Wednesday, April 28, 2010

Are you listening to the voice of the customer?

Only the customer can define quality. This fundamental law of business illustrates why it’s so important to understand the collective needs, wants, and expectations of our customers. This is what is meant by the term, voice of customer (VOC). Our goal is to create a shared understanding with customers so we can consistently deliver products that conform to requirements. VOC should be treated as a program that integrates customer input into all aspects of the business. To help visualize this, I’ve developed the VOC Pyramid, which outlines the various levels of customer feedback.

The highest level of VOC is the customers’ assessment of the overall business relationship. This is also referred to as customer satisfaction or loyalty. Relationship feedback is typically gathered once or twice a year via a standardized survey. Most VOC programs start here for two simple reasons. First, this data is often the easiest and most inexpensive to gather. Second, this is one of the most critical aspects of feedback since it relates directly to a customer’s willingness to repurchase from you. The most popular indices / survey formats include: Net Promoter Score, Forrester CxPi, CSAT, ACSI, Apostle Loyalty Index, Customer Advocacy Score, and JD Power PC Ratings.

Products and Processes
The second level of the pyramid centers on requirements research. If we define a “customer” as any recipient of a good, service, or work process (internal or external), then it only makes sense that we solicit their input when designing products and processes. Common data gathering methods include: interviews, focus groups, historical queries, competitive intelligence, benchmarking, consumer reports, market research, ethnographic studies, and customer surveys. By fully integrating customer input into the product / process development lifecycle, we achieve a state of “co-creation”. This ensures that product specs, service levels, and quality metrics are perfectly synchronized with customer requirements.

Customer Experience
The third level of the pyramid focuses on transaction-based feedback. Every time we interact with a customer, we create an impression. If we make the effort, these impressions can be recorded, quantified, and tracked. We’ve all received a follow-up email or call, asking us to rate the quality of a recent transaction. This is exactly what we mean by customer experience feedback. The first step in building this into your VOC program is to identify which customer interactions should be measured. The usual suspects include: sales experience, onboarding, product usage, service delivery, and problem resolution. Once you’ve determined the collection methods, be sure to build clear processes for responding to customer input. This applies to all levels of the pyramid; there is really no point in gathering feedback unless you’re prepared to take action.

Ubiquitous VOC
The bottom level of the pyramid is what I call ubiquitous VOC. This can be the most challenging feedback to gather and classify because it is typically unsolicited and unstructured. Customer “opinion” regarding your company and products is continually getting shared in a variety of mediums: customers complain to your employees; they post messages online; they email ideas for product improvement; they talk to others about how you treat them, etc. To understand and react to all these touch-points, we must build robust communication channels for customers and employees. The explosion of online mediums, web tools, and social media sites can make this easier than ever before, if we’re willing to get creative.

In conclusion, a holistic VOC program is an essential component of your quality system. By engaging the customer at various levels, we ensure that their requirements get met. It also helps us access the “hidden” needs of the customer. The reality is that customers are sometimes either unaware or unable to articulate a true need. These unexpressed needs, if met, have the potential to create tremendous value for both you and your customer. This is the real power of VOC, because it often provides insight into what become history’s greatest innovations!

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