How to improve your return on investment in platforms like Medallia, Qualtrics and Clarabridge

By Steve Offsey

Most organizations that have implemented a voice of customer program are happily collecting and analyzing multiple forms of customer feedback. But after an initial burst of excitement from obtaining real customer feedback, your CEO wants to know what’s driving the low scores and negative responses. More importantly, she wants to know how your CX team will improve them. And before even considering your request for increased resources, your CFO wants you to show the ROI of your customer experience initiatives.

In this post, I’ll explain how you can raise your voice of customer program to the next level by providing seven powerful ways to supercharge it and make it actionable, so you can maximize the ROI of your VoC investments.

How Mature is Your Voice of Customer Program?

“Any approach to listening to the customer voice is better than not listening to it.”
Torsten Fritz, Research Director, KPMG

While the merits of a voice of the customer program are well known, many companies struggle with how to make their VoC programs actionable. Organizations often encounter roadblocks and lack the knowledge and tools to take the next step.

Voice of Customer Program Maturity

A survey by The Temkin Group confirmed that more than three quarters of voice of customer programs are simply capturing and analyzing VoC data in isolation. The end result is the creation of yet another customer data silo that’s far from actionable.

Moreover, the survey revealed that only 1% of companies are at the highest level of maturity. These transformers have voice of customer programs that link customer insight data into operational activities and strategic decision making. Their VoC programs help teams throughout the company change how they operate to take advantage of insights obtained from customer feedback.

Why Do So Many Voice of Customer Programs Fail to Improve Customer Experience?

In the most recent US Customer Experience Index report, Forrester revealed that the overall quality of the US customer experience rose by an anemic 0.4 points. Despite the almost universal adoption of voice of the customer programs, most industry front-runners were repeats and nearly all of their scores either stagnated or decayed. Here are two reasons why:

1. Have You Surveyed Your Customers Today?

One contributing factor is that in most organizations the VoC team’s primary role is simply to execute customer feedback surveys. In fact, the customer feedback management (CFM) solutions employed by most enterprises to manage their voice of the customer programs are survey engines at their core.

These systems have long focused on helping VoC teams gather and report on post-interaction surveys. But, the most popular use of voice of customer feedback tools is simply to manage and track Net Promoter Scores® (NPS®).

For an overview of NPS and other CX Metrics see Measuring Customer Experience Beyond NPS

While some CFMs are starting to extend into social media listening and even incorporate other data sources for analysis, they are fundamentally repositories of relatively static information. So, it’s no surprise that just 24% of large companies believe that they can use VoC insights to make changes to their business, according to the Temkin Group.

An exceptional voice of customer program yields more than a number

Leading companies have moved beyond these basic use cases. The most advanced CFM platforms now contain text analytics capabilities or integrate with third-party solutions. CX teams typically use these to identify and study recurring feedback themes. For example, they can reveal whether your company is receiving frequent comments from customers on a given topic such as “products,” “services,” or “pricing” by scanning comments for relevant keywords. They can also be used to identify unhappy customers for special treatment and determine current customer “hot buttons.”

These solutions can spur action by helping VoC teams identify and understand customer experiences that generate overly positive or negative customer sentiment. Specific patterns of keywords can trigger alerts and lead to follow-up on customer concerns. CX leaders can then follow up with the frontline representative or team on interactions that may have caused alerts.

2. A Traditional Segmentation Approach Isn’t the Cure for Your Voice of Customer Program

The most obvious approach for analyzing VoC data is to segment it. In an article on How to Improve Customer Experience through NPS Segmentation, Sue Duris provides a basic approach for VoC segmentation:

  1. Segment customers into three main classes: promoters, passives and detractors
  2. Segment customers within each class in a variety of ways, for example by:
    • Answers provided to follow up questions
    • Company size–for instance, startup, small-to-medium size businesses, or enterprise
    • Location
    • Sector the business operates in (financial, tech, retail, etc.)
    • Product/service
    • Pricing plan
    • Revenue amount
    • Account age
    • Customer persona
    • Profile info such as role within the company
    • Point the customer is at in the customer lifecycle
    • Different channels the customer uses
    • User activity
    • Frequency of service calls
    • Customer feedback
  3. Determine the most valuable segments in each class—though she doesn’t explain how
  4. Determine marketing, sales and service strategies to improve loyalty and overall customer experience

While a traditional segmentation approach will initially provide valuable insights, it soon runs out of steam. Unfortunately, the voice of customer program at most companies stalls at this stage. CX professionals find themselves in the frustrating position of knowing that their VoC efforts remain tactical, reactive, and transaction-based. They often find that the voice of customer program they have in place is not enough to really understand what is driving customer experience, so they can design and implement programs to improve it.

If you want to elevate your voice of customer program beyond periodic NPS measurement, sentiment analysis and individual customer interaction analysis and follow-up you must approach VoC in a new way.

Free eBook: Essential Guide to Effective Voice of the Customer Analysis

7 Powerful Ways to Make Your Voice of Customer Program Actionable

Once your organization has completed several analyses of your VoC data, the pressure to show improvement and justify continued (or hopefully increased) investment will ratchet up. Here are seven steps to take to take your voice of customer program to the next level:

1.  Analyze Customer Feedback Within the Context of Each Customer’s Journey

Strengthened performance on customer journeys has been shown to correlate with increases in customer satisfaction and key organizational metrics such as revenue increase and churn reduction. No wonder leading companies are striving to take a journey-based approach to improve CX.

The first step to make your VoC program more actionable is to view your voice of customer data through a journey-based lens. This will reveal deep and actionable customer insights that will help you better understand and improve customer experience.

To illustrate the difference, I’ll use NPS measurement as an example. VoC platforms calculate and report aggregate NPS without understanding where it was captured for each customer within the context of their unique journey.

At this moment, you may be thinking, “Wait a minute, what about Transactional NPS?”

Transactional NPS is a specific form of NPS that is meant to determine your customer’s opinion on a certain business transaction, such as placing an order online. Instead of asking the customer how likely they are to recommend your business in general, you ask them to rate your company “based on their most recent purchase or order.”

But Transactional NPS only provides you with information after a particular transaction, rather than within the context of a more complex, end-to-end customer journey. It doesn’t help you understand the impact of an interaction further back in time or predict the effect of customer behavior variations across multiple channels and segments.

Journey-based VoC Measurement

You need to know where the voice of each customer is being measured within the context of each customer’s end-to-end customer journey to truly understand it’s impact. Most CX teams make the mistake of focusing only on the last one or two customer interactions instead of looking at the entire customer journey. In reality, customer experiences and opinions accumulate over time, and trust and resentment in customer relationships build over years.

To truly understand customer feedback and make your voice of customer analysis actionable, it is essential to take a journey-based view. Customer journey analytics is a breakthrough technology that provides the power to look across millions of actual customer journeys spanning numerous touchpoints, channels and time periods.

See How to Calculate NPS More Effectively Using Journey Analytics

2.  Analyze Your Voice of Customer Data in Unison

To take a journey-based view, you first need to integrate all of your customer data. Enterprise customer data typically includes:

  • Customer Demographics
  • Web and mobile browsing activities
  • Customer preferences
  • Survey responses
  • Sentiment
  • Customer support team interactions
  • Firmographics
  • Sales team interactions
  • Social media
  • Customer service interactions (e.g. calls, IVR, chat)
  • Transaction data

Your customer data will typically reside in separate applications, such as call center platforms, point-of-sale systems, email marketing platforms, marketing automation systems, and others.

With the exponential growth in the volume and velocity of data, VoC platforms are entirely unsuitable for integrating data from all these sources in a way that is efficient and cost-effective for your business.

Also, many large enterprises have multiple CFM solutions. CFM buyers often say that despite their having an enterprise-focused solution, individual lines of business and channels within their company also have their own tools. In some cases, the tools work together through the main vendor’s data integration and ingestion capabilities—enabling a holistic view of the customer experience. In other cases, disparate tools create challenges because they inhibit the organization from getting to a holistic view.

There are a variety of tools and approaches for unifying your customer data, including data warehouses and data lakes, Customer Data Platforms (CDPs), customer analytics tools, and customer journey analytics software, to name a few.

See Customer Data Analytics: How to Select the Best Tool for Your Needs for an in-depth comparison of these and other related tools.

3.  Collect and Analyze Unstructured Customer Feedback

Today, customers provide their opinion of the brands they interact with and the experiences they have through various channels such as social media, inbound calls, online help forums and chatbots. Yet a vast majority of companies only analyze customer feedback in the form of responses to feedback surveys.

Let me illustrate with an example:

I recently visited a popular resort for a short vacation. At the end of my 3-day stay, I received an email asking if I enjoyed my stay and would recommend the hotel to my friends and family. I conveniently ignored the email.

But a few days later I posted a photo on social media in which I tagged the resort’s rooftop restaurant and while offering praise for the resort, also commented on how there were no ‘smoke free zones’ anywhere to be found in the resort.

Despite my positive comments and praise, this raises a red flag which merits a follow-up on the resort’s part. If they measure customer experience purely by the traditional Voice of Customer system measured through the NPS, they will entirely fail to take into account my experience with them. Also, my public comments carry far greater impact than my private NPS feedback.

Leading CX teams now collect unstructured customer feedback from customer emails, social media platforms, open-ended survey responses, phone call transcripts, search terms, and chat transcripts. They use text analytics to mine through unstructured feedback to find patterns and identify previously unknown customer issues.

4.  Use VoC Data to Prioritize Areas of CX Improvement

To improve customer experience, CX teams must go beyond simply reporting VoC data and insights. They link customer experience metrics like NPS to business outcomes and use them to prioritize areas for CX improvement. By taking a journey-based approach using an advanced customer journey analytics platform, your voice of customer program can provide the actionable insights that your customer experience team is looking for.

Example: A Retail Bank Uses Customer Journey Analytics Platform to Make NPS Actionable

A retail bank successfully used the Pointillist customer journey analytics platform to measure NPS for specific customer journeys, so they could identify and prioritize areas for CX improvement. Watch the video below to see how they did it.

How to Use NPS to Prioritize CX Improvements

VoC leaders focus on proving value. They model the impact of potential CX improvement projects on the customer and the business. Because CX improvements affect many different parts of the business, today’s leading VoC programs keep a pulse on the results that they drive.

5.  Identify At-risk Customers and Take Proactive Measures

Voice of Customer data can inform journey-based analyses aimed at identifying customers who are at risk of churning. Most companies erroneously focus on the last one or two customer interactions and a single VoC survey to identify customers at risk and understand the reason they churned.

But in reality, customers can have experiences that make them feel neglected or indifferent long before they end their relationship with your organization. To discover the root causes of churn and take corrective action, you need to look at the complete customer journey or you will likely the reach wrong conclusions. Using customer journey analytics, you can analyze your voice of customer data within the context of each individual’s unique journey. It enables you to visualize and discover the root causes of customer problems in real-time, based on your customers’ complete history of interactions with your business over time.

soft churn journey

This voice of customer analysis can be passed on to the right frontline customer service employees together with the complete journey information in order to take proactive measures to retain the customer.

For instance, Lego alerts store managers when customers submit unsatisfactory shopping experience feedback. Using this feedback, store managers can reach out to those customers—in some cases before they even leave the store!

6.  Empower Front-Line Customer Representatives with Real-time Information

The success of your VoC program is highly dependent on happy and engaged employees that will take action with your customers.
Comcast’s VoC team empowered its front-line employees to drive outcomes by using a range of techniques, including monthly surveys and team huddles. In the initial phase, average employee Net Promoter Score (eNPS) increased by 20 points across its call centers. Overall NPS jumped by 14 points.

Like Comcast, leading VoC teams are now raising their VoC programs to a new level. They’re using journey analytics software to arm front-line customer service representatives with the complete journey history of each customer. Advanced journey analytics platforms use machine learning and artificial intelligence to determine the ‘next best experience’ for a customer based on their unique journey.

By providing real-time information, VoC teams can empower customer representatives to take decisions that prevent customer loss, increase cross-sell and upsell and ultimately improve overall customer experience.

7.  Prove Business Impact by Demonstrating the ROI of CX

The importance of calculating the return on investment (ROI) of your voice of customer program cannot be overstated. How will you build, measure and regularly optimize your efforts if you don’t know the return on your investments? It isn’t enough to merely convey the soft benefits if you want to put your voice of customer program and other CX initiatives on a level-footing with other business programs. You need the quantitative ROI to make a strong business case and obtain approval for continued investment.

Customer Experience ROI = 100 x (Benefits – Investments) / Investments

Measuring benefits or returns is the toughest part of the ROI calculation and the reason why most CX practitioners avoid ROI calculation. It requires that you calculate the impact of customer experience changes on the hard quantitative metrics your business is measured by.

To calculate CX benefits, first choose a business metric that is a key performance indicator (KPI) for your company (e.g. revenue, churn, cost to serve). Then use customer journey analytics to show the link between these business metrics and real customer experiences. Finally, add up the cost of any customer experience investments that will be required to achieve those benefits

For a step-by-step guide on how to determine the ROI of your voice of customer program, see How to Calculate Customer Experience ROI

It’s Your Move

You’re now on the way to boosting the value of your voice of customer program. By taking a journey-based approach, you’ll be able to provide your CEO with answers about what’s driving any low scores and negative responses—and how your CX team plans to improve them. And you’ll be able to justify your requests for increased resources by providing your CFO with the quantitative ROI of your VoC and other customer experience initiatives.

Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.