Are brands making the most of the voice of the customer?by
The growth of social media and online reviews means the voice of the customer is stronger than ever. As a result, many businesses have been working hard to become increasingly customer-centric by dedicating more resources to collecting and responding to consumer feedback. Businesses that do this well are not only more likely to improve the loyalty of their customers, but to reap significant financial benefits.
In fact, a recent report by the Aberdeen Group projects a 2% increase in annual customer care costs for business that don’t have a robust Voice of the Customer initiative in place, whereas those that do are expected to increase annual revenue by 10.9%. As an example, the infamously customer service-shy Ryanair has recently seen profit forecasts soar after adopting a policy of responding better to its customers.
The most progressive businesses also use the feedback to help them attract and acquire new customers and identify opportunities for improvement and competitive differentiation. By collecting feedback from as many channels as possible and sharing the insights across all departments, businesses are able to turbo-charge word of mouth marketing, drive down customer care costs and deliver a better customer experience. As a result, Gartner has predicted that Voice of the Customer (VoC) programmes will be one of the most significant investments that businesses make over the next five years, with the market set to grow 30% annually.
Although the business benefits from these programmes are clear, the battle around how best to implement them is far from over. While most companies use a range of tactics for listening to the customer voice, they generally lack a formal VoC strategy to ensure feedback is analysed effectively and the insights shared and leveraged across departments.
To better understand the current landscape, we explored the VoC strategies of a number of businesses including Schuh, Tesco Mobile, Selfridges and AXA Insurance to discover how they use customer feedback within their business. Although VoC activities are a widely accepted component of any customer-facing business, interviews conducted with these organisations suggest that the level of strategic planning is hugely varied. In light of this, we delved into our findings to unearth industry best practises and identified three key areas.
Listen to the VoC
When asked about which mechanisms are used to measure the VoC, most companies referenced traditional customer service channels such as phone, email, in store feedback and customer satisfaction surveys, as well as monitoring social media. Although these are helpful and essential, the benefits of a full VoC programme are unlikely to be achieved through these methods alone. As the interaction with customers via most of these channels tends to take place as one-to-one dialogue out of the public view, companies aren’t able to put the feedback to use as a means to promote their customer service excellence to prospective customers. In light of this, businesses should also be sure to actively in engage in open forums that enable a public dialogue with consumers.
A simple and effective way to do this is through the use of online reviews, and many businesses are already reaping the benefits. For instance, when UGG boot manufacturer Deckers Outdoor started to actively collect and display customer reviews on its website, its already impressive conversion rate increased by 15%.
As customers already talk about businesses online regardless of whether they are being asked to, it makes sense to be proactive in providing customers with a range of platforms to share their feedback. By collecting information from as many avenues as possible, businesses can ensure they have the raw materials to generate the data and insights they need.
Establish clear, quantifiable VoC goals
To understand the impact of VoC programmes, businesses need to analyse their data to produce solid metrics that can be fed back into the business as actionable insights. Having said that, due to the sheer amount of data being collected, it can often be difficult to work out where to start.
One method businesses use to measure results is the Net Promoter Score – a metric that assesses the degree to which someone is willing to personally recommend a product or service to friends and family. Due to the importance of word of mouth marketing, metrics such as this should be key considerations for companies when calculating the success of their VoC strategy. Online reviews can complement this by providing a real-time barometer of customer sentiment, while providing the functionality to respond to customers individually and to perform in-depth, segmented analytics by customer type (for example, by geography or demographic criteria). Review scores can also be fed into the NPS to achieve a more accurate figure than was previously possible.
Needless to say, an effective VoC strategy should always be underpinned by clear consideration of the targets you want to achieve – such as new customer acquisition, boosting customer advocacy and improving customers’ shopping experience online or in-store. However, to make sure these targets are being reached, businesses also need to link customer feedback to other data to fully capture the programme’s ROI.
By establishing metrics around customer service costs, stock price, customer retention, average transaction value and the impact of word of mouth marketing on customer acquisition and retention, companies can quantify the overall impact of their VoC initiative and its bottom line impact.
No matter how much effort is applied towards designing and implementing a robust VoC programme, most organisations do not exploit the insights they gain to maximum effect. While businesses shouldn’t necessarily act on every piece of feedback, being able to spot trends and common pain points to identify opportunities for improvement is an obvious opportunity for brands.
In our analysis, we found that although some businesses were collecting online reviews, the data was not always being shared across departments. Stuart McMillan, head of ecommerce at Schuh for example, highlighted that information from reviews “comes in and goes on the website” without an analytical approach. Despite this, our recent Business Survey report, which evaluated the value of reviews to businesses, found that 58% of business executives believe identifying opportunities for improvement is one of the most important benefits online reviews can deliver.
Additionally, it’s important to integrate customer behaviour data captured within CRM and ERP systems and ecommerce platforms with VoC data and feedback gathered from sales associates and customer service employees. After all, actions do at times speak louder than words.
Although VoC strategies are still in their early stages, it’s important that businesses act now to ensure they are prepared for its growth. By listening, measuring and acting on customer feedback, companies can place themselves at a distinct advantage going into 2015.
Nico Lutkins is global director of enterprise marketing and customer advocacy at Trustpilot.