What is Voice of the Customer (VoC)?

Ask any CX, research, or marketing executive, and they will tell you that gone are the days when the customer marketing landscape was represented by a one-way dialogue for engaging prospects. Today, market leaders are shifting their listening and response mechanisms faster as VoC programs represent a huge opportunity for driving loyalty and increased sales.

Poor customer experiences result in an estimated $83 Billion loss by U.S. enterprises each year because of defections and abandoned purchases, and people are twice as likely to talk about a negative experience than they are a positive one.

Definition of Voice of the Customer

The Voice of the Customer (VoC) is the capture of what customers are saying about a business, product, or service.

Voice of the Customer (VoC) is a term that describes your customer’s feedback about their experiences with and expectations for your products or services. It focuses on customer needs.

By listening to the Voice of the Customer, businesses can better understand and meet customer needs, expectations – and improve the product and service they offer. A Voice of the Customer program gives insight into customer preferences, problems, and complaints. These VoC programs identify and respond to the Voice of the Customer to improve customer satisfaction and loyalty.

Businesses capture the Voice of the Customer to use the data to improve how a customer experiences all interactions with the business. VoC is best understood using technology that includes text analytics and sentiment analysis because this ensures you can find meaning in the customer feedback data.

VoC programs have gained traction over the years and are fast-growing segments of a core business strategy for organizations. They work exceptionally well for brands as customers demand more direct engagement with a firm and because capturing and acting on customer feedback is critical to understanding a prospect’s complex decision-making process.

The benefits of a Voice of the Customer program

Businesses capture the Voice of the Customer to use the data to improve how a customer experiences all interactions with the business. VoC is best understood using technology that includes text analytics and sentiment analysis because this ensures you can find meaning in the customer feedback data.

By listening to the Voice of the Customer, businesses can understand and then meet their customers’ needs. A Voice of the Customer program gives insight into customer preferences, problems, and complaints, putting businesses in a better position to identify problems and opportunities so they can take the appropriate next steps. Done right, it’s an effective way to improve customer satisfaction and loyalty.

How companies are changing the business landscape with VoC

Customer perceived quality and above-average customer service have been proven time and again to be leading drivers of business success. When your customers share their voice in real-time with your organisation, they expect you to listen, act and report back to them on progress.

To win the war on customer loyalty you must have a single line of sight into your customer, market, and employee groups.

1-800 Contacts

1-800 Contacts was on a mission to figure out how to provide an exceptional customer experience in the digital world. Since 80 percent of their business is online, they used surveys to ask their customers individually what would make their experiences better. One customer jokingly asked to send him a candy bar and they did. Since then, they’ve been giving other gifts to their customers to make their day. Not only did they grow NPS 13 points in three months and increase their reorder rate by 3.8 percent, they created lifelong customers and fans that even market the brand for them.

Zappos

Zappos is known for having exceptional customer service and they measure it by asking how the interaction with the employee made the customer feel. Zappos wants to know how the brand and customer experience emotionally resonates with customers.

Additionally, the company empowers their customer service representatives. Zappos employees are allowed to give “wow gifts” to customers. For instance, when one customer called to return shoes after her mother had fallen ill, the employee on the phone sent her flowers. The woman was shocked that Zappos actually cared about her personal life. That’s how they build lifelong customers.

Building a successful Voice of Customer program

Before you jump in and begin building a step-by-step plan for achieving customer experience maturity, you’ll want to set the stage. Too often people rush into building a program without aligning all the necessary factors to move forward with creating a customer-centric organisation.

By focusing on the following six factors, you can successfully establish organisation-wide customer centricity.

Strong leadership

Establishing a customer-centric culture starts at the very top. Without executive-level buy-in there is a low probability of creating maximum impact for any customer-centric initiative. You’ll also want to garner the support of lower level leaders to truly move the needle on improving the customer experience. Leaders set the tone for their teams, so if a leader decides that the customer is important, their direct reports will follow suit.

Vision and clarity

Your vision for VoC needs to be specific so that everyone within the organisation can easily understand the common goal. Start by focusing on the language and messaging you’ll use to convey your vision. We recommend a short and simple vision statement to help you increase understanding and buy-in from leadership.

Engagement and collaboration

An engaged workforce is vital for the long-term success of a customer-centric company. And as employees become more engaged, cross-functional collaboration and synergy will create more impactful and successful customer initiatives. To truly engage your workforce, you have to understand them. The most tried and true method for doing so is by implementing a formal employee experience program.

Listening and learning

A systematic method for monitoring and collecting customer feedback is key to improving the overall experience. Because customer feedback can be gathered via multiple channels it’s important to build any listening program on a robust platform that can to pivot with customers as their feedback preferences change.

Alignment and action

Alignment means that all members of a company are marching towards the same vision, and each workgroup defines what action they must to take to help realise that vision. Generally speaking, action refers to the measurable steps taken to improve the customer experience. A properly designed root cause or driver analysis will help you identify what areas to take action on.

Patience and commitment:

As much as it pains companies to hear this, building a world-class customer culture is not an overnight exercise – nor is it one that can be completely outsourced. Like it or not, the most successful customer-centric organisations in the world are built in an iterative fashion over a number of years. Customer culture is slowly altered, collection practices are refined, analyses are increased in complexity, and action becomes widespread and aspirational. All along this journey, leadership must demonstrate patience and commitment to the process and vision.

Find out about our Voice of the Customer solution

Follow these best practices when building your program

The Voice of the Customer provides early warnings and direction for your success, directly from the people who really matter—your customers. Employ these five “must-haves” to realise continuous improvement in your VoC program.

Connect feedback across data channels

Many organisations rely on one or two channels to measure and optimise their interactions with customers, which limits the accuracy and depth of customer insights. Without an omni-channel feedback tool, voice of the customer programs offer incomplete information about customer preference, behaviour, and satisfaction. Additionally, leading brands and organisations want to collect customer feedback everywhere their customers are so they can create a more seamless customer experience.

Collaboration across departments with action planning

To create an effective VoC program, multiple departments must be involved in collecting, analysing and acting on the insights. It should be easy to collaborate across departments using action planning tools — Qualtrics allows you to tag owners, set deadlines, and even supply step-by-step guidance to enable everyone to delight their customers.

Incorporate the voice of the employee

Connecting the employee and customer experiences gives any organisation a complete picture of what is really going on and why. Understanding this connection will help your organisation understand the impact of employee engagement on the bottom line.

Employees’ feedback does three essential things when it comes to customer experience. It:

• Provides context for customer experiences
• Helps identify process, policy, and technology hurdles that hinder experience delivery
• Gives insight into the quality of employees’ experiences.

Use dashboards and reports to surface insights to the right people

A true VoC platform allows you to make sense of what’s going on in your business. You’ll want a platform that allows you to configure dashboards for every role and provides relevant insights for the right people to see.

Qualtrics allows you to create automatic actions and alerts based on location, responses, behaviours, department, role, and more. You can also loop in the right stakeholders automatically based on the feedback received from the leadership team to the frontline.

Deliver clear ROI and business results

Any successful customer experience program needs to deliver returns back to the business, so it’s essential to go in with an ROI mindset and focus everything from your measurements and metrics to the actions and improvements you put in place on what they’ll deliver back to the business.

ROI is not simply reporting on the VoC metrics like  Net Promoter Score (NPS), Customer Satisfaction (CSAT), and Customer Effort Score (CES) but instead tying improvements in these metrics back to a financial metric.

That means focusing on:

• Market share — this includes optimising market penetration by widening your appeal within your target market, increasing share of wallet by getting your customers to spend more with you than they do with your competitors and boost category spending by taking what your customers are spending in other areas and getting them to spend it with you instead
• Cost — every activity has a cost, so understanding the costs to serve, acquire and retain and weighing them up against the projected gains of any increase in those areas is an essential component. An improvement in one area may see an increase in retention, but if the cost of that activity is greater than the projected improvement on the bottom line, it’s not worth doing.
• Efficiency —  typically a function of time which is whether it’s the total number of man-hours required to complete a task to satisfaction or the total amount of time from beginning to end.

As a result, Customer Lifetime Value (CLV)  has become the premier financial metric in customer experience. This takes into account a whole range of individual metrics from share of wallet and market penetration to cost of acquisition and customer retention to provide a robust metric of ROI.

Focusing solely on a single metric like customer acquisition doesn’t take into account the other factors at play — for example an increase in your churn rate, nor the fact that at the start of the lifecycle, a customer is typically a cost to the business, meaning you won’t turn the cost to acquire into profit for the first 12 months.

Focus on the customer

The customer should be top of mind in everything you do and you can’t assume you know what your customer wants. In order to stay ahead of the competition and meet your consumers where they are, you have to listen to what customers are saying to you and about you, then act fast. And you can do that by establishing a proven Voice of the Customer program that collects, understands, and share the Voice of the Customer knowledge your organisation needs to make confident, customer-focused decisions.