TVP – Metric 7 Customer Satisfaction

Resource Type
Tool
Authors
Alan Fusfeld, Innovation Research Interchange
Topics
Innovation Metrics, Stage-Gate, Tools and Techniques
Associated Event
Publication

Background | User Guide | Program Contents | Stakeholders | List of Metrics

1. Metric Definition

External or internal customer evaluation of the capabilities and output of the R&D function or the innovation process.
Measures of external (end-customer) satisfaction may be such metrics as ratings of quality of technical personnel or technical capabilities, or technology benefits within products or processes.

Since the immediate customer of R&D is normally the businesses within the corporation that R&D serves, internal customer satisfaction measures customer satisfaction in areas such as engineering, marketing, or manufacturing. Typical metrics might include on-time technology delivery, competitiveness or appropriateness of the technology solutions delivered, and overall satisfaction with the R&D track record of technological support.

2. Advantages and Limitations

There are few disadvantages to good customer satisfaction metrics. In the case of external, or end-customer satisfaction metrics, one complication may be that the entire innovation cycle is under review by the end customer. A bad grade by the customer, while a valid rating of the corporate innovation process, may not be merely an indictment of the R&D operation, but a judgment of the overall product development process within the company, involving manufacturing and product engineering, market forecasts, consumer needs and attitudes, and competence of corporate management. One the other hand, a well-thought-out customer satisfaction metric (or set of metrics) for the internal or immediate customer within the corporation, normally the corporate businesses and their various R&D-related organizations,  may be the key diagnostic to indicate that R&D processes are lacking and need adjustment or redesign. The R&D organization itself is probably better served with well thought-out internal metrics than with external metrics that complicate the diagnostic process for R&D when problems are indicated.

3. How to Use the Metric

External customer satisfaction metrics will normally be marketing-related or implemented. One variation would be to use a marketing survey, in which various aspects of technology benefits are rated on a five-point scale.

There are two dimensions for internal customer satisfaction metrics, strategic and tactical.

Strategic metrics deal specifically with whether the R&D function is meeting the strategic needs of the customer. The review process might involve matching technology and product roadmaps in a joint meeting, in which technology timing mismatches are resolved. Information can be exchanged; technology previews by R&D to alert the businesses to possible market-creating or market share increasing discontinuities, and the businesses to share future market window and product definitions with R&D. Various metrics can be used, including the five-point rating system mentioned above, or a metric which highlights number or percent of mismatches between product and technology roadmaps.

Tactical metrics deal with whether specific projects are meeting the goal or delivery requirements of the internal customer base. For technology projects in the latter stages of development (near to or entering product development), regular project reviews with the intended customer(s) is important. At quarterly or perhaps semiannual reviews, customer and R&D representatives join in a review of project progress. A useful metric in this case is a report card which each customer representative is required to fill out in the review meeting. This is a very simple questionnaire which has three to five survey questions on project progress, and suitability of both the project and the technological approach to satisfy the customer(s) needs.

Typical questions might be:

• Does this project meet your product technology needs?
• Do project milestone dates meet your market window?
• Have any strategy changes on your part not been addressed?
• What is the overall project score (typical scale one to five)?

As a related metric, trend analyses can be made both by project and organizationally.  

Overall, it is very important to track internal and external customer satisfaction to some degree.  If the organization is relatively new to suck tracking, deciding on some simple dimensions to measure such as on-time delivery and degree of fitness for purpose will be an excellent start.  It is also a good idea to consider whether the quantitative R&D metrics can consistently be associated with these qualitative measures.  If so, tracking both will greatly aid discussions of R&D investment and strategic alignment by providing data to aid in managing these activities using facts.

4. Options and Variations

One variation on the customer satisfaction process is to establish steering teams to address technology, business and market issues, and provide guidance to the R&D organization on strategic issues. For external issues, the teams might consist of focus groups that meet periodically, or focus teams that convene groups which are diverse either geographically, ethnically, or with respect to age group. The focus might be on functional needs that technology capabilities address. The metric would be meetings held, or issues addressed and settled. Another metric might be problems surfaced to be addressed and reported on by the R&D team.

Internal issues might be addressed by customer teams composed of manufacturing, engineering, marketing, financial, and related personnel (including even external consultants) who provide guidance and assist in forming cross-functional project teams. Appropriate metrics are meetings held, issues settled, or problems surfaced. An ongoing metric can also keep track of the percent of problems addressed and resolved vs. those surfaced.

5. Champions and Contacts

 

6. References