• CX Insights

What is Voice of the Customer (VoC)

by Khoros staff | Feb 03, 2023

Voice of the Customer (VoC)

Voice of the Customer (VoC) programs are becoming increasingly popular as leaders are grasping the opportunity they present for growing brand loyalty and increasing sales.

VoC programs can potentially make a company considerable ROI by propelling product innovation, demand generation, and higher retention rates. In essence, what these programs do is capture valuable customer insights, which helps teams make more actionable recommendations across the entire enterprise.

In this blog, we will take a deep dive into the Voice of the Customer — why it's so important, how businesses can implement Voice of the Customer programs, and what VoC data can be uncovered through tools. You will also learn how to use VoC insights to understand your customers better and, ultimately, improve your bottom line.

What is the Voice of the Customer?

Voice of the Customer (VoC) captures information about customers' thoughts and feelings about their experience with a business's products or services. VoC summarizes customer expectations, preferences, experiences, needs, and feedback. Voice of the Customer does more than collect this information; it emphasizes understanding each factor to improve brand products and services.

What is VOC

VoC programs are now more popular than ever. In many organizations, they have become a core business strategy used to improve offerings and the overall customer experience across all interactions with the brand.

These Voice of the Customer programs work well for brands because capturing and acting on customer feedback is critical to understanding customers’ complex decision-making process. Understanding VoC helps brands attract new customers while improving retention among existing customers.

Why is Voice of the Customer important?

Listening to the Voice of the Customer and obtaining vital customer insights is widely used in large and small- to medium-sized businesses. Improving your brand's customer experiences (CX) has become a business imperative. According to Gartner, more than 66% of marketers responsible for CX say their companies compete largely on CX. That number is expected to increase to 81% in two years.

Businesses must consistently provide outstanding customer experiences to compete in the market. This can be achieved if they understand the experiences they provide by using VoC. Understanding the Voice of the Customer is important for an organization's growth and success. According to Gartner, “Collecting and actioning feedback can increase upselling and cross-selling success by up to 20 percent. Additionally, decision-making rooted in customer feedback can lead to improved Net Promoter Scores (NPS) and increased top-line revenue from customer retention.”

Benefits of using a Voice of the Customer Program

When businesses implement and use Voice of the Customer correctly, it can provide several benefits including:

  • Better products/services

  • Improved decision making

  • Improved operational processes

  • Increased top line revenue

  • Higher Net Promoter Score (NPS)

  • More brand advocates

  • Innovation encouragement

  • Brand crisis identification

  • Increased Customer Lifetime Value (CLV)

  • Higher customer retention

VOC Benefits

Listening to the Voice of the Customer allows businesses to understand their customers so they can better serve their needs through improved offerings and experiences. Additionally, a VoC program also helps brands be proactive to identify potential issues or opportunities before they can become more prominent.

4 Voices that Provide Guidance for Brands

It is not only important to understand the Voice of the Customer; organizations also need to have a similar level of understanding of the voice of the business, employee, and process.

Here's a quick overview of each voice:

  1. Voice of the Customer (VoC) - expresses the needs, wants, and expectations that your customer has for your business.

  2. Voice of the Process (VoP) - details how well your process is doing in meeting specifications, targets, or goals. VoP is what your business is capable of producing or delivering. You can get this feedback by measuring your CTPs (Critical To Process) and CTQs (Critical To Quality).

  3. Voice of the Employee (VoE) - expresses the needs, wants, and expectations of the people who work for your organization.

  4. Voice of the Business (VoB) - defines the needs, wants, and expectations of the business owners, stockholders, stakeholders, and others who concern themselves with an organization's long-term success and viability.

The VoC should be balanced against the voice of the business, the voice of the employee, and the voice of the process. However, while an organization should listen to and consider all these voices, the Voice of the Customer is usually considered the top driving voice.

Customer loyalty is a crucial goal that brands strive for, but businesses should also consider things like how employee engagement can impact the customer journey. The voice of the employee can impact the customer and their journey as engaged employees are often more productive, passionate, invested in their work, and produce better results. Companies with engaged employees have 98% greater customer satisfaction and 50% higher customer loyalty than ones with disengaged employees. To ensure the well-being of your organization, it is essential to look for overlaps and conflicts between voices and eliminate or mitigate them.

CX ROI Calculator

3 categories of VoC feedback

VoC feedback generally falls into three categories:

  1. Inferred feedback: this inferred observation is based on how customers use your business products or services. Some inferred examples may include; the frequency of purchases a customer makes, how often and how long they use your business platform or solution, or the number of times a customer contacts customer service.

  2. Direct feedback: This occurs when a customer knows the organization is listening, such as when they provide feedback through a website, chat survey or customer interview.

  3. Indirect feedback: Indirect feedback can be gathered when a customer talks about a company, but not necessarily to the company directly. This indirect customer feedback can come in the form of blog mentions, social media mentions, or on a third-party review website.

VOC Feedback

All of these feedback categories should be considered when compiling VoC data. What a customer says directly to you can differ from what they say on social media. Without considering all three types of feedback, businesses won’t get a good view into their customer’s entire experience.

Techniques for capturing VoC data

Companies can conduct Voice of the Customer research in many ways, and they often draw on multiple VoC techniques to ensure a holistic picture of their customers. Here are some common data sources for Voice of Customer analytics programs:

  • Online customer surveys

  • Focus groups

  • Customer interviews

  • In-Person surveys

  • Emails

  • Dedicated feedback forms

  • Website behavior

  • Live chat

  • Customer support call data/call center transcripts

  • Social media listening

  • Online reviews

  • CRM systems

Collecting data from a wide variety of sources creates an overview of the customer. These techniques help identify intentions, desires, and pain points to optimize the customer journey better. VoC methods of discovery help enable data-driven decision-making across a company, which in turn helps teams in the organization be more successful.

Businesses must build an effective VoC program using both passive and traditional techniques, but proving the effectiveness of the VoC program relies on a single view of those customer insights to make data actionable. Of course, humans can only analyze a high volume of data from one source. Drawing connections between VoC is complex, but this is where Voice of the Customer platforms can empower businesses to get more value from more data sources. Voice of the Customer analytics tools are the foundation for building and managing a successful VoC program.

Building a data-driven Voice of Customer program

With a structured VoC process, a business can listen to customers throughout their lifecycle to help create a consistently improved customer experience. These programs plan for customer feedback to flow into and through a company in ways that inform and drive action. They provide a lens through which a company can see progress against business goals or improvements in a customer experience.

A VoC program must be linked to an organization’s key business priorities. To generate real value, businesses must be confident that their Voice of Customer analytics program produces accurate and reliable insights. To do this, businesses should follow a process which includes these steps:

1. Get buy-in

A business’s vision for VoC needs to be specific so that everyone within the organization can easily understand the common goal. As mentioned earlier, an engaged workforce is vital for the long-term success of a VoC program and customer-centric company.

2. Outline a question and set an objective

An effective VoC analytics program focuses on answering questions. The question can relate to previous metrics, trends, and new customer behaviors. A couple of example questions that a customer experience professional might ask are:

  • Why have customer retention rates dropped for a particular product in the last quarter?

  • How do customers feel about the recent changes to a specific offering?

  • How many customers feel loyal to the brand? What can be done better?

Established program objectives can gauge current customer experience performance or improve a specific business function, service, or product. After identifying a question and an objective, a business needs a systematic VoC method for monitoring and collecting customer feedback.

3. Collect and prepare VoC data

Above all, the VoC data a business collects should be appropriate for your outlined question. For example, a product-oriented question may need customer survey feedback, whereas a brand-focused question might need social listening feedback.

Customer feedback can be gathered through multiple channels. Customer listening posts can be installed at all business touchpoints and departments. Businesses can move their VoC program beyond surveys with multi-channel feedback including websites, apps, SMS, voice assistants, chatbots, and more.

It is important to tell a story and bring the customer to life across the business.

4. Choose the right Voice of Customer tools

If a business needs to compare complex trends over time, a simple survey analysis tool won't be enough to produce actionable insights. Voice of the Customer tools are applications, programs, or processes that gather opinions, views, and feedback from a customer base. Brands may find the need to use one or even a combination of VoC tools to collect and analyze different types of VoC data.

5. Analyze the data

Voice of Customer data comes in several types and presentation will vary from tool-to-tool. However, when your team analyzes the data to identify insights, the information should be organized in an easy-to-understand report that focuses on answering the brand’s questions from step two. For example, operational and experience data should help with understanding the emotions and sentiments inspiring customers’ actions. Different questions merit different reports, such as categorization or intention extraction. If a business has chosen the right tool for their VoC analytics program, it should be somewhat easy to identify the correct reports to run.

6. Draw conclusions

The last step is to draw conclusions. Some insights are self-evident and other insights may surprise an organization. Oftentimes a business will find answers to questions they hadn’t thought to ask. Unexpected insights like this are a great demonstration of how a data-driven Voice of the Customer analytics program is essential for identifying innovative opportunities.

7. Take action

Sometimes a business's best course of action will be clear. Some conclusions will be more complicated. Companies may need to drill down into specific data points or run more analyses. Some big wins take time and may be harder to come by because they’re often more long-term, strategic changes.

VoC analytics programs should be used to drive decisions across departments. Businesses should monitor performance over time and track progress against key metrics. As the VoC program evolves and matures, companies must deliver projections and seek new ways to provide value across the company. This is an area where more focus is required to ensure continued investment and support from leadership teams. VoC programs take time and entire organizations must demonstrate patience and commitment to the VoC process and vision.

Voice of Customer Example: Orvis

Since its founding in 1856, outdoor apparel and equipment retailer Orvis has excelled in two areas: superior outdoor equipment and customer satisfaction. However, at scale, Orvis found that maintaining the “customer is always right” level of service (what the company is famous for) is a true challenge, especially in today’s rapidly changing consumer environment. Orvis needed a way to understand the behavior of their millions of customers at scale, where trends and emerging issues become apparent, and in individual interactions, where the deep qualitative context on specific matters lies.

Orvis’s VoC objective

Like most retailers, Orvis received many customer service inquiries about product returns. Returns often indicate that something has gone wrong and provide an opportunity to turn a negative customer experience into a positive one. Returns also cost retail companies high due to lost revenue and logistical expenses. For these reasons, Orvis was determined to limit avoidable returns and prioritized reducing return-related calls through business process optimization. This was the objective of Orvis’ VoC program. Next, they knew they needed to gather insight to improve their business. To do this, they needed to qualify and quantify what their customers were telling them.

Implementation of Orvis’s VoC program

With the implementation of a Voice of the Customer program, Orvis began to aggregate data from every customer touchpoint, from phone calls to chat sessions, emails, SMS, surveys, social media, and online reviews. To enable actionable, relevant insights, Orvis implemented a customer classification model based specifically on Orvis’s business processes and products. With the model classifying interactions, and a CX insights platform analyzing contextual details, Orvis was able to reveal common patterns, anomalies, and emerging trends. Orvis also completed text or call recordings of every interaction that persisted in their system, so the Orvis CX team could drill down to the actual conversation level.

Use and analysis of VoC data

Orvis used VoC to help identify conversations about returns, track customer interactions, and uncover issues and insights. Analyzing this Voice of the Customer data helped Orvis discover that its exchange process was cumbersome for both the customer and agent, leading customers to return products far more often than exchanging them. Even more importantly, this cumbersome process occasionally frustrated customers — an experience that was not up to Orvis’s high standards.

Actions from VoC insights

After the VoC analysis, the company modified the process to make exchanges easier, resulting in greater revenue preservation, happier customers, and a 2-minute reduction in call time. Most importantly, Orvis quickly implemented training that enabled its agents to convert 58% of Orvis’ return calls into exchanges. Orvis took these insights beyond the contact center, revising their website and re-engineering their email cadence to add clarity. As a result, the company saw a 43% reduction in customers calling for return instructions, a 20% reduction in calls from customers asking for receipt confirmation, and a 37% reduction in calls alerting the company that a customer had sent a return.

With VoC insights, Orvis reduced handle time, converted more returns to exchanges, improved customer experience, and deflected inquiries away from their contact center. Their ability to quickly categorize and analyze support inquiries helped them identify areas for improvement in their contact center, website, and email cadence. Orvis proved that making VOC a central function of business operations can increase ROI.

Orvis results

Orvis could see great results from their VoC program; this success was also because they had a great VoC solution that helped them identify customer pain areas at every touchpoint.

The value of building a multi-channel Voice of Customer analytics program

The best Voice of Customer programs create ongoing conversations and gather information in a timely, efficient way. Businesses meet customers where they are across all the touchpoints — from sales to support and beyond. With today’s technology, businesses can collect and analyze VoC data from multiple sources and in various formats in one place. This is the most comprehensive solution for a unified, actionable view of the customer to create world-class customer experiences. It helps correlate direct, indirect, and inferred VoC data from different sources. This business solution provides a single view of all customer conversations and comments, normalizing and classifying the data for a comprehensive CX analysis.

Unifying Voice of the Customer tools

For organizations, the Voice of the Customer is vast. There are many questions to ask, requirements to identify, and strategies to curate all the data. Once all the data is collected, it is time-consuming to collate and analyze the data to see what your customer is trying to say.

Thankfully, there are solutions for consolidating all VoC tools into an omnichannel platform. The focus has shifted to the Voice of the Customer and the intelligent solutions that facilitate insights in real-time. Unifying Voice of Customer platforms empowers businesses to get more value from more data sources. Gaining VoC insights across a business's CX can be a game changer for businesses in any industry.

Unifying VOC

Benefits of VoC Tools:

1. Aggregating and normalizing customer contact and feedback

Having a single source for CX analytics, where all your customer interaction data is in one place, lets companies harness the collective power of every customer communication channel. We call this “agnostic aggregation” of data from different sources, for example, call recordings, chat transcripts, emails, social media, surveys, reviews, in-app communications, web feedback, and more.

2. Classifying each customer interaction with a taxonomy unique to the specific business with data enrichment.

Data enrichment means enhancing a data set with additional data obtained from other sources. With contextual classification, the insights provided are context-specific to the business. For example, CX analytics can go beyond classification by industry vertical. The unifying solutions can now customize the classification for a business and include product names, regional differences, customer slang, and abbreviations for products and services. This adds color to these models and makes them more actionable.

Another good example of this is enriching existing data with data from an omnichannel sentiment algorithm. With this kind of addition, companies get more insight into how customers feel and, more importantly, why they feel that way. This data is also highly actionable.

3. Data visualization down to the individual interaction in one place.

It doesn’t matter what tools you use for call recordings, chat hosting, email management, or surveys. All of them can be integrated and analyzed as a unified whole — just like the customer experience they represent.

A true omni-channel customer experience analytics platform is not bogged down by restrictions from using a variety of tools. The magic in these platforms is that you can aggregate customer interactions regardless of channel, normalize the disparate sets of data (different communication platforms, CRM tools, etc.), and apply a classification model across the data. By doing this, a member of your team can look across the entire customer communication ecosystem for themes, trends, and patterns of customer friction points in the data. A user of an omni-channel CX analytics platform can harness the unique value of each channel for synergistic results.

4. Utilizing artificial intelligence for continuous improvement.

AI-Enhanced analytics lets businesses see what they’re missing. A unifying tool for customer insights can use AI to dive deeper into customer interactions to identify changes in preferences and discover trends to help your brand improve every day. With AI working alongside a classification model, you get the help of cutting edge machine learning to continuously refine identification. AI features can also add value by flagging words and phrases not already in a business’s classification model — even those the teams don’t know their customers are talking about.

Key Takeaways About the Voice of the Customer

Listening to the needs of your customers isn’t an optional exercise for businesses that want to succeed. The value of listening to customers is real, measurable, and immediate. While the responses may not be all smiles, they can help reveal insights that spark positive change. Improving customer experience isn’t a project you launch once and then leave. Rather, companies should think about it as a new way of doing business where they put the customer voice first. Customer values do change and companies must adjust accordingly.

Enhance Your VoC Program with Khoros

Khoros offers a wide range of solutions to help support and enhance your VoC efforts across channels. Whether you’re collecting VoC data from social media, branded community forums, contact centers, or other sources — we can help you listen and understand your customers to inform strategic decisions. To learn more about how Khoros can support your VoC program, contact us or request a demo of our services.

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