Voice of the customer (VOC) is the engine that drives customer loyalty strategies such as Net Promoter®. But, it's more than just identifying who loves you and who hates you and ranking them accordingly. It's about finding out why customers feel and react the way they do. This intelligence allows companies to improve the customer experience, create more relevant and successful products, and build loyalty.
Despite its benefits, many companies aren't capitalizing on VOC. A recent CMO Council Report (Giving Customer Voice More Volume) of nearly 500 senior marketers around the world found that only 25 percent have adopted a formal program. On the other hand, 58 percent indicated they have changed the way they track or analyze the customer experience over the last few years. The main modification companies have made is better analysis and integration of customer data.
Finding Top Loyalty Drivers
The key to better analytics is the ability to unearth the loyalty drivers that will have the greatest impact on business performance. This not only means gaining "quick wins" with one customer at a time, but also structural improvements that have significant, long-term influence on customer loyalty. There are several approaches to identify these areas for improvement, some are listed below.
The key to better analytics is the ability to unearth the loyalty drivers that will have the greatest impact on business performance.
Today's technology makes collecting, analyzing and disseminating customer comments easier and faster. These systems are able to aggregate and categorize customers' open-ended ideas, issues and comments by frequency. But comment analysis by frequency alone is not the strongest indication of customer loyalty drivers.
Another technique that captures customer top-of-mind ideas is Idea Ranking. Several companies are using this in their online communities with features that allow visitors to post a suggestion and click to vote on what others have submitted. But, there are potential traps with popularity ranking. For one, there's an inherent bias to go along with the crowd. And, like categorization by frequency, what's popular doesn't necessarily equate to what's most important to the customer and his/her loyalty.
An innovative approach designed to discover root cause of loyalty and prioritize opportunities is what we call Adaptive Conversation®, a Darwinian process that works in sequence to identify and/or validate not just the most frequent and popular ideas, but also the ones that are most important to loyalty behaviors (i.e. purchases and referrals).
What's Cooking?
Take for example a cookware manufacturer looking to launch a new line of pots and pans. Customers may select offering them in new colors as the most frequent as well as top ranked popular idea. But does that mean it is an important factor in the customer's purchasing decision?
Adaptive Conversation begins with profiling questions to facilitate customer segmentation and a "Focal Question" that allows participants to select ideas "seeded" by the brand and contribute their own ideas. Once this is completed, respondents are then asked to vote on the most frequently mentioned ideas, which are rotated for each visitor to reduce bias. The most popular ones rise to the top of the list, and the unpopular ones go into extinction.
Using the cookware example, the Focal Question would ask customers to select which new features they would like. The majority of them selected new colors, clear tops and lighter weight from among the seeded ideas, but many of them also added ergonomic handles. When they ranked the three ideas by popularity, color ranked first, followed closely by ergonomic handles with lighter weight a distant third.
Customers are then asked to rank order their favorite ideas in terms of how likely they are to purchase the products with given features. Ideas are netted together and prioritized. The results of this process enable brands to assess ideas based on BOTH popularity and importance. From the profile data, you can dig deeper by prioritizing the ideas based on customer segmentation (e.g. lifetime value, geography, promoters and detractors, etc.).
In the cookware example, the company discovers that ergonomic handles is both a popular and important idea among the masses and thus, becomes a top priority of the company. Colors, a popular idea but not as important as others, becomes a lower priority. By virtue of the Adaptive Conversation, the cookware manufacturer makes the decision to launch its new line of products with ergonomic handles versus new colors.
Integration and Alignment
To fully integrate and align the organization around the customer, organizations often involve employees to help clarify the root cause of customer issues and design solutions. By engaging frontline employees, the company is able to gain relevant insight from the very folks that affect the customer experience. In addition, it brings a sense of ownership that increases the likelihood of organizational buy-in and adoption of changes.
The process of an employee Adaptive Conversation is the same as with customers. Employees are asked to share ideas and comments and prioritize them based on popularity and importance. For example, call center employees may be asked to share their insight on ways to improve support. At the end of the idea process, employees may help identify issues in specific policies or training requirements as a result of analysis of popularity and importance.
Understanding the customer experience and areas for improvement from both the customer and employee perspective is key to increasing customer loyalty. While many companies understand this concept, finding a way to easily and effectively identify root cause of dissatisfaction and prioritize action is a challenge. As companies look for ways to improve the customer experience and respond to the voice of the customer, they will benefit from a comprehensive analysis of the root cause of customer loyalty that includes Adaptive Conversation to prioritize actions. By identifying root cause and closing the loop with customers, companies can greatly improve the customer experience, resulting in improved retention, repurchase and referrals.