models of customer needs assessment

Customer Needs AssessmentMassMEDIC IGNITE

Maria ShepherdData Decision Group, April 2008

Data Decision Group• Formed in 2006:

• Quantitatively/qualitatively size market opportunities • Judge/develop new technologies • Assess prospective acquisitions

• We have expertise in:• Pricing studies • Voice of the Customer • Web surveys • Focus groups • In-depth interviews • Primary and secondary market research

Instructor: WPI/MassMedic Medical Device Certificate Program• Objective: Foster productivity and profitability for Medical Device

Industry Leaders• http://cpe.wpi.edu/Industry/advanc505.html)• Marketing, Customer Needs Assessment, Product Planning &

Forecasting, Clinical Studies, Product Design

http://cpe.wpi.edu/Industry/advanc505.html

Presentation Objectives• Identify and measure a sustainable market

opportunity • Apply different tools of customer needs

assessment (data collection, interviews, competitive analysis)

• Develop an effective business case • Create value for the enterprise

Presentation Take Aways• Be familiar with a customer needs

assessment (CNA) matrix• Understand the difference between an

outcome and a solution• Know the difference between qualitative

and quantitative analytical techniques• Understand the relationship between a

CNA matrix and a marketing specification

Key Points

• All products require a clinical/business/competitive assessment of customer use/need

• The medical device industry is data rich! • Data can be generated to support decision-making and

assessment • Voice of the Customer guides product design to

identify/rank requirements, identify unmet needs• Two types of Market Research

• Qualitative• Quantitative

• When product design is the desired outcome, CNA should result in a Marketing Specification

Basic Tool to Size Market Opportunities

• Step 1. All US procedure rate data begins with the US government• Most recent data is 2005• Measured in procedure

rates• Until recently, US percentages were calculated as 50% of the WW market, but this is expected to change

• http://www.cdc.gov/nchs/about/major/hdasd/listpubs.htm• Step 2. Trends must be applied to get accurate

procedure rates• To current year• 5-10 year projection

http://www.cdc.gov/nchs/about/major/hdasd/listpubs.htm

http://www.cdc.gov/nchs/about/major/hdasd/listpubs.htm

Customer Needs Assessment MatrixDesired

OutcomesDefinition Rationale Performance

ExpectationImportance Satisfaction Opportunity

1.1 A word or phrase using the language of the in the customer that states the need, issue or

problem to be solved ( e.g. ability

to reach treatment

site, visualization,

increase positive clinical

outcome).

Complete description

of the customers

desired outcome. This must

be completely

agreed upon by customer and team.

Provides the

reason that the

attribute is important

to the customer.

List the customer requirements in

qualitative, quantitative, or

comparative terms. These may be based on clinical outcomes, competitive products,

regulatory or international standards.

This is best defined as range spanning the desired and minimal requirements of the

customer.

What is Customer Needs Assessment?Whether you are designing

a product, licensing a technology, or buying a company, it is important to know how to:

• Assess, compare, or develop a product concept to the needs/desired outcomes of the customer

• Define the desires of the customer– are they clinical, economic, other?

• Have you/your team have an in-depth understanding of all of the customers DESIRED OUTCOMES

• Understand the customer’s environment, agendas, anything/ everything that affects the use of this medical device in the marketplace

Planning and

Forecasting

Risk Managemen

t

Manufacturing

Clinical Studies

Regulatory

Reimburseme

nt

Product Design

IP

Marketing/

Customer Needs

Assessment

Why do it? What is the impact of CNA on the enterprise?• Productivity, performance, profit

• Team knowledge about the customer:• reduces team dissension • facilitates communication

• No need for 1 - 2 members to constantly sell their “vision” to team members

• Reduces potential for error• Informed team members understand how to perform their

functions • What does this do for the company?

• Faster time to market• Better products, fewer post-market disasters• Higher morale• Lower costs• Higher profitability

What happens to kick-off the CNA process?• DRAFT marketing spec created• A full CNA can be Voice of the Customer,

or any other method that gets the entire team to common ground in:• A detailed understanding of the customers

needs/desired outcomes• Generally qualitative, in-depth interviews

• The ability to articulate customer needs to integrate them into all respective functions

• Regulatory, reimbursement, etc.

CNA MatrixDesired





to reach treatment



outcome).


of the customers


be completely


Provides the

reason that the


to the customer.






customer.

Voice of the Customer Objectives & Issues

• Objectives• A detailed understanding of the customer’s

requirements • A common language going forward for the team• Key input for development of well-selected design

specifications for the new product or service • A springboard for product innovation

• Issues• Gathering unbiased data. • Customers often do not know, or cannot effectively

communicate their actual needs and requirements

Qualitative Market Research• Qualitative research gets in-depth

information that is:• Rich in detail• Explains the environment of the customer• Describes subtleties that affect buying decisions• Helps define vague terms like “ease-of use”• Helps the entire team understand the language

of the customer• Identifies the desired outcomes of the customer• Identifies unmet needs that may “leapfrog” the

competition

Quantitative Market Research• Quantitative surveys get information that:

• Validates results from qualitative research to ensure they are aligned with customer’s true needs/ desired outcomes

• Is statistically significant and reduces decision making risk

CNA MatrixDesired





to reach treatment



outcome).


of the customers


be completely


Provides the

reason that the


to the customer.






customer.

A numerical rating or ranking

designation the

importance of the

outcome to the customer

Determining Importance

• How does all this utility get reduced down to two buttons?

• Prioritization• A clear understanding of

the importance of the customer’s expected outcomes

Life is about trade offs• Buyers want all of the

most desirable outcomes at the lowest possible price• High burst pressure with low

withdrawal force• Sellers want to maximize

profits• Low COGS and development

expenses

• If ignored, trade offs manifest themselves• in development• on prototypes• at product launch

• Basically, when it’s too late =

Trade Offs• We need to make trade-offs,• But who should make them?• The customer, of course.• But they don’t want to.• It is important to push the trade-off decision

to the customer…..• …..or else you’ll end up making them.

How do push the trade-off of outcomes decision to the customer?• Preference queries

don’t always work well• On a scale from 1 to 10

how important is:• The brand you

prefer?• The balloon's

deflation rate?• The withdrawal

force?• The burst pressure?

Average Importance Ratings

7.5

8.1

7.2

6.7

0 5 10

Burst Pressure

Withdrawal force

Deflation Rate

Brand

Not very actionable!

Average Importance Ratings

10

10

10

10

0 5 10 15

Burst Pressure

Withdrawal force

Deflation Rate

Brand

Conjoint Analysis• A more effective question is

Which balloon would you prefer . . ..1 lb withdrawal force

at 5 Atm burst pressure

or .5 lb withdrawal force

at 9 Atm burst pressureChoose left, you prefer lower withdrawal forceChoose right, you prefer higher burst pressure

• When respondents are forced to make difficult tradeoffs, we learn what they truly value• Conjoint is a way to learn how people make trade-offs when confronted with different outcomes or features• Mimics the real world• Helps identify market segments

• Maybe 50% want each type of balloon

Conjoint Analysis• Conjoint assumes the value (utility) of a product is

equal to the sum of its parts (features)• Angioplasty balloon = burst pressure + withdrawal force +

sales rep + clinical outcomes + company reputation + …• The trade-off comes from the fact that burst pressure and

withdrawal force are both functions of balloon material strength.

• Conjoint can be expensive• Difficult on a project with low revenue expectations and a

small budget, Such as commodity items or line extensions• However, commodity items often have a greater

need for conjoint analysis• Difficult product differentiation• Low margins

CNA MatrixDesired





to reach treatment



outcome).


of the customers


be completely


Provides the

reason that the


to the customer.






customer.


designation the

importance of the


A numerical rating of how satisfied the customer is

with the outcome

when using products on the market

Completing the Opportunity Algorithm

Opportunity=Importance + (Importance-Satisfaction)

Where(Importance-Satisfaction) cannot be less than

zero

• Double weights Importance• Ensures that a high satisfaction doesn’t detract

from Importance

Final Questions to Ask• Have we interacted with all of the important

types of customers in our target market?• Are we able to see beyond outcomes related only

to existing products in order to capture the latent needs of our customers?

• Do these results lead to other product development opportunities?

• Have we considered other competitive modalities to treat the disease state such as pharmaceutical, biologic, or new forms of therapy?

Final Questions to Ask• Which of the customers we contacted would

be good participants in our ongoing development efforts?

• What do we know now that we didn’t know when we started? Are we surprised by any of the outcomes?

• Did we involve everyone within our own organization who needs to deeply understand customer needs?

• How might we improve the process in the future?

CNA MatrixDesired



1.1 A word or phrase in the

customers terms that states the

need, issue or problem to be solved ( e.g. ability

to reach treatment


increase clinical

outcome).

Description of the

customers desired

outcome. This must

be synergized customer and team.

Provide the

reason that the


to the customer.





This is best defined as range spanning the customers desired and minimal requirements.


designation the

importance of the


A numerical rating of how satisfied the customer is

with the outcome

when using products on the market

A calculated value derived

from the Importance

and Satisfaction

scores

models of customer needs assessment

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