Voice of the Customer: What Is It and Why Does It Matter for CX?
By Scott Clark
Voice of the Customer (VoC), a term coined by Abbie Griffin and John R. Hauser in a 1993 MIT paper, is a statement of your customers’ experiences, feelings and expectations regarding your brand.
To capture VoC, brands gather data from and about customers through reviews, surveys, interviews and metrics. They then use this information to fuel their understanding of customers’ desires, expectations, preferences and needs related to their brand, offerings or industry.
The data gathered lets companies align products and customer service with customer desires, allowing them to meet expectations in areas such as cost, quality, safety and social and environmental responsibility. Therefore, it seems natural that a VoC program can serve as the basis for optimizing overall customer experience (CX).
Despite the benefits of Voice of the Customer programs, many business leaders don’t quite understand what they entail and how to use them. This article will explain the intricacies of VoC and how it can help create exceptional customer experiences.
Benefits of a Successful VoC Program
Voice of the Customer programs deliver more than just organized customer feedback. They also come with the benefits below:
More Effective Campaigns
VoC programs capture your marketing and sales teams’ data to create smart, targeted campaigns that deliver excellent CX along every touchpoint in the customer journey.
Ottomatias Peura, CMO of Speechly, said he uses data gathered from VoC programs as marketing and sales copy, something he finds extra effective because it incorporates customers’ actual words.
“The best person to tell customers how the product can provide a solution to their problem is another customer,” Peura said.
Improved Products and Services
Additionally, brands can use VoC programs to design and produce better products and offer optimized services.
Ian Wright, CEO of Our Life Plan, said, “VoC programs are instrumental in improving products or services to provide exceptional customer experiences,” noting that “we’ve seen that in businesses related to retirement and estate planning.”
Increased Customer Retention Rates
It’s no surprise that VoC programs, which aid the creation of excellent customer experiences, lead to increased retention rates.
According to one report from Aberdeen Group, VoC programs increase customer retention by up to 55%, boosting overall profits.
Greater Overall Profits
As mentioned above, VoC programs can increase customer retention rates. According to Harvard Business School, increasing retention by 5% increases profits anywhere from 25% to 95%.
VoC also decreases customer services costs each year by more than 23%, improves opportunities for cross-selling and increases revenue by 48.2% year-over-year (Aberdeen Group).
The 3 Steps of the VoC Process
The VoC process involves three clear steps:
1. Gathering Customer Feedback
Gathering customer feedback is the first step in any VoC program. Remember: the key to success is to find multiple rich data sources. If you don’t, the insights you gather could be incomplete or unhelpful.
Think about how you can gather data along each touchpoint in the customer journey. For instance, you might capture information from:
- Chat logs
- Forum posts
- Feedback forms
- Website analytics
- Mobile app data
- Customer service interactions
- Social listening and engagement
Beyond merely asking for feedback (or gathering data points), Peura said it’s important to “ask specific questions that allow [a customer] to formulate their response in a way that addresses problems, solutions and outcomes.”
Once you have the right kind of data, you can enter it into spreadsheets or specialized VoC platforms and move on to the next step: analysis.
2. Analyzing Data
Now it’s time to analyze the data you’ve gathered to uncover trends, expectations, needs, desires and pain points, leads that will eventually become actionable insights.
Peura said, “After we collect a large amount of these responses, we put them into a spreadsheet and start looking for similarities. Many times we find customers respond with similar language and patterns.”
Brands use these uncovered trends to optimize certain processes, such as creating product and service offering benchmarks.
In Peura’s case, he said they used the language that came up most frequently in feedback to better model how customers speak about Speechly’s products, an attempt to improve marketing and sales communications.
Brands can also use these trends to craft customer follow-up questions and better understand individual customer experiences.
Many VoC platforms facilitate the creation of analytics reports by separating feedback by keyword, phrase, product or specific metrics.
3. Utilizing Actionable Insights
With your data analysis complete, it’s time to act on those new insights. Your action plan will look different depending on both your VoC-related goals and the results of your analysis.
Some examples of how you can use trends to optimize your brand include:
- Products: Make design changes, adjust price points, announce new product launches, etc.
- Customer service: Implement new training programs or purchase additional employee tools.
- Sales: Introduce one-click purchasing, create guest checkout, reduce friction areas, etc.
- Customer communication: Expand to more channels, reduce response wait times, introduce live chat, etc.
- Websites: Develop easier navigation, increase font size or improve mobile functionality.
- Apps: Offer more download opportunities or decrease media asset load times.
- Marketing: Shift style or tone of branding messages, change frequency of campaigns, optimize send times, etc.
Beyond using VoC data to address brand-wide enhancement, you can also use insights to address problems affecting individual customers.
Of course, the VoC process is not truly complete at this point. It’s an iterative technique brands must evaluate over time and continually improve.
Types of Feedback Used in a VoC Program
According to Wright, “VoC programs enable a business to dive deeply into both qualitative and quantitative data to understand their customers’ needs, experiences and perceptions about their products or services.
Above, we briefly touched on some ways to gather this data or feedback. Now we’re going to take a deeper dive into the three categories that make up that feedback: direct, indirect and inferred.
Direct feedback is collected directly from the customer. It often involves asking questions, such as “How likely are you to buy from us again?” or “On a scale of 1–5, how satisfied were you with your experience?”
Businesses have many options for soliciting direct feedback, including:
- Customer interviews: Opportunities to gather in-depth feedback regarding the performance and issues surrounding your brand’s products and services. Can be conducted one-on-one or in groups via various channels, including phone, email and in person. Though costly and time-consuming, in-person interviews are the gold standard for collecting this kind of data, with the added benefit of building loyalty among the customers who participate and feel heard.
- Surveys: Typically conducted online, they can provide very specific feedback about known issues. It’s vital to ask the right questions and choose the right type of survey design (drop-down, multiple-choice or open-ended). Don’t neglect the option of in-person surveys, especially at brick-and-mortar locations, as a way to gather more in-depth feedback. Keep surveys concise, and make it easy for customers to participate.
- Live chat: 48% of people prefer this avenue for contacting a company, according to Microsoft. Fortunately, brands can capture VoC data from chat logs. For instance, you can attach follow-up surveys to chat conversations (and possibly incentivize participation) to understand the effectiveness of service reps.
- Recorded calls: Use call recordings to capture customer expectations and perceptions. This method of collecting feedback can require a significant time investment. However, it provides valuable data regarding customer pain points (and it helps brands design better customer service training).
- Focus groups: This method is ideal for verifying insights gained from surveys and interviews. Gathering a dozen or so customers to share opinions across your company’s touchpoints can be especially valuable when you want to test new concepts or priorities.
- Feedback forms: Adding a feedback form to your website makes it easy for customers and prospects to share their voice at any time. A consistent set of thought-provoking prompts can provide long-term data. In addition, you can also add questions to capture VoC on immediate issues.
Other ideas for collecting direct feedback include setting up a customer advisory board, asking for feedback via text or even designing a mystery shopping program.
Indirect feedback is when a customer speaks about a brand but not to the brand itself. Fortunately, social listening can help companies in this regard, allowing your organization to track mentions on social media, in reviews and within industry articles.
You can glean valuable indirect feedback from the following sources:
- Social media: Enables real-time conversations directly with customers. Often allows brands to solve problems before they mushroom — if they act quickly enough. Feedback gathered this way is valuable because it often lacks a filter. However, it can be hard to quantify.
- Online reviews: Nearly all of today’s customers (95%) read reviews, and 86% say they’re essential when making a purchasing decision (PowerReviews). Therefore, it only seems natural that reviews will provide an insightful window into VoC.
Inferred feedback is behavioral, transactional and operational data from a brand’s website, email marketing and mobile apps.
Examples of inferred feedback include click-throughs, transactions, purchases, time on page and shopping cart abandonment.
For instance, say you compare two similar-length articles on your blog. One has an average on-page time of three minutes, the other eight minutes. Therefore, you can infer that customers prefer the latter article — whether due to the topic, organizational layout, graphic elements, etc., is up for you to determine.
Plenty of tools exist online to help you collect this data, such as Google Analytics.
What Are VoC Metrics?
The goal of Voice of Customer programs is to gain actionable insights, also called VoC metrics. Organizing these metrics helps your brand prioritize goals so that they’re more consistent with the goals of customers. When VoC metrics are used to make changes, a more consistent, exceptional customer experience is the result.
Ryan Tamminga, VP of Customer Success at Alchemer, believes VoC programs enable brands to be truly customer-focused.
“To truly be a customer-centric business your customers should see themselves in your business and everything you do,” he said. “The only way for a business to know how to make their customer’s experience better is by listening to what their customers are telling them and to make the decisions that are in their best interest.”
Understanding and measuring key VoC metrics is the key to uncovering actionable insights. Each metric looks at a different aspect of the customer journey, such as ease of use, satisfaction and customer loyalty.
As part of your VoC program, you should work with the following metrics:
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- Net Promoter Score (NPS): Tells a brand if a customer would recommend its product, service or business to others. It’s typically phrased as such: “Based on your experience with us, how likely are you to recommend us to a friend or colleague, on a scale of 0 to 7?”
- Customer Effort Score (CES): Defines the effort required for a customer to do business with a brand. Phrasing of CES questions looks like: “To what extent do you agree with the following: [Company name] made it easy for me to purchase [what I wanted].”
- Customer Satisfaction Score (CSAT): Reveals whether customers are satisfied with their interactions with your brand. It’s typically phrased as: “On a scale of 1–5, how satisfied were you with your experience?”
- Customer Loyalty Index (CLI): Measures customer loyalty and indicates whether they will be a repeat customer. Phrasing can look like: “How likely are you to buy from us again?” or “How likely are you to try our other products or services?”
- Customer Lifetime Value (CLV): Measures an individual customer’s potential revenue based on past, current and anticipated future spending trends. Brands can calculate it by multiplying the average purchase value of a customer with their purchasing frequency. Then multiply that number by the average customer lifespan.
- Repurchase Ratio: Looks at whether the customer will purchase from the brand again. Relevant questions are typically phrased as such: “How likely are you to buy from us again?”
- Would You Miss Us? (WYMU): Asks if a customer would miss the brand if it no longer existed. Here, companies use questions like: “Would you miss [business name] if it no longer existed?”
Keep in mind that the metrics you collect and analyze should fit your brand’s goals. For instance, if you want to eliminate pain points during the online checkout process, the WYMU metric won’t help much.
Plus, you want to remember not to lose sight of the actual feedback received from customers when bogged down in this data. In a way, that unadulterated information is the most valuable part of a VoC program.
What to Do When a VoC Program Produces Negative Results
Is your VoC program producing negative results? Well, that could be both a good and bad thing.
While it’s always nice to receive positive feedback, negative comments offer real opportunities to grow.
For instance, say our CES metric comes back with poor results. You can use this information to spur a deep dive into your website, allowing you to identify potential issues and bottlenecks.
You might discover that pages are slow to load or navigation buttons are too small to click on mobile. Once you’ve identified these problems, you can eliminate them, improving overall CX.
On the other hand, poor results could mean you’re doing something wrong in your overall VoC strategy.
You might be:
- Asking the wrong questions
- Using unprocessed or messy data
- Misconfiguring data during analysis
Come up with a set of questions to ask everyone involved in the VoC program and use responses to determine possible shortcomings.
For instance: What are your overall goals? Do your feedback questions align with those goals? Where do you collect data? Do you collect data from multiple channels? What types of data do you collect? How do you assess this data?
VoC programs allow brands to use feedback to better understand how customers think and feel, illuminating an important part of the decision-making process.
Today, Voice of the Customer is integral to many business strategies. The benefits of such a program touch all areas of a company, spanning beyond marketing, sales and customer service.
Ultimately, by listening to customers and making related changes, brands can create exceptional experiences and stand out from competitors.
SOURCE CMS Wire