Explicating Hearing the Voice of the Customer as a Manifestation of Customer Focus and Assessing its Consequences* Neeraj Bharadwaj, John R. Nevin, and Jeffrey P. Wallman It is often asserted that hearing the voice of the customer (VOC) can generate meaningful product and process innovation. Minimal empirical attention has, however, been devoted to evaluating this claim. The paucity of academic research exists, in part, due to the lack of an underlying conceptual foundation for the VOC concept. An opportunity thereby exists to impart theory, and evaluate whether hearing the VOC can indeed lead to favorable consequences. This research construes customer focus as a market-sensing capability which manifests itself in the key organizational processes (i.e., intelligence generation and continual performance assessment) and values (i.e., a customer orientation serves as the guiding principle) that allow the VOC to be heard throughout the organization. Those manifestations are hypothesized to impact positions (i.e., relative [task-related] performance) and outcomes (i.e., customer loyalty). The results based on data obtained from a cross-sectional survey research design fielded in a supplier-business customer context provide empirical support for the favorable consequences of being customer-focused, and support the need to consider moderating variables. This paper advances theory by (1) answering the call to examine the capabilities that underlie a customer-focused organization; (2) establishing empirical support for the (a) linkage between hearing the VOC and acting on that information, (b) elusive relationship between acting on the VOC and future buyer intentions, and (c) sources,positions,outcomes model as a path to achieving competitive advantage; (3) demonstrating that being customer-focused does not have a direct effect on customer loyalty, thereby revealing a result different than that obtained in the consumer empowerment literature; and (4) demonstrating the importance of key moderators, namely (a) that relative (operational) performance has a strong positive effect on loyalty in relationships characterized by lower switching costs, and (b) that the effect of customer focus may lessen over time, implying that core capabilities may evolve into core rigidities. Additionally, this research contributes to business practice by providing managers with an understanding of how to hear the VOC throughout the firm (i.e., how to become a customer-focused organization), and offering guidance on how to manage buyer–seller relationships. Introduction Make sure the customer’s voice is part of your discus- sions and decisions . . . continually. (Drucker, 1999, p. 67) C ustomer focus is often described as a critical basis for achieving competitive advantage. Business executives regularly extol its virtues in unifying employees and exhort its role in driving finan- cial results (e.g., Welch, 2001). Theorists routinely con- jecture that it provides the foundation for meaningful differentiation (e.g., Gulati and Oldroyd, 2005), and assert its significance when devising business strategy (see epi- graph). In recognition of the importance ascribed to the topic by academics and practitioners alike, the Marketing Science Institute (MSI) now identifies that learning about the capabilities that underlie a customer-focused organi- zation is a paramount 2010–12 research priority. Although there is emerging consensus that becoming more customer-focused is a strategic imperative, how it can be achieved is not fully understood. To this point, one set of scholars has gone so far as to assert that many firms “have no idea how to implement this transformation” (Rust, Zeithaml, and Lemon, 2000, p. ix). Another set, though, submits that an important trait of a customer- focused innovator is an “ability to translate customer Address correspondence to: Neeraj Bharadwaj, Fox School of Business, Temple University, 1801 Liacouras Walk, A521 Alter Hall (006-09), Phila- delphia, Pennsylvania 19122-6083. E-mail: nbhar@temple.edu. Tel: 215- 204-8454. * The authors thank Jan B. Heide, Stanley F. Slater, David G. Mick, and J. Jeffrey Inman for helpful comments on an earlier version of this manu- script. They also thank the anonymous reviewers and the editor for their helpful guidance throughout the review process. The lead author also thanks the Institute for the Study of Business Markets (ISBM) for support provided for data collection. J PROD INNOV MANAG 2012;29(6):1012–1030 © 2012 Product Development & Management Association DOI: 10.1111/j.1540-5885.2012.00954.x