What is Voice of the Customer (VoC) – basics simplified | The X Future

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Gone are the days when marketing was a one-way conversation where companies acted as their own wingmen and hype men all the time.

Now, it is all about personalized customer experiences and acing customer expectations consistently. In today’s competitive market, corporations need to be extremely mindful of what customers have to say, what they have in their minds, and how they can harness it to boost customer satisfaction.

Today’s businesses are all about being customer-centric and even the largest companies like Amazon are intensely focused on ‘winning customers.’

Thus your business activities must be aligned in order to increase customer loyalty, nurture customer relationships, and identify trends before most businesses.

At the same time, collecting customer feedback is not enough as customer feedback, on its own, holds no value- you must respond swiftly to customer insights.

Especially after the advent of social media platforms and other forms of feedback, both businesses and customers have become more aware, vocal, and take swift actions. 

As an organization, you must understand both positive feedback and negative feedback in their true sense, or you will end up deviating from your product roadmap.

But, how do you start gathering customer feedback that exists in the form of unstructured data spread across multiple channels?

A well thought VoC strategy can help you develop a deeper understanding of the complete picture and increase your odds of achieving sustainable long-term success.

To understand how customers’ expectations differ from what they actually get, companies look to Voice of the Customer data. Higher levels of customer retention and increased sales may be traced back to an organization’s utilization of customer-perceived value in its marketing efforts.

In this article, we will learn the basics of Voice of the Customer, how it impacts your company, and things you must consider when launching a VoC program. 

We will also go through considerations that determine which type of companies should emphasize VoC. Let’s get started:

Definition of Voice of the Customer (VoC)

The customer’s individual perspective on a company, product, or service which governs their behavior is defined as the “Voice of the Customer.”

It can be reflected in the form of customers’ comments regarding their experiences and expectations for your goods or services. To put it another way, it’s all about what customers want and how they want it.

In a nutshell, it can be described as the customer’s idea of your business/products-services, which can be in the form of affinity, aversion, reservation, and expectation.

As a result, a VoC program is best understood as the application of technology that incorporates text-audio-visuals analytics, sentiment analysis, and report building.

Knowing what your customers think and feel about your product or service is critical for your company’s ability to remain competitive in today’s volatility-infused markets.

A recent Gartner survey of customer service and support leaders found that 3/4th (74 percent) of them find that it is “essential/extremely important” to provide a smooth customer experience between supported and self-service channels.

VoC programs have grown in popularity among corporations in recent years and are now an important part of many companies’ overall business plans.

To better comprehend the complicated decision-making processes of potential clients, they are very useful tools for brands since consumers increasingly want more direct contact with their service providers.

Their ultimate objective is to find out what they anticipate from the company’s products and services. Using current technology, the Voice of the Customer (VoC) approach allows consumers’ experiences to be recorded and shared across an organization.

Organization leaders and senior executives can utilize these invaluable insights to create successful brands, more effective organizations, and better goods or services.

At the face value, your management may use these insights to:

  • Investigate what’s going wrong with your customer service.
  • Recognize the wants, needs, and customer concerns.
  • Improve product-market fit using the voice of the customer feedback received on top of the market research.
  • Enhance employee experience using direct input from target segments and make changes that positively impact cross-functional collaboration.

Here’s the list of common VoC data use cases as observed by The X Future:

  • Quantifying customers’ perceptions of the value of a company’s product and/or service.
  • Finding out whether and where an organization is keeping its promises and where it isn’t, and how it can be improved.
  • Improving the way products and services life cycle are designed to better suit the evolving customer persona.

How Voice of the Customer impacts your business

A research conducted by The Aberdeen Group titled “The Business Value of Building a Best-in-Class VoC Program” found that best-in-class organizations that adopted a VoC program and consistently acted upon the insights had a much higher customer retention rate of 87% than others (56%.)

The same report suggested that the best-in-class companies observed a 48.2% YoY change in their annual revenue against 4.9% in others, while their response time for responding to customer feedback changed at 30.4% YoY against 3.9%.

The study also found that implementing a voice of the customer program made it 23.6% less expensive to provide customer service on a YoY basis.

You may expect your customers to spend 31% extra if you have positive reviews, while 93% of them are likely to make repeated purchases if you have excellent customer service.

However, you cannot provide excellent customer service unless you know how your clients really feel.

By collecting VoC data, you can interact and engage with consumers across each touchpoint of the entire customer journey and systematically enhance their CX. This way, you can:

  • Identify warning signs of possible brand crises
  • Evaluate novel ideas, thoughts, and solutions.
  • Customize your goods, services, add-ons, and features to match your clients’ requirements and desires.
  • Improve client retention
  • Provide your consumers with the necessary solutions in a timely manner.
  • Enhance your brand value, business case, and longentivity

Effective VoC strategies focus primarily on constructive client engagement. They will give you the necessary insights to comprehend consumer preferences, issues, and complaints.

VoC helps you collect customer feedback efficiently and turn it into actionable insights

In today’s date, the number of platforms where customers talk about your brand is increasing at a higher pace than ever before. On top of that, the methods in which they can interact and express themselves are booming as well.

For instance, social media platforms allow users to share ‘stories’ which typically last for 24 hours, and they may choose to give you a shoutout or vent out in case of dissatisfaction. 

They may also use ‘stickers’ as a method of expression, which may have generation, region, or language-specific interpretations.

This way, it can be extremely difficult for businesses to record and analyze the opinions of a huge customer base. The complexity is further increased, especially due to the fact that user behavior and the way of expressing oneself changes with the platform, 

A full-fledged VoC tool integrated with channels of your interest will allow you to scrape customer feedback efficiently with the help of advanced technologies like ML, AI, NLP, and Big Data to analyze text, audio, and graphical data.

Since you get the results of qualitative and quantitative scrutinies undertaken with the help of multiple statistical, deterministic, and random relationship analyses, the insights you get are actionable. You may also implement a closed-loop feedback system to track the results of implementing VoC-based suggestions.

VoC strategy helps you understand customer journey better

With the number of platforms, methods of engagement, and expression on the rise, customer journeys are getting more complicated. This may leave you with multiple blindspots without having any clue about the same.

Ultimately, organizations end up with a faulty understanding of customer journey and act with insufficient data, creating long-term problems and solutions that aren’t needed in the first place.

With the help of a VoC program, you can become more attentive towards scattered, direct inputs regarding loopholes in your sales process, user experience, and client retention strategy.

Running a Voice of the Customer program helps you stay ahead of the competition in volatile market conditions

Since the socio-economic landscapes are changing quickly, it becomes imperative for corporations to make cost-effective, sustainable decisions. 

However, it is easier said than done as the parameters determining customer behavior tend to fluctuate higher with increasing volatility.

As a matter of fact, a lot of companies depend on their top brass’ experience and gut feelings when it comes to carving a niche for themselves. 

With the help of the voice of the customer data, they can understand what their target audience is seeking and build upon those aspects to create a competitive advantage.

This can be considered as one of the most crucial advantages of the voice of the customer initiatives since they help businesses to make the right decisions when it comes to making cost-sensitive decisions amidst volatility.

VoC programs helps improve your bottom line

While it is evident from the above advantages that VoC technologies can drive massive savings and well-researched marketing strategies, its impact on the bottom line is multifaceted.

Since VoC helps you make sense of the customer opinions scattered across various platforms in the form of granular data, it is natural that they are focused on different aspects of your product/service. 

Knowing which departments and functions within your company need attention, you can eliminate the inefficiencies with high accuracy.

Policy level changes are often dealt with considerably long scrutiny as making a wrong move could impact both the existing business and the brand reputation in the long term. 

With VoC data, it can be shortened and the decisions made are evaluated on a real-time basis, thereby boosting management’s confidence in such cases while they also increase revenue. 

Thus, well-strategized moves on the part of the corporate leaders and the staff having a better understanding of the impact received due to the insight-driven operational changes lead to cascading positive effects on your bottom line.

Things to consider when launching a new VoC program

Before selecting a VoC methodology(s) to drive your program, you must establish the program’s purpose and deliverables. If you simply begin data collection without a specific goal in mind, you will not know how to utilize the information to better your business processes.

In most cases, this must begin with revenue-oriented questions so that you can reverse engineer the bottlenecks to applying forward-thinking solutions. 

This could include purchase trends witnessed among existing/new customers, historical figures, market trends, or consumer habits. Let’s have an example:

A company witnessed a repeat purchase rate on a YoY basis as per the following data:

Year

Repeat Purchase Rate

2018

55%

2019

57%

2020

52%

2021

48%

Based on the above dataset, it may come up with questions like:

  • What changed between 2019 and 2021 that caused the repeat purchases from customers to drop by 9%?
  • What can we do to improve our repeat sales figures?
  • What kind of impact can we expect from our VoC-driven changes in the next three quarters?
  • What is the correlation between dropping repeat sales and customer satisfaction?

Such questions are intended for you and your stakeholders so you can create a goal: either measuring the existing performance of customer service or enhancing a certain corporate function or product.

Most firms gain benefits from initiating a Voice of Customer program to establish benchmarks against which to measure their future performance. Thus, they often ask the same questions throughout each cycle while also looking for better questions.

After selecting the goals and their purpose, it would be logical to choose a VoC approach for data collection and analysis.

For instance, if you want to see how consumers feel about your service team, you can run quick polls and pulse surveys after the service call through your CRM’s support ticket.

In order to simplify the process for our readers, The X Future’s customer success team has outlined three fundamental questions that you must ask yourself when developing your voice of the consumer plan:

These questions may influence your program structure and the required supporting technologies. The questions are:

  1. What business goals do we want to accomplish by implementing a VoC program?
  2. Given our strategic objectives, what VoC data must we capture?
  3. Given our targets and insight requirements, which data collection methods should we leverage?

Beginning with the most significant VoC question:

#1 What business goal are we seeking to accomplish by launching a VoC program?

Your response to this foundational question will determine the other important questions you will ask later. Typically, a VoC project is intended to fulfill one of two main strategic organizational goals that fall under your customer strategy:

1.1 Benchmarking

1.2 Continuous improvement

Factors that would govern the response to sub-question #1.1: Benchmarking

When conducting a VoC program that intends to establish benchmarks for various business processes with respect to customer preferences in your organization, it is necessary to understand that the order in which questions are asked is equally important as the set of questions you ask for a particular benchmark.

You must put a high emphasis on the metrics that characterize benchmark-focused surveys. 

For example, if you are looking to quantify a single open-ended question like how a smartphone app’s UI feels, aspects like “navigation” entail a multitude of factors.

Thus, you must undertake a more encompassing, granular study to determine the underlying problems as compared to choosing the color scheme for a CTA button.

Due to the inherent comparative nature of benchmarking, it is crucial that the survey experience itself is coherent with the benchmarking process. 

This involves delivering the logical set of survey questions to every responder, independent of their actual navigation route through the website. 

Remember, this might end up in a lengthy, irrelevant exercise for the responders if it is executed improperly, i.e., irrelevant question, irrelevant order, or both of them. 

Also, the quality of replies is determined by the accuracy of expression method (ratings, worded opinions) and relevancy; therefore, the longer and less relevant the questions, the fewer chances are that your VoC efforts would fetch explicit, accurate responses.

Therefore, you must be considerate about the fact that your benchmarking is indicative of your performance comparison and subsequent results.

Factors that would govern the response to sub-question #1.2: Continuous progress

If the strategic purpose is constant improvement, then the tactical objective of the VoC process is to comprehend causation. 

In this case, ratings are definitely valuable, but their impact tends to increase considerably if they are coupled with follow-up questions. 

They must be aimed at determining why the responder evaluated a particular component of the app with a certain score. For example:

  • “How effective was this feature, based on why you used it at the moment?”

The subsequent follow up survey question:

  • Please explain why you failed [or succeeded] in completing the action.

It is clearly evident that continuous improvement-focused surveys have a considerably higher proportion of rating questions and open-ended discussions. 

Naturally, responding to an open-ended question in a systematic method requires much more work from the surveyee; thus, the questions asked should be as brief and to the point as possible. 

In other words, continuous improvement surveys should be personalized to each responder so that the questions reflect the user’s specific journey through the mobile app and take into consideration their unique user experience.

This required ability to “customize” each set of questions for each responder requires a sophisticated survey system. 

It must be capable of analyzing user behavior and suggesting a series of customized, response-based dynamic questions that determine the user experience.

For example, you may ask:

“Hello, we found that you were using our app’s “latest deals” section under the pet accessories category. what do you think of our new stock?”

Next, you must add a subsequent question like:

“Please tell us why you feel positive/negative about the new stock.”

It is a no-brainer that there is a limit to the number of times you may ask a user to comment on such questions, so you must be selective about where, when, and what you ask in terms of elaboration. 

In this example, when aiming at continual development as the main use case, replies that help you understand what drives user behavior in a particular area of the mobile application become invaluable.

They will extend a deep, granular grasp of causation; by pinpointing the core cause of an issue, making it possible to resolve the problem permanently.

On the flip side, the positive responses regarding their experience tell you:

  • What features and design components to highlight and improve further.
  • What not to do while attempting to resolve other similar issues.

At times, you would come across survey ideas that seem to satisfy both of the above-mentioned aims. However, it is more important to understand what their responses will allow you to really do instead of what they focus on at face value.

#2 Given our strategic objectives, what information do we need to collect?

If you are looking forward to having benchmarking as the core of the objective of your VoC program, the responses you receive will be constrained by your respondents’ willingness to answer questions that may or may not be of interest or significance.

You might have to be cautious of the quality when collecting data since the respondents may be responding mindlessly to the questions just to get the survey completed. 

The results will be reflected in the form of trending metrics and rating data that must be broken down into as many subcomponents to ensure that the quality of customer insights is maintained.

On the other hand, if you are looking for continuous improvement as the main strategic outlook, you might want to have a complete change at the basic level, like using the word ‘capture’ instead of the word ‘ask.’

This is due to the fact that you will deal largely with the engaged customers that act as your internal stakeholders.

This would, in turn, require you to use much more advanced technological solutions that track user behavior across multiple touch points.

The comprehensive behavioral dataset might be utilized to generate experience-specific survey questions based on activity triggers. 

However, the complete, thorough picture of the respondent’s app usage in the case of our example would be the most significant analytical output of interest. 

It would help the analysts make sense of events like wish list generation, checkout abandonment, and window shopping.

The computation of behavioral data enables a far more detailed analysis since questions asked of the data may be triangulated using metrics, verbatim replies, and actual behavior. 

These analytical insights may be further recreated for scrutiny by combining survey data with app analytics data to understand possible outcomes under different scenarios.

In this case, there is no need to ask multiple questions to respondents since this approach requires post-processing data consolidation.

But, you must also consider that there is going to be no live/latest insight benefit since little to no responses are collected, leaving little room for behaviorally prompted questions.

Again, these conditions would make it extremely necessary to have smart technology on your side since ‘dumb’ VoC technology would do more harm than good.

Ideally, you would want to ensure that the results available are comprehensible for different roles at your organization. 

Let us understand this VoC requirement through the mobile app example:

The leaders would require only the top-level insights that are aimed more toward visibility than function, like NPS (net promoter score) trend data, systemic risk concerns, and initiative-specific indicators.

The digital marketing team would be focused on acquiring customer demographics that would help them improve their customer acquisition activities. 

The UI/UX team would be interested in the information regarding how app users respond to the reorganization exercises, new taxonomy, and aesthetic enhancements.

The procurement team would like to learn whether what led a historically popular product or category to lose its conversion rate.

Thus, there can be a huge list of insight areas that you must focus upon when running continuous improvement-oriented VoC analysis.

Combining behavioral capabilities with your surveys will help you get the best of both worlds. 

You may gather contextual data from survey respondents when it is technologically difficult to analyze behavioral data.

When undertaking such VoC initiatives, it is important to bucket the questions and distribute respondents among focus groups in order to generate dependable results.

This is due to the fact that your master survey meant to gather feedback may contain 80 questions with 8 common questions and 18 sets of 4 correlated variable questions based on 25 behavioral events. 

Clearly, no single respondent would answer all 80 questions, but you must strategically ask the most relevant question sets based on their activities, interactions, and outcomes.

#3 Given our strategic targets and informational requirements, which surveying method would be the most suitable?

At this stage, the roadmap for your VoC program and its role in business success would be quite evident. 

If you are aiming to benchmark, your set of requirements will be pretty straightforward, and it would need simpler technology.

On the other hand, if you are looking for continuous improvement as your aim, you would require a sophisticated solution with multiple converging technologies to deliver excellent results.

At this phase, you may seek the services of a business consultant like The X Future to help you figure out the best vendors and development roadmap for serving your interests throughout the technology implementation.

Which type of companies must implement Voice of the Customer programs

Once upon a time, companies evaluated client preferences by monitoring which products performed well, i.e., sold in higher quantities, and which did not.

Obviously, understanding what the buying public enjoys is an uncomplicated way to discover what to sell, but this is neither accurate nor a quick way to position your business for arising challenges.

For instance, it doesn’t reveal if certain aspects of your product/service need improvement or how happy your customers are with certain features. 

As it is no longer required to have multi-billion dollar innovation centers to disrupt a sector, it is necessary for all sizes of companies to adopt and implement voice of the customer programs.

Listening actively to customers provides greater assistance and guidance to the company management in driving initiatives and innovations.

On one hand, the voice of the customer helps in customer retention, and on the other hand, it supports the development and improvement of products and services to attract new customers.

The competitive advantages gained as a result of implementing the VoC programs are exclusive in nature as it would not have been possible otherwise by gaining access to customers’ notions, opinions, and experiences and then acting on all of these insights.

Summing up: VoC should serve your customers’ interests above yours!

No doubt, your customer success, operations, procurement, and R&D teams will all benefit from using Voice of the Customer strategies. 

 

By collaborating with each other, these departments will be able to understand and improve the customer’s experience at every step of their entire customer journey.

 

But for VoC to create and nurture not only happy customers but brand advocates, it is necessary that it serves your customers’ interests above yours. This is the only way you can reap the full benefits of investing in VoC and contribute to the longevity of your corporation.

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Picture of Neel Vithlani

Neel Vithlani

Neel is a creative who's always ready to lay his hands on anything that is innovative and captures masses. He is currently working with The X Future. Apart from technology and business practices, he drools over psychology, history, and cinematography. You can find him on hiking trips, talking over anything from alien belief systems to 90's cartoon shows.
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