What does Voice of the Customer Mean in Retail?

February 22nd, 2021

Success with the voice of the customer in retail boils down to listening, analyzing, and taking action on what the voice is telling you. Here's how to go about it.

For a few years now, you’ve heard the term “Voice of the customer”. Just googling it throws up plenty of sponsored ads, promising you all sorts of “data-driven” and “one-stop-shop solutions” to help you capture it. Hmm.. sounds like something you should pay mind to, huh?

But let’s back up a bit. What is the voice of the customer? Why is it so popular? And more importantly, why is everyone struggling to figure it out?

Businesses that listen to their customer create happy customers. Happy customers create healthy businesses.

So what do healthy, successful businesses do right regarding the Voice of the Customer?

Listening - Getting precise information

There’s plenty of data out there, but data without purpose is just noise. A retailer that listens to the voice of the customer knows how to go beyond the noise.

Answering the following questions will get you on the right track.

How satisfied are my customers compared to the competition?

It’s great if your customers are satisfied, but what if the people across the street are doing it better? No matter how good you are, if your competition is better, your customers will go to them. This is why you need to understand how satisfied your customers are, as well as those going to your competitors.

You can gather this data in a few ways. If you run a face-to-face operation, you could have your staff ask customers directly “Why’d you visit us and not the other guy?” You could also distribute a small survey asking the question “Why are we better than the competition?”.

You could also check niche publications for customer satisfaction success stories. What did they do right? What sort of results did they get?

As anonymous said: “Smart people create, but geniuses steal.”

Related: Multi-channel feedback with the OMBEA Anywhere module

To what degree are all my departments satisfying clients?

As a small retailer, it’s easy to keep track of the different parts of your business as everything’s “under one roof”, so to speak. For larger companies with multiple departments, it can happen that some are better at customer satisfaction than others.

Understanding the underlying causes of CX success or failure in specific departments is critical. While a well-functioning department can sustain other parts of your operation, a straggler may drag down your business like an anchor to a ship.

Answering this question is particularly important in the retail sector due to the natural variability of the industry. Whether it’s online or offline, modern retail hinges upon the interaction between staff and customers. Human interactions are complicated, and many things can go right — or wrong.

Companies that do VOC right, understand what their star departments are doing right, and what the stragglers are doing wrong. They take active steps to reduce the variability in person-to-person interactions, training their staff to create mind-blowing customer interactions.

Do I understand my customers’ needs?

Gathering information on customer satisfaction and understanding how different departments perform is great. But do you truly understand what your customers need? Do you know them well enough to anticipate changing consumption patterns?

I don’t need to tell you that your customers aren’t going to buy if what you’re selling isn’t what they want. You might’ve had the best chat with a customer that walked into your store, but they’re not going to buy if they don’t need to. This also extends to online retail, where you can have the most traffic to your site, but if less than 1% converts, then you know you have a problem.

Companies that do VOC right, constantly ask their customers what their needs are, and shape their offering accordingly.

At what point does customer satisfaction affect my bottom line?

You’re not running a charity. Money’s gotta come in somehow, and you’re expected to make magic with the few resources that you have. The same way you calculate the ROI of buying inventory or office space, you should also examine the ROI of better CX.

Companies that understand the voice of the customer, understand the exact dollar amount that happy customers bring — and dissatisfied customers cost. They actively weigh the pros and cons of specific CX actions, create measurable strategies, and subject them to periodical review.

Analyzing what the voice of the customer is saying

So you’ve gathered information about your customers. You know what your customers want, and how you and the competition are measuring up. You’re also clear on how your entire company is performing, and know the exact ROI of your CX actions.

In what format is the information useful?

Every business is different. There isn’t a one-size-fits-all metric or chart that’ll best communicate the customer information you’ve gathered. One way to figure this out is by asking yourself, “What do I need to understand right now?”

For example, you want to understand how your staff is creating positive experiences for your customers. If you’re a small shop, you can have a smiley-faced terminal asking the question, “How did the staff treat you today?”. Then, you’ll see a daily breakdown of Happy/Neutral/Sad faces per employee.

If you run a larger operation, you might need something more complex. According to your internal BI metrics, you’ve determined that bathroom cleanliness significantly affects customer satisfaction. You can use online surveys or smiley terminals to gather a Net Promoter Score for your bathroom facilities. With this information, you can determine whether or not your cleaning provider is worth keeping — or whether it’s time to look for someone else.

Successful VOC companies understand the following: Choosing the right format to present the information has to do with what you want to understand, and what sort of decisions need to be made with this information.

Who needs the information?

Equally important in analyzing the information is who needs to do it. If you’re running a smaller operation, perhaps you don’t need to designate a specific individual to do this. It can be more of a collaborative effort where everyone is equally in charge of listening to the voice of the customer.

At larger enterprises, it is essential to share this information with the designated decision-makers. Thus, the information should be structured around what these decision-makers need to understand, and what sort of decisions they need to make. Failure to do so risks that the information is placed in a backlog, where no action is ever taken on it.

Organizations with a successful voice of the customer programs allocate specific workgroups to these programs and understand that information must be presented in a clear and actionable way.

Acting on the voice of the customer

Now you understand how to gather the right information and analyze it in a relevant way. How can you implement it? What are the potential hazards that create analysis paralysis?

What sorts of specific actions count as “implementing”? It can be something as simple as instructing your staff to smile while greeting and saying goodbye to a customer. It can also be extending the warranty period from 6 months to 8 months. Perhaps you’ve decided that new products need to be launched or prices need to be slashed, but the lesson here is that actions don’t always need to be large-scale.

Today’s top-performing organizations are not magical. Their leaders are not geniuses with infinite resources and plain dumb luck. Today’s successful organizations have implemented the three basic structures of capturing, analyzing, and acting on the voice of the customer.

How will you start engaging with the voice of the customer?

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