Voice of Customer - How Does It Matter
Apple became the first private company to hit the 1 Trillion Dollar mark in terms of market capitalization. This feat was soon achieved by Amazon as well. There is something in common between these two companies, apart from their massive market capitalization. They both tap the Voice of Customer (VoC) in a very efficient manner to extract maximum profits. The result of this simple activity is very evident in the markets. Steve Jobs had said "Get closer to your customers than ever. So close that you can tell them what they need before they realize it themselves." Needless to say, capturing and acting on the Voice of Customer to make one’s company better is a sure shot (and sometimes the only) means to success.
A customer will not buy a company’s products or service if it does not meet their demands. In order to sell as well as to make profit, it is important for the manufacturer to understand the customer’s needs and to know if the company is meeting their customer’s expectations. In fancy managerial terms they call this the Voice of Customer. Wikipedia describes it as an “in-depth process of capturing customer's
expectations, preferences and aversions.” Qualtrics defines Voice of Customer as a term that “describes your customer’s feedback about their experiences with and expectations for your products or services.” It can be called as a yardstick to measure a customer’s needs and their satisfaction after availing the goods and services of a company.
Why Does Voice Of Customer Matter?
It is important to hear and act on the voice of the customer because when a company does these two tasks, its customers tend to be happier than the customers of those companies who don’t do the same. Happy customers are a recurring lot of people; they are loyal and buy more. It is this loyal base on which a company thrives and makes profit. Profit making is the fuel of a company’s engine (if it is not state owned or philanthropic) and to make profit, the two exercises mentioned earlier seems to be inevitable.
An effective Voice of Customer mechanism allows a company to listen to the customer, know their needs, and then customize or optimize their products / services according to the customer’s needs. If a company is falling out of line of its customer’s needs then an effective voice of customer mechanism allows it to fall back in line. With the help of their customer’s feedback, a company becomes dynamic and keeps itself updated with respect to the needs of its current and potential customers. It might even attract new customers by following the same process. There could even come a time when a company might start predicting its customer’s behavior after a detailed analysis of their customer’s feedback.
Some popular methods to capture the voice of customer are to question the customers and analyse their behaviors through interviews, online and offline surveys, live chats, social media accounts or pages, recording the company’s customer care calls, etc. First hand methods of data collection are considered to be the best and most authentic ones. Questions can be framed to get the desired answers. Keeping a tab on the reviews and ratings of the goods and services provided is also a good option. On the other hand keeping a good customer grievance reprisal mechanism is another good method. It allows the company to know where it is failing to meet the customer’s growing demands.
Frame questions in such a manner to capture customer satisfaction and extract maximum information. To understand customer satisfaction, it is important to:
- Understand what the customer expects from the products or services provided by the company. Direct questions like what tasks do you expect the product to perform.
- Ask about suggestions for improvement. This makes them feel included in the process and increases their loyalty. For example Can you give some suggestions or tell where we were lagging behind.
- Assess if they are likely to buy again.
- Measure Net Promoter Score(NPS) in the process. Net Promoter Score is another methodology that allows companies to measure the loyalty of a company’s customers. For example Would you recommend our products to your family and friends?
- Assess the competition and know what makes the company’s products or services desirable or undesirable. Questions like why did you choose this product even though an arsenal of related products were available in the market.
- Ask targeted questions. For example if they think spending on it was a right decision for the services it provided. Or was spending on it value for their money.
- Understand the sentiments of the customers.
Capturing Voice of Customer is not enough nor is just measuring customer’s satisfaction. It is equally important to analyze this data and act on it. If a company is smart enough then it will monitor this data to form a broad framework of customer behavior to yield maximum profit out of it. Customers leave footprints, if these footprints are followed properly, companies can turn this raw data into real gold. Monitoring customer behavior itself has many benefits. Most of all it acts as an early warning system that allows the company to optimize its resources accordingly and avert future losses.
Thus, we can conclude that Voice of Customer (VoC) is an invaluable metric to any company. The benefits are far too many. After seeing its benefits, one starts to wonder why an ambitious entrepreneur or company would ignore the voice of customer and not act on it. It is not surprising to find that top executives like Tim Cook and Jeff Bezos have followed the same technique to keep their businesses booming. It is advisable for companies and entrepreneurs to follow this simple exercise to make profits and achieve enviable heights; and at the very least, to sustain itself in this competitive economy.
Posted in Analytics, Customer Feedback
Tagged customer feedback, customer relationship, customer satisfaction, customer satisfaction measurement, customer satisfaction questionnaire, customer survey, Voice of Customer