It‘s important to know how your customer feels about your product or service. Your customer’s voice bears paying attention to, as the success of your business depends upon your willingness to listen to how your customer feels about your product or service.
It’s also important to monitor your operation for issues that may create negative experiences for your customer. While companies have attempted to adopt the Voice of the Customer (VOC) methodology, a 2007 Technical Assistance Research Program (TARP) study showed that only about half of companies have a coherent VOC process with over half of those companies consistently unable to get management to take action on identified issues.
This means that at the time of this study, seventy-five percent of companies did not have an effective VOC process. In his book, Strategic Customer Service, John Goodman defines VOC as “systematic efforts to gather and analyze data on existing customers’ wants and needs and to translate the results into action and increased profitability.” A critical component of the process is the accumulation of data via three different methods.
While most companies tend to focus on one common method; customer service surveys; this is but one data collection component of the Voice of the Customer system.
Let’s discuss all three components.
Internal metrics are characterized as leading indicators due to their nature of providing information to operations personnel. In other words, leading indicators, when monitored properly, allow time for addressing the issue with the hope of eliminating or minimizing the negative impact on your customer.
Your operation provides this data simply by reporting what is currently happening within your company. You are usually aware of this data before your customer. Examples of this might be low inventory which could result in missed buying opportunities for the customer, increased absenteeism in the call center which could mean more customer time spent in the call queue, or the identification of a faulty part that will increase warranty workload.
When one considers the financial impact of an internal metric issue, the need to pay attention may be greatly elevated. In regards to a warranty issue, identification of the faulty part may lead one to ask – How many of our products currently under warranty contain this part and how many of our products currently being built contain this part?
Are our customers experiencing issues with all of our products containing this part or is it isolated to one particular product (customer warranty requests should help you with this one)? If you determine if the issue is isolated to one product, is there another component within the product that’s contributing to this part’s failure? After this investigation one can simply do the math to determine the cost of not addressing the faulty part issue.
Should you determine that it’s just a faulty part within one specific product, then warranty replacement is certainly in order. Proactive notification may assist in slowing inbound customer communication regarding the issue. The next issue is to find a replacement part for inclusion on the production line so as to eliminate future warranty requests for products containing this particular part.
If your company produces 1,000 widgets with the faulty part per week with your facility producing this widget for 45 weeks per year and warranty costs are $125.00, that’s a cool $5.62 million dollars in possible future costs if that faulty part is not addressed and removed from the production line.
This data is gathered during employee interactions with the customer. When the customer contacts your company in person, via phone, or through your website and when personnel such as field support visit the customer, vital information can be obtained during these interactions.
The customer’s conversation provides information regarding issues they may be experiencing with your product/service. The key is to have a system into which the customer and contact personnel can log this information. It’s very critical for this system to exist as it creates an avenue for data analysis which is key in one’s ability to determine what issue should receive primary focus.
This component provides a high-quality level of customer experience information as it is gathered as the customer talks about their experience when utilizing your product/service. In keeping with the fact that only a small percentage of customers bother to call, write or email to complain about your product/service, one would need to consider how many customers are experiencing the same issue yet not bothering to complain.
TARP studies have shown that this multiplier can be 200 to 1 and in some cases as high as 2,000 to 1. The need to quickly identify complaint patterns and calculate the financial cost of not addressing the issue is primary.
Survey data assists in determining your customers’ level of satisfaction and loyalty to your product/service. Of the three components, it’s considered the best source for compiling this information. The survey must be properly designed and administrated to insure accuracy and effectiveness. The cost of $20 to $200 per completed survey can be a drawback when making the decision to utilize surveys.
I’m a proponent of designing the survey so that the customer first responds to statements regarding what the customer expects of a product or service – say a vacuum cleaner or air conditioner repair service. I then like to get the customer to respond to the same statement but make the statement relative to a Hurricane vacuum Cleaner or Joe Jones AC Repair Services. For example:
It’s important that an AC repair person thoroughly explain the problem and the recommended solution.
Disagree Somewhat Agree Agree Strongly Agree
Joe Jones, AC Repair Services repair person thoroughly explained the problem and the recommended solution.
Disagree Somewhat Agree Agree Strongly Agree
Just my preference.
As stated earlier, the key to gathering all of this data is to have a robust system where the information can be entered in a consistent manner by all users, with identifiers so as to allow sorting for analysis. Without this function, your VOC efforts will be thwarted by non-global data reporting and analysis.
The ability to incorporate all three components of data gathering is crucial to successfully implementing your Voice of the Customer system. In our next post, we’ll discuss a few attributes of an effective VOC process.