There is no questioning it; we are living in the age of the customer. Shar VanBoskirk, an Analyst at Forrester Research, stated that, “Only marketers who are customer-obsessed and adapt to consumers’ changing behaviors …will succeed.” This means that marketers need to better understand customers and shift to a customer-centric mindset. The only way to understand your customers’ intentions, needs and experiences is through a Voice of the Customer (VoC) program.
“VoC is now being viewed as a must-have strategy,” says Jim Davies, research director at Gartner. But there are still many misconceptions about VoC programs.
There are many misconceptions about Voice of Customer analytics so to set the record straight let’s take a look at five VoC myths and debunk them.
1. ‘A Voice of the Customer program is a nice to have’
This is of the biggest misconceptions that I come across. “It is just not mission critical at the moment”, “I need to improve the return on my current initiatives”, “I need to focus on reducing costs”. But the bottom line is that VoC data is critical to the success of any business especially in today’s customer driven and digitally connected world.
According to a recent Aberdeen Group report, companies that have Voice of the Customer programs outperform all others. Companies that have a VoC program in place experience annual revenue increases of 10.9 percent and 2.5 times better yearly return on marketing investments. Companies utilizing VoC saw a decrease of 6.3 percent year over year in their customer care costs compared to a 2 percent rise for businesses without a VoC program.
Obviously a Voice of Customer program is more than a nice to have, and the sooner businesses realize this, the sooner they will get one up on their competition.
2. ‘You don’t need VoC – Web analytics is enough’
Web analytics data is the cornerstone of digital marketing strategies, but it only tells half the story. Avinash Kaushik, digital marketing evangelist for Google and bestselling web analytics author, said that, “It [Web analytics] cannot, no matter how much you torture the data, tell you WHY something happened.” Without Voice of Customer data you can’t know why your conversion rate is only 1 percent or why 90 percent of visitors are bouncing from your site. To understand the reasons behind visitors’ behavior you need to have a VoC program in place. Digital strategies need to be anchored in customer centricity and the critical component is understanding the WHY behind the WHAT.
3. ‘Collecting Voice of Customer data affects conversion’
I too often hear that collecting VoC data can hurt conversion. This is a complete misunderstanding of why you have to collect VoC data in the first place. In reality, it is only by understanding what is working and what is not from your customers’ perspective that you can increase conversion. Furthermore, at iPerceptions we have collaborated with many e-commerce clients to test if there is any impact on conversion while running an on-arrival survey. Our tests have showed that there is no significant negative impact on conversion. The key is how you engage visitors for feedback. By being upfront, polite and providing customers with a clear and easy way to opt out, ensures you can collect VoC data without it impacting your bottom line.
4. ‘All types of VoC data are the same’
There is a variety of ways to collect the voice of your customers, ranging from passive persistent feedback buttons to random active solicitation. But too often, similar expectations are placed on different methods of collecting VoC data even though the nature of the information varies enormously. In reality, each VoC data stream offers a unique type of feedback, which should answer different business needs.
For example, passive persistent feedback, such as comment cards provides individually focused information that represents one person’s experience. Typically, this type of feedback is heavily skewed to the negative making it a perfect customer service tool than can be integrated into your CRM system. While, a random active solicitation invites a random sample of your website visitors to leave feedback at the end of their visit. This provides information that is representative of the population being sampled creating internal alignment and helps drive strategic decisions.
All VoC data is not all equal so don’t be deceived. Be clear what your business objectives are and make sure you leverage the right data that aligns to what you want to achieve.
5. ‘VoC data can’t optimize the customer experience in real time’
VoC data is one of the most valuable sources of first party data and is invaluable for measuring the past in the form of satisfaction and experience reporting and monitoring. But VoC data can be leveraged to do much more than just measure the past. At iPerceptions, we are evolving the traditional role of VoC to recognize a visitor’s intentions and experiences in real-time without the need to ask them. This is exponentially broadening the use of VoC data to optimize the customer experience in real-time from improving personalization to retargeting.
These are some of the main misconceptions I have come across over the last 20 years in the industry. What other misconceptions have you heard about Voice of Customer programs? Help us debunk a few more myths by adding them in the comments.
Great article but I take issue with “only way to understand your customers’ intentions, needs and experiences is through a Voice of the Customer (VoC) program”. It is not the ONLY way, it is one of several ways that are part of a portfolio of methods companies employ.
The choice of methods is conscious, not a haphazard collection of tools, to create a portfolio that the CX team or marketers or company are trained in and supported by technology.
Thank you for identifying some of the weak reasons enterprises can use for not generating actionable VOC data. Real-world insights from streams of data are essential to developing relationships with customers; and, without this information, an organization will never know how it is perceived. http://customerthink.com/corporate_reputation_and_advocacy_linkage/
I’d add that some companies have cut off VOC data from sources such as loyalty programs. Why? Because they didn’t do anything with the data; and, if that situation exists in an organization, it’s difficult for them to really understand their customers: http://www.targetmarketingmag.com/post/marketers-loyalty-programs-we-don-t-need-no-stinkin-loyalty-programs
Thanks for writing such a clear and straightforward piece on a critical element of one of the most important Customer Experience competencies – measurement. I am not sure this is in the spirit of ‘de-bunking’ myths, but I think it is also important to consider the following principles for any VOC programme:
1. VOC must be STRATEGIC – i,e. linked to the strategic objectives of the organisation – if you have a VOC mechanism and do not link it to strategy, it’s effect will be hugely limited
2. Your VOC must be ACTIONABLE – if you capture it and do not know what to do with t, you may as well stop collecting it!!!
3. The best VOC programmes allow you to take proactive action by PREDICTING customer behaviour. If you are still reacting to negative feedback ‘as it happens’, you may be falling into this trap.
4. If you have embedded your VOC programme into the organisation, you should be able to SUSTAIN it indefinitely into the future.
Once again, great article Duff – thanks for sharing your insight.
After reading your blog, I wanted to explore what, exactly, a VoC program is. I was disappointed with the vagueness of what my search uncovered. It seems that most articles assume that people already know – which is a red flag for misunderstanding.
So I came up with my own definition: “VoC is a process for the capture and measurement of customer opinions so vendors can develop insight for strategic and tactical planning.” As such, VoC is a thing, and not a strategy – although it can be used strategically.
I think VoC is an old idea that has become devalued by modern hype. In particular, I am concerned about, “only marketers who are customer-obsessed and adapt to consumers’ changing behaviors will succeed.” I agree with the idea, minus ‘obsessed.’ ‘Obsessed’ bugs me, because it panders to the breathless hype, and it’s emblematic how CX practitioners deviate from objectivity. ‘Obsessed’ means “preoccupy or fill the mind of (someone) continually, intrusively, and to a troubling extent.” I’m not sure how that definition comports with developing a sound customer strategy. It’s a powerful and catchy word, but disturbing in this context.
I realize that some will find my analysis to be semantic hair spitting. We need hair splitting. Without it, our ways of expressing these important ideas become muddled, and eventually meaningless. VoC is not a new idea. The term, and the technologies and processes for implementing it, are.
“A firm should seek to meet the needs of customers at a profit, rather than placing its main emphasis on its own internal activities and utilization of its resources . . . those who believe in the marketing concept feel that customers’ needs should be the firm’s primary focus and that resources should be organized to satisfy those needs,” E. Jerome McCarthy wrote in his iconic textbook, Basic Marketing. My copy turned forty years old this year.
“There is no other assistance which a salesman can turn to his account which is so valuable as the good will of a satisfied customer. It is, if properly used, a perpetual standing advertisement right in the locality where he needs it most.” – A predecessor to McCarthy’s idea, from my copy of “Salesmanship and Business Efficiency,” by James Samuel Knox, published in 1922. This book contains lots of other statements that today would be termed ‘customer centric.’ Many underscore the value of understanding customer needs, wants, and motivation, and describe how to convert them to sales.
Today, we spin the same ideas as novel. “Marketers are now required to anticipate their customers’ needs, wants, perceptions, preferences and expectations in order to be competitive.” Truly a durable idea. But if it were easy to do, every company could do it.
Thanks everyone for detailed and useful feedback. I’m glad I could dispel some of the myths about Voice of the Customer programs especially since it is such a critical investment in today’s customer-centric world.
Based on a recent CustomerThink study, more than 80% of companies have some kind of VoC program. Yes, they perform better than those that don’t, but that’s a low bar to clear.
Merely having a VoC program (typically based on surveys) is no longer a differentiator. Neither is using any particular metric (NPS, CSAT, CES) or a combination of metrics.
What differentiates leading companies are 1) more aggressive use of non-survey VoC sources, such as text, speech and social media; 2) a bias to take action to close the loop on customer feedback.
One last thing: A VoC program, however advanced it may be, is not the sole driver of business performance. I don’t know the specifics of the Aberdeen study, but I suspect it was done as a simple correlation analysis examining one factor (VoC) and ignoring other possible business performance drivers.