Voice of the Customer: Methods and how to apply them

Written by

Daniel Hannig

One of the most valuable gifts you can give another human being is listening. To listen is to give a person your absolute and complete attention in order to understand them. Listening allows you to put yourself in the other person’s shoes.

Coach Chris Lee says that not only does listening makes all the difference in how connected someone feels to you, but it allows you to understand what’s going on with them.

It has become clear that nowadays, companies listen to their customers more than ever (some even more than others). However, there are a few that do so in a systematic way and consequently act regularly to transform their products and services. And that’s exactly why it is so important to have an effective Voice of the Customer program.

Voice of the Customer or VoC is a process that describes your customer’s feedback about their experiences with and expectations of your products or services.

The American research and advisory company Gartner said that Voice of the Customer programs will be one of the most important strategic investments in the next five years for companies, as there will be more than a 30% annual growth.

“VoC is being seen as a strategy that a company must have,” said Jim Davies, Gartner’s director of research. However, Gartner also warned that VoC is still a market that needs to develop several aspects. So, what do we have to understand if we talk about Voice of the Customer?

The first step when creating a successful VoC is to listen to your customers. Currently, clients sharing a good or bad experience has become extremely easy and common. They can share immediate feedback directly from their smartphones and not only with the people they know, but also with others by sharing it on social networks and other media outlets. And all of this influences users when it comes to making a purchase.

By listening, you’ll be able to gather your customer’s information effectively and can decide what you need to ask, and then, you’ll start to think about how to design survey plans, customer interviews, on-site observations or focus groups that nurture the data you already have internally and add more key information. Remember to never ask anything you can know by listening. You don’t have to ask many questions, if you take the time to listen.

One should take into consideration that companies want to generate and create good experiences with their customers through the various communication channels, since the satisfaction of it is entirely tied to the sales of the company.

According to Fuel Cycle, VoC programs continue to grow in popularity. And for a good reason! Companies with best-in-class VoC programs:

Enjoy 55% higher customer retention cost.
Have an average decrease of 23% in year-over-year customer service rates.
Show 292% greater employee engagement cost.

Keep on reading to find out ways on how to improve, enhance and/or beautify your current Voice of the Customer program!

1. Getting Started: Collecting Information

The VoC allows the company to:

Know if your customers are satisfied or not.
Know if they receive quick resolutions to their problems and doubts.
Detect the trends of your consumers.

And all of this will help you find out how your customers value and use your products compared to those of the competition and to better meet their needs.

Implementing a good VoC program will not only help improve the company’s relationship with its customers, but also its bottom line.

This is because the information and feedback collected from customers serves to channel actions focused on increasing loyalty to the brand. This influences the value of the customer’s life cycle and the company’s income statement.

And more specifically, it is necessary to implement a VoC program because:

It helps improve the level of customer satisfaction.
It allows to know the relationship of customers with the brand.
It allows to know the strengths and weaknesses of the company from the perspective of the client.
Assistance to innovation and improvement of services, thanks to the contributions and suggestions of customers.
Facilitates the resolution of doubts and problems efficiently.

2. Creating Your VoC

How to create a Voice of Customer program in the company?

First things first. When it comes to a business, listening to your customers should be the No. 1 priority of any customer experience strategy. This is the battlefield where you identify which companies will survive the next decade.

VoC has the power to drive innovation to a granular level, but this idea comes directly from the people most interested in what happens to change: customers.

The book “Outside in: The Power of Putting Customers at the Center of Your Business” describes the case of Sprint, a telecommunications company that focused on identifying the main causes of customer dissatisfaction and taking this information as the starting point to find and attack each problem’s root cause.

With this strategy, Sprint has been able to save costs by 1.7 trillion dollars annually, in reducing attention of claims and recoveries to affected clients. By early 2011, the improved customer satisfaction had already brought Sprint’s customer churn rate to its lowest level in company history.

Most companies place a greater emphasis on tools and systems; however, the greatest impact often comes from focusing on internal processes and culture, which projects final economic and financial results.

In fact, for mature organizations that already have strong management, VoC data can be an important competitive advantage. However, it is not the VoC program itself or the data contained therein, which offers the most power. What the organization decides to do with the information is what generates a true differentiation. There are more than enough tools and technologies to “close the circle” of customer information and this seems to deliver the expected results.

3. Communicate Customer Feedback

Are your employees aware of VoC strategies and receive feedback from customers they could use at their jobs? In order for the customer’s voice to maintain a high priority status in the organization, the client’s program must WIN the trust of the groups that serve the client of those who support them and the client’s. The most successful communication programs are planned so that the distribution of customer knowledge allows easy access to the right people, i.e, the right people have to receive the right information at the right time by allowing them to act more efficiently.

Client’s opinions and/or perceptions towards a product or service can be collected in two ways:

A. Reactive

The feedback of the product is initiated and executed by the customer (possibly) due to discontent or malfunction of the product or service.

Some sources are: • Buyer complaints (whether written or verbal) • Return of the product (equivalent to defective merchandise) • Technical and / or general assistance to respond to complaints or technical problems of the product

B. Proactive

In the effort to know and understand what the customer needs and expects, the supplier or main source of the service or product makes anticipated efforts to collect information prior to the development or creation of the product. In the best case the customer may be involved in the design, development and testing of such product or service.

Some options or methods to achieve this are: • Customer interviews • Surveys • Working tables with clients or consumers and other departments or persons involved in the service or product to understand and discuss customer needs and expectations.

4. Turn Customer Feedback into Action

Turning customer feedback into action is the No.1 challenge for those in charge of customer management. It needs to go beyond of simply collecting and disseminating information to guide business strategy and key initiatives. The optimal use of client programs involves acting at all levels – at the corporate, functional, business unit, geographic and account levels.

And here is where validation comes into play.

Validation has to do with demonstrating how customer initiatives provide an economic benefit to the company. The results of the VoC program should not be analyzed independently. Rather, they should connect with other businesses indicators and activities. When a validation mechanism has been put in place, executives will be willing to invest in client programs, knowing that the results have shown a positive impact on financial results.

VoC programs connect the opinions of your customers with those who make the decisions in your business and put the customer at the center of the entire organization. Right there you start to create a better version of your business, along with your customers.

What to avoid in your VoC process

According to the consulting firm Deloitte, these are the three steps you should avoid when creating your VoC:

To blame a certain department. Placing the customer in the center of the organization is not the responsibility of the marketing department or customer service, it’s something that impacts and implies all departments of the organization. While some department must lead the beginning of change, in the long run the development of multidisciplinary and multi-departmental teams are the key to success.
Set a deadline. The improvement of the customer experience is an endless road: even organizations considered as leaders in customer experience (Disney, Ritz-carlton, Apple, ..) do not cease their efforts to achieve improvements or perhaps precisely and because of that, they have become leaders of their sectors. It’s no surprise that all these organizations have a customer experience manager.
Not changing priorities. Involving management (not just support) is key if a company really wants to target the customer. Making the customer the center of the organization means setting new strategic priority: if the customer is not a priority, then it is not worth starting this way.

Over to you

All companies listen to their customers today, some more than others. However, there are few that do so in a systematic way and consequently act regularly to modify their products and services. And that’s exactly what it means to have a functioning Voice of the Customer program. VoC helps an organization identify what products and services should be offered to satisfy the customer, it identifies specifications and expectations of certain products and services and decides where the improvement effort should be focused.

Sounds like a lot of work. And it really is! Listening and knowing how and what to ask your customers can be an arduous task, especially when the volumes of information to organize are very significant. However, the reward has a huge value for your business. You can create a unique value offer, tailored to your customers’ expectations, needs and preferences. Just the kind of value offer that can place your business as a top leader!

Finally, you decide whether to listen or not.

What is your company doing with its customer feedback to enhance their experience and the company’s bottom line? Share your insights in the comments below!