduced worker exposureExcellent in-can color stability and non-yellowing
Sancure® OM-945Waterborne Oil-Modified Urethane Dispersion
Sancure® OM-933 Waterborne Oil-Modified Urethane Dispersion
Traditional solids levelQuick drying, early mar and water resistance
© The Lubrizol Corporation 2006, all rights reserved
Benefits & Expected Results New Product Roadmapping
BenefitsBenefits- Promotes “outside-In” thinking over internal thinking- Quickly focuses team on product development objectives- Avoids project scope creep & second-guessing- Engages customers & prospects at 3 points:
• Initial survey• Feedback on industry survey results• Prototype offering based on customer input
- Builds customer confidence
Expected ResultsExpected Results- Faster time to market- Reduced development costs- Higher hit rate- Faster shelving of unattractive projects