Voice of the Customer: What it is and how to use it

Khoros Staff

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

These programs help capture valuable customer insights, which in turn provide usable recommendations for your business. Today, heeding customer feedback holds greater significance than ever before, as businesses tend to underestimate the frequency of customers’ poor experiences by an average of 38%.

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

What is Voice of the Customer?

Voice of the Customer is a process that captures customers' feedback about their experience with a business's product or service. A VoC program can help provide insights into customer expectations, problems, complaints, preferences, and needs. Voice of the Customer programs do more than collect this information; they give businesses actionable recommendations based on customer feedback, so they can improve customer satisfaction and loyalty.

What is VOC

Listening to the Voice of the Customer and obtaining vital customer insights is widely used in large and small to medium-sized businesses. Voice of the Customer programs work well for brands because capturing and acting on customer feedback is critical to understanding consumers’ complex decision-making process. VoC ultimately helps brands attract new customers while improving retention among existing customers.

Why is Voice of the Customer important?

Improving your brand's customer experiences (CX) has become a business imperative. Businesses can increase sales revenue by 2-7% and profitability by 1-2% by improving the customer experience and 83% of customers cited good customer service as their most important criterion for deciding what to buy. Businesses must consistently provide outstanding customer experiences to compete in the market. This is achievable if they understand the experiences they provide by using VoC.

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 in identifying potential issues or opportunities before they can become more prominent.

CX ROI Calculator

How to conduct Voice of the Customer research

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.

It’s also important to understand the three types of VoC feedback before building a VoC program:

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 of their customer’s entire experience.

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. 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 that 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. 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 the Customer best practices

Understanding and integrating the Voice of the Customer is an integral aspect of any thriving business strategy. To further elevate customer satisfaction, implement these VoC best practices.

Unify Voice of the Customer tools

As you can see, Voice of the Customer analytics can be complex. 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 such as consolidating all Voice of the Customer tools into an omnichannel platform. Unifying Voice of Customer tools empowers businesses to get more value from more data sources. Here are some of the benefits of unifying VoC tools:

1. Aggregate and normalize customer contact and feedback

Having a single source for customer experience 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. Classify 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. Visualize data 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 omnichannel 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 omnichannel CX analytics platform can harness the unique value of each channel for synergistic results.

4. Utilize 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.

Unifying VOC

Incorporate the Voice of the Employee

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. Organizations 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:

  • 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).

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

  • 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.

Deliver clear ROI and business results

When it comes to improving your customer experience, it’s important that your strategy generates business advantages. You should approach ROI with a focus on how it contributes to the company, from how you measure success, track key numbers, and implement improvements. It’s more impactful to tie improvements in CX metrics such as Net Promoter Score (NPS), Customer Satisfaction (CSAT), and Customer Effort Score (CES) to the company’s financial performance.

This means you should focus on:

  • Market share — This includes maximizing your presence within your intended audience, enhancing customer spending exclusively with your brand over competitors, and encouraging customers to allocate their overall spending towards your offerings rather than elsewhere.

  • Cost — It’s important to grasp the expenses involved in serving, acquiring, and retaining customers. However, if a cost outweighs an expected positive impact, it may not be worthwhile.

Efficiency — This often revolves around time, whether it’s the total manpower required to complete a task to satisfaction or the overall duration from start to finish.

Voice of the Customer examples

Businesses can truly benefit from paying attention to the Voice of the Customer. Here are some examples of brands who have successfully collected and acted on customer feedback through Voc techniques:

1. Netflix

Netflix collects customer feedback through a simple thumbs or thumbs down rater. If you’ve been a Netflix user for a while, you may have noticed that this used to be a 5-star rating system, where they asked customers to rate their experience on the show or movie they watched. However, many customer were confused and thought it was to rate the production, not their personal preferences.

Netflix thumbs up or down feature to indicate customer preferences

Netflix made the switch to the thumbs up or thumbs down rater to discover their customers’ personal preferences better. This switch led to a 200% increase in engagement.

2. Amazon

Amazon implements various VoC techniques to improve its products and customer service. The online retailer learns what customers like based on what they shop for by collecting data on what their customers purchase, add to their cart, or look at. This way, they recommend the same or similar products when they return to Amazon. They’ll also recommend products that are frequently bought together, and additional items purchased by other customers. These strategies add up to 35% of the company’s annual sales.

Amazon recommendations based on customer activity

Amazon also takes advantage of social listening. Tracking data on social media platforms lets the company see what customers want, who they are, and how they react to certain products. From this data, they can create a new listing based on the demand for a product.

3. Apple

If you’ve ever visited an Apple store for a service at the Genius Bar or even completed a purchase online, you were probably asked to share your opinions soon after. Apple uses surveys to collect customer feedback on their products and shopping experiences. Using information from surveys, Apple is able to gather insights about it’s customer experience to identify areas for improvement.

Apple survey to gather customer feedback

Leverage Voice of Customer solutions with Khoros

Listening to the needs of customers isn’t optional 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.

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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