How do you focus on just the critical issues when you’re analyzing VOC insights? Here, we look at the Pareto principle. This is part 4 of our blog series from our webinar “5 practical ways to influence managers for Voice of Customer (VOC) success”, by myself and Dr. Alyona Medelyan.
Check out the very first post here, the second post here and the third post here. This blog series gives you tips on how to make a strong case internally to get buy-in from stakeholders for your Voice of Customer (VOC) programme.
The Pareto principle – do more with less
The Pareto principle tells us that 80% of something is caused by 20% of something. Or in other words, if we were to tackle 20% of the issues we would actually see 80% gain. It’s a pretty good equation.
Here’s a great explanation from Wikipedia: “Pareto analysis is a formal technique useful where many possible courses of action are competing for attention. In essence, the problem-solver estimates the benefit delivered by each action, then selects a number of the most effective actions that deliver a total benefit reasonably close to the maximal possible one.
Pareto analysis is a creative way of looking at causes of problems because it helps stimulate thinking and organize thoughts. […] This technique helps to identify the top portion of causes that need to be addressed to resolve the majority of problems.
Once the predominant causes are identified, then tools like the Ishikawa diagram or Fish-bone Analysis can be used to identify the root causes of the problems. The application of the Pareto analysis in risk management allows management to focus on those risks that have the most impact on the project.”
How to use Pareto analysis for Voice of Customer
Let’s take a closer look. The critical factors you can see on this chart below are on the left axis. You will see the frequency, as in how often this particular issue is happening. On the right-hand axis, you see the cumulative percent. If you take issue number one, the “dose missed” plus issue number two, “the wrong time”, you get 83 + 92, together which makes a certain percentage of the total number of issues.
On the red line, which you can see on the first bar, 92 represents 20% of the total issues and together, these two bars represent 40% of the issues. And in the fourth bar it represents 60, and then where you can see the green line, you’re finally getting to the 80% cumulative cut-off.
If you were to work on these four vital issues, the “vital few”, you could ignore the “trivial many” and see roughly 80% of your problems solved. That’s the idea behind Pareto Analysis. This can help you to do more with less and focus on your critical few issues for VOC.
Actually, these types of techniques that previous blogs in this series have touched upon; taking a different view of your work and quantifying things, connecting the dots, speaking in the language of your stakeholders, making a compelling case to them – are all techniques that can be found in various templates in the ClearAction value exchange which is a great way for you to build your team’s capabilities.
How feedback analysis can help with decision making
To take an example, here’s a Thematic case study for a company called Melodics. Their product is an app that helps you learn how to play a musical instrument. Melodics had been debating within their organization whether or not they should be including lessons about music theory. Or, if the app should only include practical exercises, so users can simply play, and not have to worry about theory.
Being a topic of hot debate in the office, they needed to settle this once and for all. So, Melodics asked their customers what they thought by using an NPS survey. As a result, they were surprised by just how many people mentioned that music theory actually matters to them. Not only was it not an “unknown” anymore (as they had the data to prove it), but also, you can see the charts showing the relative importance of it, similar to how Pareto Analysis works. It would be interesting to draw the line and to find out whether music theory would fall into the 80% or the 20%.
This is just one example of some great insights you can find with a text analysis program like Thematic.