Close-up on MSC Industrial Direct - Case Study in Voice of Customer


• Founded in 1941
• One of the nation’s leading distributors of metalworking and maintenance, repair, and operations (MRO) industrial supplies
• Offers over 600,000 products

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MSC Industrial Direct is a Fortune 1000 industrial supply company founded in 1941. Like all the companies whose case studies we are sharing with you in this book, MSC has customers it must keep satisfied and loyal, and it faces real and ever-shifting market challenges in doing so

To resolve some of those challenges, MSC began by adopting a core principle of this book: in times of rapid market change, the wisdom of the customer is the only reliable constant. While MSC prides itself on staying close to its customers and employs many methods to capture customer feedback, senior management at MSC decided it was time to ask customers for guidance and help in a manner that would provide the most unbiased information.

To understand the company’s decision, you will need a little background. MSC distributes over 600,000 items to a broad, diverse base of customers that range from small manufacturing companies to Fortune 1000 companies—as well as customers at many state and federal government accounts. MSC reaches its many customers through a variety of sales channels: direct mail, outside salespeople, telesales, and the Internet.

As Rich Bonfiglio, director of customer marketing at MSC, explained: “Culturally, MSC’s internal priorities are clear: the primary goal, up and down the organization, for everyone from senior executives to frontline associates, is to provide an extremely high level of focus on providing exceptional service to every customer, on every order.” Many companies claim to have this kind of customer-focused culture, of course, but MSC’s actions in the marketplace show that MSC does in fact walk its talk: customer feedback is solicited at every level, in formats ranging from online and telephone surveys, to discussions with direct salespeople, to one-on-one contacts with the CEO.

Given MSC’s culturally reinforced connection to its customer base, and its willingness to reach out in many media and listen to what it heard, one might have been tempted to conclude that the company “didn’t need” VOC research. That, however, would have been a mistake because the challenge MSC faced was not one that could be resolved with a survey or even by a call or two from the CEO.

Why Conduct VOC Relationship Research?

According to Rich, “The recession that bogged down the United States (and indeed the global) economy beginning in late 2008 brought about a major change in a specific, and significant, segment of the MSC customer base. The problem was that buyers in this segment abruptly changed their purchasing pattern.” Unlike many companies that faced the challenge of adjusting to the grim realities of the recession, MSC didn’t begin by assuming that it already knew the answer to those questions. Instead, management worked from the assumption that they didn’t know.

“The easy response we could have used to explain what was happening,” Rich told us, “was the answer that seemed the most obvious: the
overall economic landscape was causing customers to stop placing orders with us. The problem with that explanation, though, was that
other customer segments were not exhibiting the same degree of change in behavior. If the recession really was the most important fac-
tor affecting purchases, it should have been affecting all of our customer groups roughly equally. Clearly, it wasn’t. So we knew we had
some research to do. We needed to know what was really happening, whether we were losing customers to the competition, and, if so, where
were they going and why.” Quantitative customer surveys conducted internally by MSC indicated no issues related to product availability, pricing, or service. Both
purchasing and nonpurchasing customers had the same high regard  for MSC.

This data raised the question: If customers were satisfied with MSC, why were some of the customers buying so much less than others?

Developing and Planning the VOC Relationship Research

Here are the guidelines we used to help MSC develop objectives that would drive the VOC Relationship Research.

• Define a clear set of issues or opportunities, and develop a concise set of VOC research objectives to address these specific issues.

• Do not define your objectives too broadly. Stay focused on the issue at hand so you’ll gain an in-depth understanding and there- fore be able to develop actionable strategies and action items.

• Don’t create too many objectives; each objective will require a number of questions in the Interview Guide. If you end up with too many questions, you will lose the value of the in-depth discussions and insights that the VOC Relationship Research provides. In accordance with these guidelines, the following objectives were defined for the MSC VOC research:

1. Determine the impact of the economy on spending in the target segment.
2. Identify the factors that drive “When to buy.”
3. Identify the factors that drive “What to buy.”
4. Identify the factors that affect “Whom” (which companies) the people in this segment buy from.
5. Determine whether any suppliers receive the majority of the customers’ orders and why.These were the driving challenges that the VOC research had to
address. These were the objectives of the VOC. A solid VOC research project typically has between 5 and 10 objectives.

Two important tests of VOC objectives are these: Do the objectives we’ve identified lead us toward important business questions that cus-
tomers and prospects care about answering? And, once we know these answers, will we be able to act on them?