Using Voice of the Customer (VoC) to Improve Your Bottom Line
Voice of the Customer (VOC) programs have become a strategic asset for the most forward thinking and customer-centric business leaders. In fact, in the Vantive Best Practices of the Best Marketers Research Report, Chief Marketing Officers whose performance ranked them in the top quartile used VOC programs 68% more often than their lower performing peers.
From my consulting experience over the last 25 years I have discovered that most organizations think they know what their customers’ want—and more often than not are either partially correct or incomplete. Either scenario results with a cascading effect that degrades R&D, marketing communications, sales effectiveness, services delivery and customer experience (CX) objectives. The negative financial impact incurred in any one of these areas is a significant hidden cost than goes unnoticed by most business leaders.
A Recommended Framework
If you do not already manage a Voice of the Customer program, here’s a 10 step framework and some best practices to get you going.
Assess Culture. Despite the all too common self-proclamations and marketing rhetoric of being customer focused, most companies are product-centric, not customer-centric. Calling yourself customer-centric doesn’t make it so. It's important to understand that to achieve the true VOC benefits, the company must be customer-centric or be on a journey to become customer-centric. If your organization isn’t there yet, defer a VOC program, consider why and how to adopt a Customer Experience (CX) strategy, and scale down to some simple survey tools for the interim.
Assign Champion. Like all strategic business and technology initiatives, executive sponsorship is a pre-requisite. Additionally, a dedicated resource should be tasked to design the VOC methods, data schema and business processes as well as gather and act upon customer feedback. Because data resides in many information systems, a business analyst with cross-departmental relationships can be an ideal resource.
Set Objectives. For most companies, a VOC program will capture, categorize and prioritize customer feedback, expectations and preferences (by customer segment, more on that below) so that the company can orchestrate the right mix of culture, people, processes and technology in order to consistently delight their customers. In addition to weighting customer preferences, I’ve found it very helpful to organize preferences in a hierarchy. This will facilitate your business processes in a way that achieving one customer preference can add value or jump start related goals.
Design Processes. VOC can be performed manually or automated with technology, using inbound or outbound methods. Manual methods often include customer interviews, focus groups or reference programs. However, while these methods deliver qualitative analysis, they don’t scale well. You will need to leverage technology to achieve VOC automation in a way that continuously gathers customer feedback and dynamically routes that feedback so it can be easily analyzed and acted upon.
Segment Customers. Customers are not homogeneous so VOC programs should be based on tightly defined customer segmentation. Business to Business (B2B) organizations will want to segment customers by objectives and personas using both explicit (e.g. demographics) and implicit (e.g. transactions, activities and behaviors) criteria. Business to Consumer (B2C) companies will want to further include key performance indicators such as RFM (Recency Frequency Monetary), loyalty program attributes and social media behaviors. In addition to active customers, a customer segmentation best practice is to create a category for lapsed customers. This group is quite often a company's single biggest segment and can offer some valuable advice; and if that advice is acted upon and followed with a reactivation campaign can also deliver some big revenues.
Data Governance. It's important to apply as much customer data as possible to truly understand the VOC. Most companies manage customer data in many systems such CRM, ERP, marketing, billing, service management, email apps, survey tools, Excel and many other legacy and shadow systems. These disparate data siloes need to be bridged to consolidate and make sense of the customer profile. This is a big challenge for companies who manage a plethora of systems. Master Data Management (MDM) is a common data governance approach for managing multiple views of the customer by consolidating, normalizing, persisting and distributing customer data throughout the company so that it is accurate, complete and consistent. Don’t begin a VOC project before you have considered the data complexities and data integrity — and teamed with your IT colleagues.
VOC Tools. Voice of the Customer software applications are commonly called VOC Hubs and are often differentiated by their preference for inbound or outbound methods, ability to capture data with or without third party systems, and MDM or MDM-integration capabilities. VOC systems use many techniques such as email or online surveys, web self-service, online chat, website analytics, Quality Monitoring, EFM (Enterprise Feedback Management), text mining, speech analytics, case management and Natural Language Processing (NLP) Knowledge Management. Some of the marketing leading VOC vendors include Allegiance, Attensity, Autonomy (HP), Clarabridge, Confirmit, CustVox, CustomerVoice (Oracle), ForeSee, iSKY, Microsoft Dynamics CRM, NetReflector, Nexidia, Nice Systems, OpinionLab, Qualtrics, QuestBack, ResponseTek, Salesforce.com, Satmetrix, SynGro, UserVoice, and Verint Systems.
CRM Integration. A VOC best practice is to make sure the data acquired from customers integrates with your CRM system. When VOC questionnaires and surveys can be sent from and returned to the CRM system (without import/export or manual integration), the process can be automated and the correspondence can be personalized with customer data (i.e. products purchased, prior VOC feedback, etc.) More relevant surveys improve response rates and make the feedback more actionable. CRM systems can normally also tabulate VOC data from multiple data sources, append customer feedback directly to the Customer record, update the Customer’s activity feed (i.e. Microsoft CRM Yammer or Salesforce.com Chatter), forward alert notifications if customer problems or exceptions are identified, create and assign tasks for follow-up, cascade the data into KPIs and reports, and reveal patterns and correlations among customer feedback and company attributes (people, products, departments, locations, day of the week, etc.)
Engage Customers. Whatever engagement technique you use, a key success factor is to use both structured and open ended questions designed to understand the customer’s vision, objectives, supplier preferences, frustrations and measures of success. Also consider how each customer touch point (contact center recordings, email correspondence, marketing responses, social media comments, sales activities, new customer on-boarding, user group interactions) can contribute to a holistic customer view.
Measure Results. Demonstrating payback is what makes a Voice of the Customer program sustainable. While many companies use customer satisfaction metrics such as NPS, CSAT or customer loyalty, I highly recommend performance metrics which demonstrate revenues and clear ROI — such as customer up-sell, cross-sell, customer retention and Customer Lifetime Value (CLV). Be sure to time stamp your key metrics so that you can establish a baseline and show trending. As you might suspect, customers evolve, customer preferences change and VOC is a journey.
A Big Caution
Customers like to be heard, and many will be pleased to engage in your VOC program. However, consuming their time and then failing to act on their input will infuriate them. According to Gartner, while 95 percent of companies surveyed collect customer feedback, fewer than half bother to alert staff, much less inform their customers as to how their feedback was used. In fact, only 5 percent of the companies surveyed close the loop by alerting participants what was done based on their feedback.
If you do not have the time or resourcing to review and act upon customer feedback, don’t ask for it. There’s nothing worse than asking for input and then ignoring it.
The Point is This
VOC benefits include faster customer resolutions (with fewer hops and escalations) and improvements in customer experience as evidenced with metrics such as Net Promoter Score (NPS) and customer loyalty. Financial benefits include increases in customer spend, customer share and customer retention.
Gaining an accurate, complete and continuous VOC is an asset that separates strategic customer strategies from tactical and will dramatically influence the company’s ability to achieve its most important objectives. When you really know what your customers want, not just what you think they want, you can architect business strategy, design solutions and craft messaging that truly resonate with customers and thereby provide a significant uplift in marketing effectiveness, sales conversions, satisfied customers and ultimately Customer Lifetime Value.