Today, business success depends on the development of customer-centric experiences. To that end, Voice of the Customer data delivers insights on individual and segment motivations which can help you measure and manage the customer experience.
What is the Voice of the Customer?
The Voice of the Customer (VoC) refers to the collective insights, opinions, needs, expectations, and preferences expressed by customers about a product, service, or brand. It is a critical business concept, aiming to capture and understand the sentiments of customers to shape and improve business strategies and offerings
Many firms develop a Voice of the Customer (VoC) strategy with the intention to enhance the customer experience and propel business growth. VoC analytics is complimentary to customer journey analytics and can be used to evaluate the customer experience across touchpoints and over time.
A successful implementation of a VoC strategy helps support a set of activities which comprise a closed-loop feedback process.
More to the point, a Voice of the Customer strategy enables you to:
- Listen to your customers
- Analyze the resulting data
- Act upon it to improve the customer experience, and
- Monitor results
How can I capture the Voice of the Customer?
As the VoC has grown to become the backbone of the customer experience, it is important to have a clear idea of the different types of data you can gather when implementing a VoC strategy. There are three types of VoC data:
Direct feedback: This is the type of feedback your customers intend to provide your organization with. Direct VoC data refers to any touch-points in the customer journey whereby the customer expects the business to be listening. Direct feedback, typically, comes in the form of a survey, market research, written complaint, formal letter, a forum/panel, etc.
Indirect feedback: Feedback which refers to instances when the customer is speaking about or interacting with the organization but does not necessarily have the intention to give feedback to the business. This includes feedback extracted from social networking sites, review sites, or customer care interactions conducted in a variety of communication channels such as email, chat, phone, etc.
Inferred feedback: This is feedback derived from transactional, behavioral and operational data associated with the customer experience or the customer journey across different touchpoints. This type of feedback is extracted from historical data and is the hardest to capture. Examples of inferred data include website click-stream data, purchase history or contact center data.
Why you should I be familiar with different VoC feedback sources?
It is crucial to discern the three different sources of VoC data and where they come from in order to obtain a holistic perspective on the customer experience. VoC data can be used for a wide range of purposes but it all starts with a basic understanding of the business requirements of VoC analytics and a clear specification of the analytical outputs you set out to achieve. Once this initial step is complete, you can proceed with deciding which feedback sources are the most relevant to your business.
The general rule is to use more than one source to collect data. This way you will get feedback through a variety of diverse channels and compare the information to make sure you are getting consistent and accurate insighst. However, not all feedback sources are equally relevant. Depending on the industry some feedback sources might prove to be more valuable than others. Once you pinpoint the data sources which are most relevant to your business you can identify and establish appropriate channels through which you can gain access to that data.
What is a Voice of the Customer strategy?
A Voice of the Customer strategy is in essence a process which allows your company to capture customer data and feedback from different channels, analyze, and act upon it to improve the customer experience. One of the most challenging aspects of setting up a VoC strategy is to establish which metrics to track.
There are several VoC metrics you can track but, ultimately, you should set up those metrics that make the most sense for your company. The reason behind this is that VoC metrics help guide effective decision making towards business success. It is, also, important to remember that just because somebody else is using a specific metric you shouldn’t feel compelled to use it as well.
Where to start with Voice of the Customer metrics
At the early stages of establishing a VoC strategy it is crucial to identify the business challenges you are dealing with. This process will guide decision making regarding the metrics you need to track. Furthermore, it will ensure that the strategy supports your overall business objectives.
Another point to take under consideration before implementing any metrics is stakeholder engagement. A successful VoC program requires that all internal stakeholders are on board. To ensure stakeholder engagement you must align VoC objectives with their business/department objectives. Your main goal is to gain insights from VoC data that is of value to various internal stakeholders and can drive desired outcomes. This is an additional step to help you identify appropriate Voice of Customer metrics for your organization.
Finally, before diving into VoC metrics, it is essential that you link KPIs and loyalty metrics. You can go ahead and start collecting feedback only after you examine background data already in your database. You can later use this data to analyze customer segments alongside feedback. This will, also, give you a better understanding on which metrics you should start tracking.
The most important Voice of the Customer metrics
As mentioned earlier, customer feedback comes in three different forms. Along the customer journey you can capture direct, indirect, or inferred feedback. The goal is to collect data from more than one source and establish the most suitable metrics to track. Here is a list of the most well-established Voice of Customer metrics.
Net Promoter® Score
The Net Promoter® Score (NPS) measures whether a customer would personally recommend your product or service to a family member, friend, or colleague. The NPS is widely popular because it’s easy to understand and calculate. Additionally, you can benchmark your company’s score against the average industry NPS and see how you perform in comparison.
Customer Effort Score
The Customer Effort Score (CES) is calculated based on the premise that the less effort a customer asserts to get an issue resolved, the better. The CES is best suitable to call centers or customer support environments. The challenge with the CES is that it uses a different scale that other metrics. Thus, internal stakeholders find it difficult to understand and compare with other metrics.
Customer Satisfaction Score
Even though the customer satisfaction score is not considered the best indicator for future financial performance, the metric is still widely used in transactional surveys. Its purpose is to pinpoint how customers feel about a specific element of the overall experience you are measuring.
As the name suggests, this metric measures loyalty. You can calculate the index by taking an average across a number of questions that pertain to customer loyalty behavior. Combining the results from these questions generates an accurate loyalty index with more predictive power.
Drawing everything together
Setting up Voice of Customer metrics is clearly not enough to provide measurable Return on Investment (ROI). But, it is one of the first steps you need to take towards that end. Choosing the metrics and linking them to business goals and other KPIs and financial indicators will help you ascertain the ROI of your VoC strategy.
Customer experience practitioners often ask the following question: “How do you measure the monetary value of a Voice of Customer?”. 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 strategy 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 your VoC strategy generates business value to justify the ongoing investment.
How to build a Voice of the Customer strategy in 5 steps
Voice of the Customer strategies generate data that improve customer experience analytics and provide insights that steer business transforming decision-making. In order to yield positive results and cater to short and long term business goals, design your Voice of the Customer strategy based on company needs, available resources and desired outcomes that support a cycle of four activities that comprise a closed-loop feedback process: capturing customer feedback, gaining insights, reacting to improve the experience, and monitoring the results. So, how do you go about creating a successful VoC strategy?
1. List your company’s most promising feedback sources
Customer feedback comes in three forms: direct, indirect, or inferred. The first thing you need to do is make a list of established feedback sources that fall into those categories. Later, expand the list by adding sources of feedback that you are not currently utilizing but would provide you with valuable customer insights.
2. Rank feedback sources based of volume and value
At this point you should start rating the feedback sources you have collected in step one. Be systematic in doing so. Determine beforehand the business goals you try to achieve and proceed with rating the feedback sources depending on whether they help you reach these goals. Keep an eye out for feedback volume and value per source/channel.
3. Pinpoint the most appropriate feedback sources for your company
After you have a clear understanding of the available feedback sources, you should determine which of these sources are most relevant to your business. Unless you have unlimited resources, you are not going to be able to track every single feedback source known to man. Figure out which ones are most useful to your business and the people that make decisions for it.
Step 4. Start with the highest-ranking feedback source
During this fourth step, you need to start optimizing. You should now know which sources to track. Therefore, you need to enter in execution mode. If your highest-ranking sources are already established within your company you need to make sure they are optimized. If your highest-ranking sources are not established, you should put in place processes that allow for feedback to be collected through those sources and find its way back to you.
Step 5. Visualize VoC data
This final step is the fruition of your VoC strategy. You now have VoC data rolling in. It is your job to make it count. You should make sure you translate the data into a language that everybody understands and make it accessible to the right people. AI-driven tools and are your best chance to help you with this as they display data in a condensed and simple form.
To ensure the continuity and success of a Voice of the Customer strategy you need to frequently revisit these steps. Your VoC strategy should reflect the challenges and opportunities your business is faced with. Therefore, it needs to develop and grow alongside your organization. Working your way through these steps, whenever necessary, will enable you to turn VoC insights into a competitive advantage that shapes the customer experience.
How to measure the ROI of a VoC strategy
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 strategt 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 strategy
Within your organization there are different stakeholder groups involved with your VoC strategy. These groups are tasked with key responsibilities in terms of implementing the strategy, 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 Voice of the Customer.
Clearly define a starting point from which to implement the VoC strategy
After selecting the business metrics and before, actually, implementing the VoC strategy assess how your organization is currently performing in regards to the metrics established. This will serve as a comparison measure in the future. You cannot assess how your VoC strategy performs unless you have something to compare that performance against.
Start collecting VoC feedback and act on it
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 they’ve had an interaction with a customer support agent. 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 strategy. 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 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 strategy. If the costs exceed the benefits, the strategy is not viable – you have to rethink it. If the benefits exceed or are equal to the costs then the VoC is a viable initiative for your organization.
Who owns the Voice of the Customer?
Your ability to understand how to meet customer expectations has a significant impact on business strategy and overall success. A voice of the customer strategy provides you with insights that help deliver a superior customer experience. So, who owns the Voice of Customer? Think of the customer experience as a car. Voice of the Customer data is the fuel that allows the car to move. If you own the car, you sure own the gasoline in its tank. Therefore, whoever owns the customer experience owns the Voice of Customer. The million dollar question, therefore, is:
”Who owns the customer experience”?
A very common misconception is that the marketing department owns the customer experience. Another view is that the sales department owns the customer experience. But, maybe instead of asking who owns the customer experience you should ask whether your company is actually prioritizing the customer experience. And, that is a leadership responsibility.
Even though, successful voice of customer strategies require an all hands on deck approach, the executive level is responsible for encrusting the customer experience into the company’s DNA. After that, the successful implementation of a voice of the customer strategy is a matter of execution.
Capturing the voice of the customer is a process that requires cross-company integration of insights. The customer-centric organization demands interconnected metrics, processes and people. In this context, everything starts at the top and company leaders must ensure that voice of customer is measured in relation to revenue and other organization-wide customer experience metrics to determine ROI.
What is everybody else’s role?
The Voice of the Customer has the power to transform the customer experience. Every company representative has a role in making a difference based on whatever insights the VoC findings reveal. As a result, you need to make sure that the entire team is engaged and committed. This way you can expect action and accountability from everyone. Make sure that your people share in a common vision and adopt behaviors that guarantee the impeccable execution of the improved customer experience.