Customer experience practitioners often ask the following question: “How do you measure the monetary value of a Voice of Customer program?”. The simplest way to answer that question is the following equation:
Happier customers = increased profitability
At a macrolevel, evidence shows that companies exhibiting an ongoing commitment to the customer experience show higher percentages of growth rates than companies responding slowly to the customer experience. A Voice of the Customer program delivers timely and relevant data that help drive the systematic improvement of the customer experience. This process, however, takes time to pay off financially. The real challenge, therefore, lies within making a business case that determines the VoC initiative’s return on investment at a microlevel. In other words, you must prove that a VoC program generates business value to justify the ongoing investment.
How to measure the ROI of a Voice of the Customer program
In business contexts we measure value in terms of money. As a result, business executives need to know the monetary value of expenditures. This information helps them assess benefits against costs to determine the value delivered. The problem with VoC initiatives is that they produce qualitative benefits which you cannot measure with traditional accounting metrics. For that reason, it is necessary to establish new measures of value that you can tie back to your traditional accounting metrics. These measures of value will help you quantify the ROI of a voice of customer program and enable you to convert its intangible benefits into monetary benefits. Here is how to achieve that:
Establish the main business outcomes various stakeholders expect to achieve with the VoC program
Within your organization there are different stakeholder groups involved with the VoC program. These groups are tasked with key responsibilities in terms of implementing the program, but, at the same, time expect certain business outcomes out of it. Organize these different stakeholders and use measurable business outcomes to define the rewards you expect to recap from the VoC initiative.
Clearly define a starting point from which to implement the VoC program
After selecting the business metrics and before, actually, implementing the VoC program assess how your organization is currently performing in regards to the metrics established by the various stakeholders. This will serve as a comparison measure in the future. You cannot assess how the VoC program performs unless you have something to compare that performance against.
Start collecting VoC feedback and act on it
There are three types of VoC feedback: direct, indirect and inferred. At this point, you need to consider how the collection and analysis of this data will affect existing operational processes. You need to be aware that certain VoC metrics have an impact on certain operational processes. Let’s say you send out an NPS survey to your customers after an interaction with a customer support agent is complete. A low NPS score from a customer will result to a customer call-back. Therefore, the VoC metric impacted the operational process of customer support. Your job is to define all the instances within the operational process that can be impacted by the VoC program. Later, you can decide how to improve the business process according to the feedback. This ensures that every department in the company will aligns its goals with the improvements that need to take place.
Convert the necessary improvements into monetary value
Once a VoC metric has pinpointed an improvement that needs to happen in the operational process your financial department needs to take over. The financial department is tasked with mathematically tying the VoC insights with accounting metrics to determine monetary value. When completing this step, you will have a clear idea of the costs and the benefits of the VoC program. If the costs exceed the benefits, the VoC is not viable. If the benefits exceed or are equal to the costs then the VoC is a viable initiative for your organization.