Voice of the Customer – Attributes of an Effective System – Part 2

In our last voice of the customer discussion, we focused on four attributes of an effective system according to John Goodman, author of Strategic Customer Service : 1. Unified Management of the Program 2. A Unified Data Collection Strategy 3. Integrated Data Analysis 4. Proactive Distribution of the Analysis. In this article we’ll discuss the Goodman’s four remaining attributes.

1. Assessment of Financial Implications and Priorities – Goodman stresses the importance of realizing how customer expectations and behaviour impacts revenue and profits. The main goal is to determine what is the cost of inaction. In order to get a true view of the customer service data , Goodman believes that it’s necessary to translate customer satisfaction, loyalty and word of mouth data into general financial impacts. The Voice of the Customer initiative must provide the economic impact information required for management to make the proper decisions. Properly assessing the financial impact creates an avenue for creating improvement priorities and actionable steps.

2. Defining Targets for Improvement – In addressing this attribute, Goodman identifies two roadblocks to success: 1. The person responsible for fixing an issue identified in the data analysis process is held accountable for doing so in addition to his/her day to day responsibilities. 2. A successful outcome is rarely defined for this person. Now we all know how important it is to have achievable targets when tasked with improving a situation. Goodman suggests one also refrain from the common exercise of “satisfaction planning”. An example of this is where a company is at a satisfaction level of 76 % and decides to raise next year’s acceptable level to 80% because 80% is higher than 76%. Goodman instead recommends using the Market-at-Risk analysis to identify which improvements to make, assign responsibility for implementation and suggest the expected rise in loyalty and satisfaction along with estimated cost and return on investment. This methods allows management to develop rational plans for reaching satisfaction levels and loyalty goals.

3. Tracking the Impact of Actions – Goodman strongly suggests the development of a process to ensure that things in fact do get fixed. This is the follow-up step to the creation of an action plan. Companies should be interested in knowing what percentage of issues identified by the voice of the customer initiative are actually addressed. Goodman feels that this information should be passed on to finance and senior management. The voice of the customer initiative can virtually die if this process is not put into place. Should this be allowed, what’s the financial impact of gathering data, man hours utilized to gather the data, analyzing the data and preparing reports, but not developing a follow-up system? Hopefully, the importance of tracking the impact of actions is very apparent.

4. Linking Incentives to the VOC Program – When the voice of the customer initiative is accepted as having the goal of proactively responding to customer needs and increasing customer loyalty, Goodman feels that the organization has accepted that voice of the customer initiative must be linked to both strategic and day-to-day decision making. The organization can accomplish this by senior management linking incentives to suggested actions and provides funding for those incentives. Goodman states that in his work with various organizations, he has found in order for the voice of the customer initiative to make a positive impact (meaning that management addresses most of the identified issues) at least 20% of incentive compensation must be linked to identified voice of the customer initiatives.

When developing your voice of the customer initiative, remember it’s important to perform an Assessment of Financial Implications and Priorities, then Define Targets for Improvement, follow that up by Tracking the Impact of Actions and to insure the success of your initiative Link Incentives to the VOC Program .

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