Voice of the Customer Tools, Methods & Payback
Highlights
- You cannot accurately predict what it takes to satisfy customers. But you can ask them what they want. That's why Voice of the Customer tools and programs are a requirement to efficiently meet customer expectations.
- Feedback is a gift. Knowing what customers like or don't like about your company or products is an invaluable source information for innovation, customer acquisition programs, customer growth campaigns and support services.
- Knowing exactly what customers want drives precision marketing programs and avoids investing in things that don't matter.
Voice of the Customer Tools, Methods and Payback
According to a customer study by Bain and Company, 80 percent of companies say they are customer-centric. But only 8 percent of customers agree. Clearly, there is a gap.
It's been my experience that most company executives think they know what their customers' want. And more often than not they are either partially correct or incomplete. Either scenario results in a cascading effect that degrades product R&D, marketing conversions, sales effectiveness, services delivery and customer experiences. The negative impact incurred in any of these areas is a significant financial loss than generally goes unrecognized by most business leaders.
To know customers want requires a continuous stream of customer data. That's best done with a Voice-of-the-Customer (VoC) program.
A VoC program captures, categorizes and prioritizes customer goals, expectations, preferences and dislikes. This data becomes some of your most valuable customer intelligence when integrated with the CRM software 360-degree customer view. That's when these customer insights can be applied to any customer interaction for an improved outcome.
Only with VOC can you discover what is most important to your customers and design the marketing campaigns, sales processes and differentiated customer experiences that achieve improved results.
VoC Methods
A VoC program must transform data into insights to be applied at customer interactions for predicted results. But it all starts by capturing the right data, and how the data is sourced varies by industry.
B2B purchase decisions are considered purchases. They incur a conscience decision-making process, occur over a lengthy period, involve multiple people or buying committees and generally result in high value expenditures. The most used methods to acquire B2B VoC data are market research, interviews and surveys.
B2C buying decisions are fast, frequent, impulse purchases. They are generally made with a minimum conscience decision-making process. Consumers typically cannot tell you why they made a purchase because much or all the decision was made from emotional or unconscious behavior.
Consumers typically discover, rather than know, what new products they want. B2C VoC data is sourced from a mix of qualitative and quantitative methods that include personas, journey mapping, empathy interviews, ethnographic research, social media harvesting, design thinking workshops and surveys.
A word of caution. Customers like to be heard, and many will engage in your VoC programs. But consuming their time and then failing to act on their input will infuriate them. According to Gartner, while 95% of companies collect customer feedback, fewer than half of those bother to alert staff of the results, 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 letting participants know what was done based on their input. If you don't have time or resourcing to review and act upon the customers' feedback, don't ask for it. There's nothing worse than asking for input and then ignoring it.
Voice of the Customer Tools
There is no shortage of voice of the customer tools to help acquire, analyze and apply customer data. Based on our experience in working with clients we have categorized many of the more popular tools in the below grid.
See the voice of the customer tools, and their effectiveness rankings, to acquire, analyze and apply customer data.
Click to Tweet/XFrom Insights to Actions
Voice of the Customer tools and programs acquire customer data and identify customer likes, dislikes, needs, wants and expectations for a company's products or services. But just capturing customer data doesn't do much. This firsthand data is invaluable only when it is used to improve the strategies and tactics to acquire, grow and retain customers. Here are some of the ways the data matures into actionable programs.
Marketers use customer data to create the buyer insights that deliver more personalized and relevant messaging to increase campaign conversions and acquire higher quality leads. Customer data is the single best source to create better-targeted campaigns with more focused value propositions that resonate with customers.
Salespeople use customer data to measure fit with the Ideal Customer Profile, qualify new leads, score opportunities and deliver the right message at each step of the sales cycle. For existing customers, salespeople will use customer data to improve intelligent cross-sell, up-sell or renewal recommendations.
Customer service reps will use this data to improve customer satisfaction, deliver differentiated customer experiences and identify customers at-risk of churn.
Product management or R&D will use this data to build products that achieve more enthusiastic adoption and greater utilization. They know the best source for innovation is customer feedback from the people who will actually buy and use their products.
Company strategists use this data to identify white space, new revenue streams and industry disruption opportunities.
Automating the VOC Process
Marketers that want to systemically improve engagement and increase conversions must step up customer data acquisition from an occasional activity to an automated and recurring process. They must then transform the data into customer insights and deliver those insights to the people that can leverage them for specific use cases or objectives.
The below customer data transformation pipeline is an example of an automated and closed loop process to make this happen.
CRM is the most used application to achieve many voice of the customer best practices. For example, the sourced VoC data can be fed to the CRM system and appended to the lead, account, contact or case records. The data can then contribute to the 360-degree customer view, update customer segments and build upon the customer insights that better personalize communication, offers and other interactions.
The Payback
No business development program is sustainable unless it can deliver a profit. Fortunately, VoC programs harvest data in ways that directly contribute to increased customer spend, customer share and customer retention. Some of those ways include improved campaign conversions, sales win rates and detection of customers at-risk.
An Aberdeen report titled The Business Value of Building a Best-in-Class VoC Program analyzed VoC programs and highlighted two results. First, they found that simply implementing a VoC program and capturing data without a clear intent for that data resulted in a short-lived unsuccessful program.
However, they also found that the top 20 percent of respondents applied the data to sales and marketing programs and enjoyed an almost 10-times greater year-over-year revenue growth compared to all others. The report also shared that companies with mature VoC programs:
- Achieved 55 percent higher customer retention rates
- Incurred 292 percent higher employee engagement rates
- Realized a 23 percent decrease in yearly customer service expenses
Perhaps the payoff is best described by Kai Yang, author of Voice of the Customer: Capture and Analysis, who shared, "If you had some magic power and were able to discover exactly what customers are craving, and if you also knew how to produce their dream product at a low price, then you would be guaranteed to get rich! Therefore, capturing the exact VoC is like striking gold."