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Get the Most from your Voice of Customer Data

http://data-informed.com/get-most-from-your-voice-of-customer-data/

Voice of Customer (VoC) is the in-depth process of capturing a customer’s expectations, preferences and aversions. It plays a huge role in ensuring an optimum customer experience. As Steve Cannon, CEO of Mercedes-Benz USA, said recently, “Customer experience is the new marketing.” So if that’s the case, it’s important that companies get as much out of their data as they can.

It is accepted, if not obvious, that customer experience has a direct impact on financial performance. Customers who had the best past experiences spend 140 percent more compared with those who had the poorest past experience. And when it comes to customer churn, a customer who rates as having the poorest experience has only a 43 percent chance of being a customer a year later, whereas a satisfied customer would have a 74 percent chance of remaining a customer for another year.

In the UK, a relatively sophisticated market, variability in churn rates in telecoms/media range to 15 percent annually (Virgin 14.9 percent and Sky 10.1 percent) and utilities are higher (British Gas was 11 percent against an industry average of 20 percent). If Virgin, for example, were just able to obtain the same churn as Sky, this would add another £200m of sales annually.

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For a $10 billion company, even a modest shift in customer experience could result in the following annual revenue change: buying more products, $64 million; reduction in churn, $116 million; word of mouth, $103 million.

Net Promoter Scores (NPS) is one popular framework involving VoC and seeking to quantify the dramatic effect that customer experience has on revenue and profits. For each American Express promoter (those that score 9-10 in satisfaction surveys), they see a 10-15 percent increase in spending and four to five times increased retention, both of which drive shareholder value. iiNet said that a 1-point increase in its NPS equaled a $1.6 million increase in net profit after tax. Whereas Heineken NPS promoters spend 2.5 times more than detractors (those scoring their customer experience from 0-6 out of 10).

So with all this impact, it’s unsurprising that Gartner forecast VoC programs to be one of the most significant strategic investments over the next five years. “VoC is now being viewed as a must-have strategy. What businesses would really like is a nice out-of-the-box mature market that they can go and pick the technology from. But it is not there,” said Gartner Research Director Jim Davies.

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But, invariably, organizations are not performing their VoC analyses effectively. Several specific challenges are behind this problem.

For one thing, VoC data, such as social media, product reviews, and complaints, can be sporadic and incidental. Even in systematically collected data, such as CRM data and surveys, there are challenges to interpret the “unknown unknown” signals unless they are predefined.

There are also big differences among business sectors. In B2B, and in B2C services such as utilities, you might have detailed CRM records. But in some markets with minimal customer touchpoints, like consumer products, it might be difficult to link the different sources to a particular customer.

In addition, data can be dirty, and this doesn’t just refer to duplicate or typos. Based on a recent analysis of social media data by Networked Insights, nearly 10 percent of the data from social media posts that brands analyze is not coming from real consumers. These posts come from sources such as social bots (scripts or programs that behave like people posting on social media), celebrities, brand handles, and inactive accounts. Spam is a major concern with forums, which report that up to 28 percent of all posts are from non-consumers. Social spam is a complicated problem when listening in on brand conversations; social media spamming grew by 658 percent between 2013 and 2014, and some brands have reported that more than 90 percent of their recorded social media posts can be classified as spam.;

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