Cover Story: Let Customers Be Your Guide
The information Stein hoped to collect went beyond simply, "Does the customer want to renew?" HMS sought to learn what its products meant to its customers, how they determined the value of HMS, what the positives and negatives were of their experiences with the company, and how satisfied they were. HMS also wanted to know what homeowners thought about its communications, contact methods and whether they would be open to more engagement.
These weren't objectives that could be reached with a simple Web survey, so HMS enlisted customer relationship marketing consultancy firm Ernan Roman Direct Marketing (ERDM) to assess the needs of its customers—both the corporate clients who sold its products and the end consumers (homeowners)—through an in-depth interview process that Ernan Roman, ERDM founder and principal, specializes in called voice-of-the-customer (VOC) research. Roman recently published a book about applying VOC research titled, "Voice-of-the-Customer Marketing: A Revolutionary Five-Step Process to Create Customers Who Care, Spend, and Stay," which includes a case study on HMS and other companies ERDM has worked with. (See the sidebar for more details on the 5-step VOC process.)
VOC research is essentially a customer needs assessment drawn from hour-long phone interviews with customers, prospects, lapsed customers, etc., who represent targeted segments, or "research cells," of the company's database. HMS drew its cells along two main categories—customers who renewed and customers who didn't—and divided each into four subcategories:
• Homebuyers who had purchased a home warranty
• Home sellers who had purchased a home warranty
• Homeowners who had filed a claim
• Homeowners who had not filed a claim
"Given that this is meant to be actionable, strategy-driving research," Roman says, "a key point [in defining the research cells] is, what will you be able to act on? What will you be able to scale?" In other words, can you segment the rest of your database the same way as your research cells and still have large enough slices to be able to apply any insights to full market- ing campaigns?