What is the Voice of the Customer?

Voice of the Customer (VoC) is a methodology for understanding a customers’ needs, requirements, and perceptions of your company, product, and brand. VoC is a closed-loop process that includes capturing feedback, acting on it, and communicating back to your customers. Definitely not complicated, right?

A VoC program captures customer feedback across the entire customer journey and from all channels, whether it’s the first interaction with a sales representative, marketing, the purchase process and onboarding, or the product experience itself. The goal is to understand both strengths and weaknesses in the customer experience, so that you can use that information to improve across all parts of your business. By implementing a VoC program, companies not only form closer relationships with customers but also become better at cross-functional collaboration between internal teams.

Why a Strong VoC Program is Important

Successful companies will do everything they can to ensure that customers have a positive experience which, again, spans every aspect of their interactions with your company. Companies that don’t do this well will lose customers to those that do. A clear and painful symptom of unhappy customers is high churn, which is incredibly costly to a business. Conversely, those that excel at continuously improving the customer experience will have low churn and customers who serve as advocates, helping to amplify your message and refer new customers. In fact, an Aberdeen study found that companies that leverage best-in-class VoC programs experienced 55% higher customer retention and a 24% decrease in customer service costs.

How a VoC Program Impacts Customer Success

Customer Success (CS) is all about ensuring customers reach their desired outcomes using your product. A Customer Success strategy lays out the definition of success for your customers and how you’ll help them achieve that success. Feedback from your VoC strategy is used to directly define and understand exactly what success looks like for your customers. It helps ensure that the right resources are being delivered to your customers at the right time to get the most value from using your product.

A strong VoC strategy also helps enhance your team of Customer Success Managers, whose main goal is to provide support for customers as they transition from the sales pipeline (prospects) to the support pipeline (active users). CSMs are typically responsible for maintaining customer loyalty, upselling existing customers to new features within the product, fostering long-term relationships with their customers, and ensuring that their customers are achieving the goals they were looking to achieve when purchasing your product.

Feedback from VoC programs helps CSM answer essential business questions: How easy is the product to use? What value are customers perceiving? What does success mean to customers? How is the product helping customers achieve their success?

The reason CSM roles are growing so rapidly within the SaaS space is simple; engaged, happier customers lead to less churn and lifetime customer loyalty. Creating a strong VoC strategy that CS team can leverage improves a customer’s experience and ensure their success in the product pays off in the long run.

So how do you actually create a VoC program for your team to leverage?

Basics of a VoC Program

There are three main steps you have to take in order to create a functioning VoC program. First, you have to collect customer feedback. Second, you have to analyze that feedback to uncover customer trends, needs, and expectations. Then finally, you have to take action regarding the feedback you have uncovered to implement change. Let’s go into more detail below.

Collect Feedback

Collecting high quality user feedback is the basis for any good VoC program. The key is to target the right customers, with the right questions, at the right time.

VoC feedback comes from many different sources and in many different forms. Broadly speaking, there are two types of feedback, proactive and reactive. Proactive feedback includes all of the feedback that you solicit from your customers. Examples of proactive feedback include focus groups, interviews and surveys. Reactive feedback is feedback that comes unsolicited from your customers. Examples of this type of feedback include live chat, email, and social media.

Collecting feedback is particularly impactful if you can target specific types of users. Understanding your entire customer base is great, but understanding key segments of your users allows you to extract contextual information from the users that are similar in the ways that matter to you. One way we recommend segmenting users is based on type and usage pattern. Type can refer to degree of engagement, lifecycle stage, or even subscription tier; think customer advisory board or power users. Usage pattern on the other hand, tends to be focused on interactions with a specific functionality set, so these are often more ad hoc groups.

Creating cohorts allows you to target users who are going to give you the most meaningful feedback and give you the opportunity to build a closer culture of collaboration. The goal is to offer customers easy avenues to provide feedback using different customer experience metrics.

The type of questions you ask also matters. If you proactively reach out to customers to gauge their input on feature functionality, make sure the questions are simple to answer and are items you are willing to take the initiative to answer. AKA don’t ask if customers would like a certain set of functionality that you aren’t actively interested and willing to build out for them.

For more info on feedback collection for VoC, check out our blog here.

Analyze

Once you’ve collected and organized your customer’s feedback, it’s important to validate the information before making business decision. The goal is to identify the most pervasive user needs impacting the customer experience so you have actionable insights to prioritize. Insights includes information that you didn’t previously know or information that contradicts a previously held belief. You want this information to be actionable in the sense that you’ve identified key areas that can be changed and improved.

For example, discovering that average NPS dropped 10 points in the last month may be new information but it’s not very insightful or actionable. It will take more time and energy to determine the exact reasoning behind the decrease and isn’t likely to be a high priority. However, prospective customers commenting that a competitor has better feature functionality is both insightful and actionable. This is the reason sampling the right customers with the right questions is so important.

Implement

There are a number of areas within a company that a VoC program can have impact on business activities. In terms of customer experience, you could understand and improve how satisfied your consumers are at different touchpoints along the customer journey. You could also gain new product ideas for development, realize it’s time to retire certain functionality, or get insight into price sensitivity.

The point is that it’s not enough to just collect customer feedback, you really have to let customers know that you’ve listened to their voices and made the changes they requested. It’s important to continuously close the loop with customers by automatically communicating progress and improvements back to individual them as their needs are addressed.

Conclusion

If you wish to identify weak points or opportunities for improvement in your customers’ experience, use Voice of the Customer. Begin by collecting customer feedback using the methodologies covered above. Then, analyze the feedback to identify the most significant opportunities for improvement. These opportunities should then be prioritized into projects that are executed by the relevant team, whether marketing, sales, customer success, customer support, or product.

Parlor’s User Relationship Management (URM) platform is all about aligning teams around customer-centric data and priorities. We help frontline Customer Success teams better understand their customers and make data-driven decisions at the user level, instead of the account level. Contact us today to learn more about our URM platform and how it can help you take your VoC program to the next level.