You may have heard of Voice of the Customer (VoC) but not fully understand what it is? Here’s a quick explainer and five key benefits you’ll get from running a Voice of the Customer programme.
What is Voice of the Customer?
A VoC programme researches customers’ needs, expectations, preferences, and aversions and acts on the findings. It’s different from other forms of research because it’s based purely on feedback.
It’s about listening to your customers – letting them be heard, and understanding how they feel about your business, products, and services.
It’s important to get key insights into what your target customers really need. You need to find out what the gap is between your customers’ expectations and their actual experience. When you do this, the insights shape your strategy, and build competitive advantage. This allows you to achieve deeper customer profitability.
In today’s channel-agnostic environment, customer journeys are increasingly more difficult to track, and customer behaviour is hard to understand.
Customers have growing expectations and concerns about their interactions with organisations, and these are reflected in their behaviours, such as:
- Immediacy demands – customers expect quick issue resolution and answers to questions
- Loyalty decrease – customers are always looking for better deals
- Switching frequently – customers switch because there is less friction to hinder them
- Publicly vocal – customers use social media to publish dissatisfaction and complaints
These challenges set very high expectations to deliver against, and demand a great customer experience. Unless you solve them you will lose customers to your competitors and ultimately your brand reputation.
A VoC programme will inform and help you to tackle these challenges. The good news is that the number of methods and ways to collect data and feedback is increasing, making research projects much easier.
5 benefits of Voice of the Customer
1. VoC helps to build stronger relationships with customers
We all know that it costs five times more to acquire a new customer than retain an existing one. Studies have also shown that existing customers are 50% more likely to try new products, and spend 31% more compared to new customers. Retaining customers is key.
2. Crucially, VoC reveals opportunities to improve customer experiences
A deeper understanding of your customers’ expectations will help you better support them. When you offer customers an easy and effective way to voice their opinions, and be heard, it goes a long way in building trust and loyalty.
3. It uncovers current or potential pain points and allows companies to learn from their mistakes
The data gathered will show what customers think about certain issues and help you to contextualise, prioritise, and decide on how these should be addressed.
4. VoC helps companies to provide exceptional service to customers
Voice of the Customer is commonly used to gauge customer satisfaction levels, providing direct insight into improving customer service.
5. A good VoC programme can be used to drive incremental value
The insights will help you calculate Customer Lifetime Value (CLV) which is the premier metric in customer experience. Understanding metrics such as share of wallet, market penetration, cost of acquisition, ROI, retention and churn rates all help to determine a customer experience-led strategy that creates happy customers.
Your organisation requires some basic pre-requisites to carry out a successful VoC programme.
First, you need strong leadership to establish a customer-centric culture that starts at the top, where behaviour is modelled and cascaded down.
There should be a clear goal and vision that articulates successful customer outcomes as a key part of the company’s mission – in other words, a customer charter.
You need a process to link solicited and unsolicited feedback across multiple channels, to allow you to connect and engage with customers at key touch points along their customer journey.
You need to collaborate across functions in the business, particularly in the design, execution, analysis, and action planning stages. By leveraging dashboards and reports you can integrate VoC insights within internal forums. This improves how functions work together and will drive business decisions that support a customer-centric strategy.
Finally, your VoC programme is not just a one-time exercise. You should apply it when you want to test key changes or find out causes to KPI disparities. It will answer those questions.
Consequently, when used appropriately, VoC will support a mindset shift that develops and embeds continuous improvement into your organisation.
Need help to start?
Obviously if you don’t have any of these basics in place we can help you. Once established we can work with you set up a VoC programme.
For a friendly chat or just a bit more information, please reach out to me.