How To Succeed with a Voice of the Customer Program
Voice of the Customer (VoC) programs have become a strategic asset for the most forward thinking and customer-centric CEOs, CMOs and customer experience leaders. In fact, in the most recent Best Practices of the Best Marketers Research Report, Chief Marketing Officers whose performance ranked them in the top quartile used VoC programs a whopping 48% more often than their lower performing peers.
It’s been my experience that most companies think they know what their customers’ want—and more often than not they are either partially correct or incomplete. Either scenario results with a cascading effect that degrades product R&D, marketing communications, sales effectiveness, services delivery and customer experience (CX) objectives. The negative financial impact incurred in any one of these areas is a significant hidden loss than goes unrecognized by most business leaders.
A Recommended Approach
If you don’t already have a VoC program, here’s a 10 step approach and some best practices to get you going.
- Assess Culture. Despite the marketing rhetoric and self-proclamations of being customer focused, most companies are product-centric, not customer-centric. Calling yourself customer-centric doesn’t make it so. Recognize that to achieve sustained VoC success, the company must be customer-centric or be on a journey to become customer-centric. If your company isn’t yet there, defer any VoC program, consider why and how to adopt a Customer Experience (CX) strategy, and revert to some simple survey analysis tools in the interim.
- Assign Champion. Like all IT and strategic business initiatives, executive sponsorship is a pre-requisite. Additionally, a designated resource must be tasked to design the VoC methods, data schema and business processes as well as held accountable to author, gather and act upon customer feedback. Because data resides in multiple systems, a business analyst with cross-departmental relationships may be an ideal resource.
- Set Objectives. For most organizations, VoC will seek to capture, categorize and prioritize customer expectations and preferences (by customer segment, more on that later) so that the organization can orchestrate the right mix of culture, people, processes and technology in a coordinated effort to consistently delight their customers. In addition to prioritizing customer preferences, I’ve found it very helpful to organize preferences in a hierarchy with related preferences linked together. This will facilitate your business processes in a way that achieving one customer preference will add value or jump start related objectives.
- Design Processes. VoC can be done manually or with technology, using inbound or outbound methods. Manual methods often include customer interviews, focus groups, reference programs or various contextual design techniques (i.e. user centered design ethnographic research). However, while these methods deliver good qualitative analysis, they don’t scale well. You’ll need to leverage technology to achieve VoC automation in a way that continuously gathers customer feedback and dynamically stages that feedback so it can be easily analyzed and acted upon.
- Segment Customers. Customers are not homogeneous and therefore VoC programs must be based on tightly defined customer segmentation. B2B organizations will want to segment customers by objectives and personas using both explicit (i.e. demographics) and implicit (i.e. transactions, behaviors and activities) criterion. B2C customers will want to further include key performance indicators such as RFM (Recency Frequency Monetary), loyalty program attributes and a heavy dose of social media behaviors. Also, a customer segmentation best practice is to create a category for lapsed customers. This group is quite often an organization’s single biggest customer segment and can offer some valuable advice; and if that advice is acted upon and followed with a reactivation strategy can also deliver some big revenues.
- Data Governance. You need to leverage as much customer data as possible to truly understand the VoC. Most companies manage customer data in many applications such ERP, CRM, service management, billing, marketing, email apps, survey tools, Excel , shadow systems and more. More often than not these disparate data siloes need to be bridged to consolidate and make sense of the customer relationships. This is a particularly tough challenge for enterprise customers who manage a plethora of systems. Master Data Management (MDM) is a popular data governance approach for managing multiple views of the customer by consolidating, standardizing, persisting and distributing customer data throughout the company so that it is accurate, complete and consistent. Don’t begin a VoC program before you have considered the data complexities and teamed with your IT department.
- VoC Tools. Voice of the Customer software tools are commonly called VOC Hubs and are often differentiated by their preference for inbound or outbound methods, ability to capture data by themselves or through third party systems, and MDM or MDM-integration capabilities. VoC applications use many techniques such as email or online surveys, web self-service, website analytics, chat, Quality Monitoring, EFM (Enterprise Feedback Management), text mining, speech analytics, case management insights and NLP (Natural Language Processing) Knowledge Management. Some of the popular VoC software vendors include Allegiance, Attensity, Autonomy (HP), Clarabridge, Confirmit, CustVox, CustomerVoice (Oracle), ForeSee, iPerceptions, iSKY, Microsoft Dynamics CRM, NetReflector, Nexidia, Nice Systems, OpinionLab, Qualtrics, QuestBack, ResponseTek, Satmetrix, SynGro, UserVoice, and Verint Systems.
- CRM Integration. A CRM best practice is to make sure your Voice of the Customer software integrates with your customer system of record, which is normally your CRM system. When VoC questionnaires can be sent from and returned to the CRM system (without export/import or manual integration), the process can be automated and the surveys or correspondence can be personalized with customer data (i.e. products purchased, prior VoC feedback, etc.) More relevant surveys improve response rates and make the feedback more actionable. CRM software can generally also tabulate VoC data from multiple data sources, append customer feedback directly to the Contact record, update the account’s activity feed (i.e., Salesforce.com Slack or Chatter or Microsoft Teams or Yammer), distribute alert notifications if customer problems or exceptions are identified, create and assign tasks for follow-up, roll the data up into KPIs and reports, and reveal patterns and correlations among customer feedback and company attributes (products, people, departments, locations, day of the week, etc.)
- Engage Customers. Now comes the time to listen to customers. Whatever engagement technique you use, a key success factor is to probe using open ended questions designed to understand the customer’s vision, objectives, partnership preferences, frustrations and measures of success. Also consider all customer touch points (call center recordings, email correspondence, social media comments, marketing responses, sales win/loss analysis, new customer on-boarding, user group interactions) and how they can contribute to a holistic view.
- Measure Results. You will need to show payback in order to make your Voice of the Customer program sustainable. While many organizations use customer satisfaction metrics such as NPS, CSAT or customer loyalty, I highly recommend performance metrics which show revenues and demonstrate clear ROI — such as customer up-sell/cross-sell, customer retention and Customer Lifetime Value (CLV). Be sure to time stamp your key metrics so that you can determine baseline and show trending. As you might imagine, customers evolve, customer preferences change and VoC is a journey.
One Big Caution
Customers like to be heard, and many will engage in your VoC programs. However, consuming their time and then failing to act on their input will infuriate them. According to Gartner, while 95% of companies surveyed collect customer feedback, fewer than half of those bother to alert staff, much less inform their customers as to how their feedback was used.
In fact, only 5% of the companies surveyed close the loop by letting participants know what was done based on their feedback. 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.
VoC benefits include faster customer resolutions (with fewer hops and escalations) and improvements in customer experience (CX) as evidenced with metrics such as Net Promoter Score (NPS) and customer loyalty. Financial benefits include increases in customer spend, customer share and customer retention.
Gaining an accurate, complete and continuous Voice of the Customer is clearly one of those assets that separate strategic customer strategies from tactical and will dramatically influence the organization’s ability to achieve its most important objectives.
When you really know what your customers want, you can design achievable business strategy, solve for the customer, craft messaging and offer solutions that truly resonate with customers and thereby provide a significant uplift in marketing effectiveness, sales conversions, satisfied customers and ultimately Customer Lifetime Value.