Customer experience: powered by Voice-of-the-Customer
Most executives recognize that customer experience is important to their business. In fact, Gartner Group says that 89 percent of companies expect to be competing primarily on customer experience... as of now (better hurry).
To compete on customer experience, companies need to consistently deliver a better experience. To do that, they need to understand the experiences they’re delivering today. This is why Voice-of-the-Customer Programs are such a priority for so many businesses; the ability to listen to your customers is crucial to your ability to compete on customer experience.
In fact, fully 95 percent of companies say they regularly listen to their customers. Of these, 84 percent regularly ask customers for feedback, while 11 percent do so occasionally. Yet despite this widespread collection of customer feedback, only 29 percent of firms with VoC in place systematically incorporate insights about customer needs into their decision-making processes. And nearly three-fourths don’t think that their VoC programs are effective at driving actions.
Sadly, they’re right. An HBR article noted that marketing decision makers in the Fortune 100 use data just 11 percent of the time to make decisions that affect customers.
Doing the math: VoC leaders consistently blow away the rest of the pack.
A recent Aberdeen Group report titled The Business Value of Building a Best-in-Class VoC Program (download with free registration) nails this to the wall. According to their research, Best-in-class VoC users—the top 20 percent of respondents, based on performance—enjoy an almost 10-times greater year-over-year increase in annual company revenue compared to all others.
I don’t know about you, but that number is eye-popping to me. At the end of the day, radically increased revenue growth is what it’s all about. Some of the other findings that help contribute to that top (and their bottom) lines include that fact that, compared to all others, best-in-class VoC users also:
- Enjoy 55% greater customer retention rates
- Have an average 23% decrease in year-over-year customer service costs
- Sport 292% greater employee engagement rates
VoC Programs are the only way to systematically listen to your customers, use this information to take action, and monitor your performance over time. The truth is, customer experience “lives” entirely in the minds of your customers. Great experiences mean expectations are exceeded; good experiences mean they’re met; bad experiences mean these expectations are not met.
If you don’t understand customer and market perceptions or how interactions with your firm are being experienced by your customers, it’s nearly impossible to regularly meet, much less exceed, customer expectations, or to improve your organizations performance.
Customer experience leaders are VoC leaders
At a high level, VoC leaders are better than just about everyone else at doing a few things consistently. I go into more depth in my article here on designing a VoC program, but the upshot is their unparalleled ability to systematically collect and analyze customer data, followed by the ability to consistently put these insights into action. Examples of this include customer experience leaders like:
- Zappos: When it comes to creating great experiences, Zappos says that the number one tool any company can use is listening. Backing this up with action, they “respond to every single customer inquiry, whether it's via phone, email, live chat, Twitter, Facebook, Zappos blog, etc.” In fact, many of their experience improvements are inspired by customer feedback.
- Apple: Listening to customers is more than lip service at Apple. CEO Tim Cook reads—and sometimes responds to—up to a hundred customer emails every day. And despite the myth, Steve Jobs really DID listen to customers. Maybe people don’t know what they want until you show them. But if you show them and pay attention to what they say and do? Bingo.
- QVC: A top CX leader (number two in one national study, behind USAA), QVC encourages customers to share via product feedback, ratings, community forums, and on-air testimonials. They regularly listening to and thanking customers by promoting Customer Picks, and responding to all kinds of on-air questions. It’s real-time, transparent VoC.
- Amazon: All departments at Amazon, are completely data-driven—based on the success and failures of the customer experience. And like Apple’s Tim Cook, CEO Jeff Bezos is a hands-on advocate for VoC, driving it from the top. To which, he’s known for forwarding emails from unsatisfied customers to members of his team and demanding a fix within hours.
Customer experience: powered by Voice-of-the-Customer
Your customers will tell you what their experiences are. In fact, listening to your customers is the only way to systematically deliver a better customer experience. This “outside-in” view of your company, combined with a deep understanding of your customers is how CX leaders lead.
This is where Voice-of-the-Customer (VoC) Programs come into play.
The bottom line is this: Listening to the needs of your customers isn’t an optional exercise; it’s mandatory. Even if you don’t intend to differentiate on customer experience (and you’re in a small minority if so) the value of listening to customers is real, measurable and immediate.
So get cracking. If you’re anything less than 100 percent enthusiastic about your ability to address customer needs, begin the process of designing and deploying a VoC program for your business. You won’t regret it.