What is Voice of the Customer (VoC) and why is it relevant? - (Entrepreneur Series)


VoC is also known in many circles as Customer Loyalty, Customer Satisfaction, NPS, Likelihood to Recommend, etc. It's a customer-focused initiative that allows you track and maintain a healthy and happy relationship with your customers by collecting their stories or voices regarding your brand. It only needs 2 basic actions to jumpstart.. #1 Listening with Openness and #2 Following-Up.

VoC generally doesn't get the attention it deserves until a crisis has erupted and customer defection starts to impact the bottom line. Most businesses are very busy trying to push out the best product or service, relying heavily on sales and revenue as a measure of a healthy customer base. VoC requires you to be proactive - this means reaching out to your customers and having them tell you about their experiences at multiple touchpoints, rather than waiting for customers to give feedback when something (usually not-so-good) arises. If you are proactive, you'll more likely see, early on, when a problem is bubbling up, well before it turns into a full-blown catastrophe.


If my sales revenue are going up every week, why do I need VoC?

Most businesses invest heavily on obtaining new customers (e.g. advertising, sales people, marketing, etc.). The cost to acquire a customer is 5 to 25x more than the cost of retaining a customer (HBR). Sales revenue doesn't necessarily tell you #1) whether a customer is new or returning #2) whether a customer is trapped with you (e.g. purchasing with you but dislikes you) and #3) whether a customer has shared negative experiences about you.


9 out of 10 unhappy customers won't do business with your brand again


8 out of 10 customers read an online review that influenced their buying decision

(Inc.com)



The lifetime value of your customer is worth more than any one transaction, yet there are thousands of stories everyday on the web about poor customer service.....why is this?

Train your employees that every customer touchpoint matters. A good customer experience is not only free marketing, but it helps new customers make a decision on trying your brand.


Dissatisfied customers tell 9 to 15 other people about their negative experience

(Inc.com)



How do I start a VoC program with little or no budget?

Start with information you already have that details your customers' experiences. If these are verbatim comments from customers - try coding them into buckets and aggregating the frequency of particular pain points.

Next, map out your customer's journey and their touchpoints with your brand. Are you collecting customer feedback on all your key touchpoint areas? Find a cost-efficient way to elicit feedback about your product or service in a timely manner and decide on some simple metrics that you can track overtime and report out in simple reports and/or dashboards. Short surveys are a simple and effective way to get customer feedback, but try various channels of distribution (e.g. mail, email, text, website, receipt links, etc.).

Get senior leadership and executive sponsorship for your VoC program - no matter how big or small your program. This will help you evangelize the Voice of the Customer to your organization and activate cross-functional teams to take action on remedying customer pain points. Share out key customer metrics to senior leadership, while working with their teams to dive into the verbatim details to formulate solutions.


Your customers can tell you what hurts, but it's your job to find out what's broken and fix it

If resources permit, link your customer metrics with financials and assess what the true value of a happy customer is overtime. Make sure your customer metrics are collected and calculable at the individual level, or you won't be able to use any statistical tools with it (e.g. correlations, regressions, etc.). This is one of the main reasons why Net Promoter Score (NPS) is an insufficient customer metric - because it can only be calculated at the aggregate level (NPS = % Promoters minus % Detractors). If your organization is already using NPS, just take the Likelihood to Recommend metric instead and use that mean score to run your analysis instead.

Consider two case examples: 1) To determine whether "Quality of Products" is correlated with "Customer Satisfaction", metrics at the individual customer level are required for analysis. 2) To determine the drivers of Customer Satisfaction in a regression, again, you will need individual scores for Satisfaction and all the independent variables to run your statistical equation.


My Walmart.com Case Study

VoC can be tactical and strategic. Waaay back in the day when I was one of two market researchers at Walmart.com sharing customer verbatim comments out to the business was mostly tactical (e.g. it addressed very specific customer touchpoints). It wasn't until we designed a Customer Loyalty Index from 3 customer metrics that we had a key performance metric that every business category could target and track overtime. With executive sponsorship, this is how our VoC program became much more strategic in informing senior leadership and shaping our business model going forward.


If this was helpful, please share it and let us know - so we can do more in this series of quick tips for entrepreneurs. Look out for my next one - where I focus on user experience. If you'd like us to alert you on the next article or have ideas on topics we should cover for entrepreneurs - send us an email here




References:

https://hbr.org/2014/10/the-value-of-keeping-the-right-customers#:~:text=A%20refresher%20on%20customer%20churn%20rate.&text=Depending%20on%20which%20study%20you,than%20retaining%20an%20existing%20one.

https://www.inc.com/andrew-thomas/the-hidden-ratio-that-could-make-or-break-your-company.html

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