What is Voice of the Customer?

Voice of the Customer (VoC) is the process of gathering vital information regarding what customers think and feel about their experiences with a business.

Listening to the Voice of the Customer (VoC)

For a business, one of the most important ways to stay competitive is to understand the relationship the customer or client base really has with the overall business, the product or service provided, what it really thinks and how it feels about it. Equipped with such valuable insight, leadership teams can then steer their organization towards creating more loyalty and more value for their customers. Back in 2014, Gartner predicted that by 2016, 89% of companies would be competing mostly on the basis of customer experience and 50% of consumer product investments would be directed to customer experience innovations. In their CMO Spend Survey 2016-2017, Gartner identifies customer experience as the top area of innovation being pursued by marketing leaders.

VoC Definition

Voice of the Customer” (or VoC as it is often abbreviated) is the process of gathering vital information regarding what customers think and feel about their experiences with a business. The goal is to learn about their expectations regarding the business’ products or services. Voice of the Customer is a process made possible by modern technology that enables customers’ experiences to be captured and then shared within the organization. Armed with this priceless knowledge, companies can build more effective brands, more efficient organizations and develop better products or services.

Why Voice of the Customer Is Important

Essentially, once fortified with this extensive and comprehensive data, managers can:

  • Discover why feedback scores are not up to par.
  • Comprehend customer desires, needs, and criticisms.
  • List the above data in order of importance for improving performance.
  • Fully grasp customers’ perception of the value a company’s product(s) and/or service(s) offer.
  • Learn if and where the company is fulfilling its promises and areas where it fails to do so.
  • Utilize all the data to inform improvements in the way products and services are created and offered to a now better understood customer demographic.

Benefits of Voice of the Customer

Once upon a time, businesses would ascertain customers’ wants by observing what was being bought and, conversely, what was selling less successfully. Knowing what is popular with the buying public is of course a pathway to gaining understanding of what works, but this is not a surgically sharp instrument for feedback, nor a timely one. It won’t reveal, for instance, what areas are specifically in need of improvement or how happy customers really are with the company’s product or service. Truly listening to the customer and fully comprehending their entire experience provides a company’s management team with significantly more assistance and guidance.

The raison d’être of VoC comes down to three points: improving customer retention, improving the customer experience, and boosting revenue.

Improving Customer Retention

Brand reputation plays a significant role in customer loyalty, so it is important for companies to keep their reputation in good standing. Part of that process is opening a direct line of communication for customers to address their concerns and frustrations so that the company can then act on those frustrations to improve the overall experience.

When customers are satisfied with the purchasing process, they are more likely to turn to the company in the future when they need similar products or services. Voice of the customer strategies allow companies to understand what existing customers like and dislike so that they can emphasize the positives and fix problems as they arise.

Improving Customer Experience 

One of the main focuses of a voice of the customer program is to raise the overall quality of the customer experience, from the point when potential customers learn of a company until they make a purchase. VoC should provide insight into the wants and expectations of clients so that companies can make changes to better address those needs.

The customer experience encapsulates more than just the products and services that a company offers—it also includes things like customer assistance. Companies should consider each of these aspects when making changes to improve customer satisfaction.

Boosting Revenue

A natural consequence of expanding the customer base and retaining customers is an increase in revenue. As companies monitor customer feedback and trends, they have a clear picture of what products and services customers want and are willing to pay for, which means that the company can provide those with greater accuracy.

WORKSHEET

Discover Your Customer Experience

 A Guided Exercise to Help You Understand the Current State of CX at Your Organization

So, you’ve been charged with leading a company-wide CX initiative. But where do you even start? Likely, customer experience efforts are already being made in different pockets of your organization, but it’s up to you to break down the silos and connect the dots. This worksheet will guide you through an exercise to do just that!

Download Worksheet

3 Questions to Consider Before Building a VoC Program

These three questions can guide companies’ efforts to implement an effective VoC program to improve the customer experience, retain customers, and boost revenue.

What Is the Goal of the VoC Program?

Without a clear goal, it is difficult to start a VoC program since the strategies used should reflect the business objective. Before companies start building a program, they should first examine potential objectives and determine which will be the most beneficial for their specific needs.

The objectives of a voice of the customer program can be divided into two main categories: benchmarking and continuous improvement.

Programs that focus on benchmarking as an objective tend to be more comparative. This means that the surveys used to gather customer feedback will use the same set of questions for every respondent, typically in a rating format, and then compare those ratings to each other to find areas for improvement. Often, the focus is on the scores themselves instead of the reason for those ratings, so companies that use this objective will get more general feedback and causality.

Continuous improvement objectives, on the other hand, can be more personalized based on certain aspects of the customer and their interaction with the company. While the accompanying surveys can include rating questions, there will also be some open-ended questions that allow respondents to clarify their reasons for the scores they gave. This method can give more detailed insight into the causes of dissatisfaction.

Companies should choose one of these objectives based on the information that they wish to gather in order to work towards certain goals. Some of the possible goals are:

  • Customer research: For this, companies gather the information that helps them better understand the needs and wants of their target customers.
  • Customer retention: Learning how to best keep existing customers satisfied with the products and services offered is crucial for customer retention.
  • Acquiring new customers: Just as important as retaining customers is acquiring new ones. With this goal in mind, companies should learn how to increase interest in their brand to attract new customers.
  • Improving brand image: This goal focuses on finding out how customers view a company’s brand and what can be done to improve that image.
  • Cost reduction: Focusing on cost effectiveness by recognizing where you can reduce spending will help you increase profitability and prove ROI. 
  • Increasing customer lifetime value: Customer lifetime value is the revenue earned from a single customer over time. Increasing that will cause your customers to promote your brand for you. 

What Metrics Should Be Measured Throughout the VoC Program?

Once a company has chosen a goal to drive its VoC program, it should define which metrics will be measured to demonstrate progress and focus the efforts for more improvements. Some common metrics in a VoC program include Net Promoter Score, Customer Effort Score, and Customer Satisfaction Score.

  • Net Promoter Score can provide insight into the customer experience by measuring customer loyalty. To find this score, companies often send clients a single-question survey that asks them to rate how likely they are to recommend the company, the product they purchased, or the service they used to their family and friends.
  • The Customer Effort Score can also be found with a single-question survey, but the question typically asks about how easy or difficult it was for the customer to interact with the company in a specific way. This could mean how easy it was to contact customer assistance with a question or how difficult it was to get an issue resolved.
  • A Customer Satisfaction Score is usually a bit broader than the other metrics and asks customers about their overall satisfaction with the products or services that they received from the company.

How Should the Success of the VoC Program Be Measured?

A VoC program is really only effective if it drives action. In order to determine whether the feedback being gathered is useful, it is important to look at what has changed since the program was implemented. Measuring success is dependent on setting a clear goal and choosing specific metrics that align with that goal. Because of this, companies should consider whether the metrics being measured are improving over time. The changes made to improve the metrics should be helping the company work towards its main objective.

Creating an Effective Voice of the Customer Program

The path to a fully functioning voice of the customer program requires the right company culture, internal champions and cross-functional collaboration. 

At the more tactical level, the following are some vital areas to consider when creating a VoC program:

Identification of Customer “Listening Posts”

As noted in McKinsey “From touchpoints to journeys: Seeing the world as customers do,” customers form their impression of a product or service through multiple interactions with an organization. For instance, folks may find a business by doing an online search or via an ad. They might be introduced through blogs or site reviews, then shop on the company’s website, stop by at a brick and mortar retail location, and later on, get in touch with the customer service department. A VoC program starts with mapping out the customer journey and identifying the various touch points that will add up to the full customer experience with the company.

Companies must consider which CX metric is the best to track — what question to ask — at each journey point. Net Promoter Score (NPS), Customer Satisfaction (CSAT), and Customer Effort Score (CES) may all have their place depending on context and what a company is trying to learn.

Customer Feedback Collection

The second step is to gather feedback at these “listening posts”. Badly designed, a VoC program can easily create friction, with long and intrusive surveys, and demand effort on the customer’s part, going against its very purpose of improving the customer experience. Choosing a lightweight survey format relevant to the customer interaction at hand is foundational to the design of effective VoC programs.

Customer Data Analysis

Successful VoC programs go one step further than the collection of feedback and customer experience metrics at customer touch points. They derive actionable insights from the wealth of feedback and information gleaned. AI-powered text analytics software are powerful tools available to organizations to help scan millions of open feedback entries in real time and reveal recurring themes in areas for improvement.

Patience and Commitment

Building a world-class customer culture is not a venture that happens overnight. It is also not something that external third party companies can completely run. The best examples of customer-centric organizations have been built over a number of years. Customer culture is something that is very slowly altered, practices have to be refined, analysis complexity is increased, and action becomes widespread. Throughout this journey, leadership must be consistent, patient and committed.

Taking Action

The most effective VoC programs will put the company’s leadership and company staff in the best position to act upon all the collected, up-to-date insight. Being informed about all the problem areas allows individuals in a company to take the lead in correcting them.

Monitoring of Customer Experience Trends

Ongoing monitoring assists in tracking a company’s progress as time goes on. Companies can get stuck debating what absolute NPS, CSAT or CES score they should target. What is more important is to stick to a metric, build a system that lets feedback flow in effortlessly, and watch the metric improve over time, as employees act on this valuable feedback.

Techniques for Collecting VoC Data

There are many different techniques and voice of customer strategies for collecting data. However, the techniques that a company uses should be based on its goals and the metrics being measured, so each company should adapt the templates to meet its needs. Each of these methods has benefits and drawbacks, which is why a company may choose to use a combination of the techniques instead of a singular method of collecting data.

Customer Interview

The traditional technique of gathering data through a customer interview has stuck around for so long because it is a direct way of gathering feedback. Interviews can be done in person, over the phone, or through email depending on the preferences and needs of a company. This technique allows companies to better understand the point of view that a customer or group of customers shares in their interaction with the company.

Online, Email, or SMS Customer Surveys

Surveys can include different types of questions in order to gather meaningful insights into issues that customers face. Some of the different types of survey questions include multiple-choice questions, drop-down questions, and open-ended questions. The key is to ask the right questions at the right time to gain a better understanding of customers and their expectations at any given point in the customer journey.

Live Chat

A live chat feature on the website is becoming increasingly popular due to the ability to collect real-time customer feedback. Live chats can gather more than customer complaints—they can also provide companies with the opportunity to schedule a follow-up survey to learn about the customer experience on the site. Another great feature is the ability for companies to respond quickly to an issue, which reduces the risk of customers leaving the site feeling unsatisfied with the services or products.

Social Media and Online Reviews

Another way for companies to interact with customers in real-time is through social media. Companies can engage in two-way communication with their client base to learn more about what customers are looking for, predict future trends, and gather feedback directly from the source. A large part of retaining customers is a positive brand reputation, and responding to online reviews can demonstrate that a company is aware of how customers view their products or services. This also allows companies to learn more about frustrations that customers face so that they can implement measures to resolve the issue.

Website Behavior

Along with these other techniques for collecting data, a company can analyze the behavior of customers on their website by using tools like heat maps. The company can track these behavior patterns and test potential changes to see what works and what doesn’t, all to create a smoother user experience.

Sample Questions to Ask in a VoC Program

The questions that a company asks as part of its VoC program will depend on the goal set at the beginning. For example, if the goal is general customer research, the company will want to ask questions that tell about the demographics of their audience, like: 

  • Which of the following categories best describes your age?
  • Which of the following genders do you most identify with?
  • What is the highest level of education you have achieved?
  • How many people work at your company or organization?

On the other hand, the company should ask questions about its products and how they compare to competitors if the goal is to increase customer retention. For example:

  • How does [company, brand, product, or service] compare to the competition?
  • What do you like best about [company, brand, product, or service]?
  • What do you want to be improved about [company, brand, product, or service]?

If the goal is to acquire new customers, companies can ask about how the audience makes decisions. A potential question is:

  • What factor(s) matter most to you when selecting a company for [product or service]?

Finally, companies should ask about their brand if the goal is to improve their brand image. These questions could ask things like: 

  • What word or phrase comes to mind when you see or hear [company, brand, product, or service]?
  • What company comes to mind first when you think of [company, brand, product, or service]?
  • Where have you seen or heard information about [company or brand] in the past six months?

In summary, voice of the customer enables companies to gain visibility into the customer journey and, just as importantly, to act upon this feedback. This leads the company on a path to continuous improvement and, ultimately, has a positive impact on the bottom line.

Learn more about how voice of the customer, can help you build a better brand with InMoment today.

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