The Voice of the Customer is getting louder!
We live in a customer-centric world.
Companies need to listen to and engage with customers as never before
Businesses that focus on the customer relentlessly are more likely to survive in this harsh climate rather than those that purely focus on their internal operations.
Whenever I talk with clients and customers or even just associates and colleagues, I often hear stories about poor customer service. And, almost without exception, their view is that the company concerns themselves more with the internal politics and ‘reduce costs as much as possible’ – often at the compromise of the customer. Testament to this viewpoint is a recent experience I had with a purchase.
I bought a new printer – for home use – and after a few weeks, it would not print correctly (despite following the cleaning instructions). After several attempts to [unsuccessfully] contact the supplier, I wrote an e-mail to them. This was on 12th September 2012. I received a reply – via e-mail – on 10th January 2013! When I replied to the e-mail advising them of when I sent the e-mail and why it took so long to reply I received a reply stating that they didn’t realise it was that long ago. No apology (which if you have to say sorry to a customer then it is too late) was mentioned. Needless to say, I won’t be using their products again.
World class innovators possess a relentless focus on growth; continually transition their revenue source; and solve customers’ problems – before the customer even knows it’s a problem.
“Innovation moves from more than just new product or service development,
to process, structure, capability and speed”
The fact is, we now live in a time in which we have to build new relationships with customers, because everything about the customer relationship has changed. With the increasing trend in the use of social networks with feedback and commentary on interactions with a company, customers have more access to comment on their customer experience – and it is not always complimentary. They can render a brand new product instantly obsolete if it doesn’t match their expectations – as witnessed with tablets from both Blackberry and HP.
It is no longer acceptable for the customer to ‘think’ they are getting value – they need to be sure. So, involving your customers in your endeavours will pay huge rewards in the long run. The Voice of the Customer truly is the most vital ingredient in business development and performance – are you listening?
In a recent PEX Network survey of many business sectors including; manufacturing, financial services, healthcare, government, distribution there were several key points noted:
- Process professionals still favour the “Voice of the Business” when identifying and prioritising process improvement projects but to a lesser degree than in a similar 2009 survey
- Over 30% of companies reported themselves to be “ineffective” or “highly ineffective” at using and acting on Voice of the Customer data
- Organisations are their own worst enemy: data not being shared internally was cited as the biggest overall barrier to developing an effective VOC programme (21.8% of respondents said it was the primary barrier while nearly 60% of respondents said it was one of the top three)
- Customer complaints is a widely-used method for gathering Voice of the Customer feedback but those companies that rated themselves “effective” or “highly effective” used it less often to evaluate and prioritise process improvement projects than those organisations that consider themselves “ineffective” or “highly ineffective”
- Creating a data-driven, problem solving culture in the wider business was seen as a key enabler to being able to better evaluate and respond to customer feedback in a proactive and constructive way
Even though efficiency came out as the top driver for process excellence, for those companies where improving customer satisfaction was a stated aim, process improvement efforts were more likely to be rated as successful or highly successful.
The trouble is that it’s one thing to be focussed on improving customer satisfaction and it’s another to actually do it well.
Put simply, listening to the Voice of the Customer (VOC) means understanding your customers and aligning your business services and products to serve them better. It means you have a way of observing and understanding both spoken and unspoken customer needs – not just assuming that you know what they want.
There are a number of proven methods and way of doing this. Some are simply methodical – such as Six Sigma’s emphasis on understanding “Critical to Quality” (CTQ) metrics or Lean’s emphasis on removing non-value added activity defined as anything that customers would not be willing to pay for. These proven process improvement techniques offer practical tools that organisations can use to hone their business operations and improve value both for customers and for shareholders.
“Over 30% of companies were reportedly “ineffective”
or “highly ineffective” at using Voice of the Customer”
As organisations reel from on-going uncertainty, the margin for error is getting slimmer. That means that truly knowing and understanding what your customers want can no longer be a “shot in the dark” – true insight is now business critical.
“We are only in business because of the customer and I think that some businesses are losing customers as they streamline their processes for the bottom line without regard to actually supplying the customer with what they want” observed a leader at a Boeing Company.
“The trick is balancing customer, shareholder and employee needs” he says “It’s not just about satisfying the customer at all costs; it’s how do you take care of the customer in a profitable way? Sometimes those things easily line up and sometimes there are difficult choices on either end” commented a SVP.
The truth? You can’t handle the truth!
The greatest challenge cited by a majority of respondents in the survey was a decidedly human factor: “data not shared effectively between internal teams” was both the top primary barrier (21.8%) as well as the biggest overall concern when all three weightings were considered.
“58.3% of respondents cited data not shared effectively between internal
teams as one of the top 3 barriers to collecting and using Voice of the Customer”
The second most common barrier to effective use of VOC was the difficulty of linking customer feedback to specific processes for improvement (19.3% cited it as the primary barrier and 51.3% overall). Some of the specific challenges around linking feedback with process improvement were first knowing what to do with it – i.e. “what is this telling us?” or “how do we fix this?” – and then actually implementing a solution.
“If your VOC system is to have any credibility, it must provide clear direction for competitive marketing strategies, and it should direct specific improvements in people, products/services, and processes in order to deliver superior value. Of course, no-one wants to take action based on data that is not demonstrably predictive of business performance.”
Other challenges cited by survey respondents included:
- An organisational culture that had a tendency towards more reactive rather that proactive action – “We fire-fight rather than anticipate”
- Not getting to the “root cause” of an issue – “difficulty finding true reason, rather than reasoned voice”
- Lack of structure on a round capturing different forms of VOC – “We struggle with even identifying who are customers are. When we do, VOC is ad hoc and often reactive”
- Staff lack training in root cause analysis – inability to get to the systemic causes of customer complaints
- Lack of management buy in and unwillingness to commit resources to gathering and acting upon VOC – “Management just doesn’t get it!”
When conducting VOC you need to be very clear about what you want to know, and carefully construct your questions and methods in order to answer those questions. Once you get reactive data, then we can get clearer about the questions and hone in on unbiased requests to get data back and feedback.
“If your process takes too long or is too cumbersome,
customers will stop complaining and just walk away”
One of the key dangers with relying on customer complaints for feedback is that it gives you a skewed sense of reality. If you only go after complaints you become more and more insular. Most of your customers will go elsewhere if they are unsatisfied with your products and services. If we want to look after where the market is going then and not where it’s been we need to look beyond just complaints.
In the survey, nearly 70% of companies without any formal process improvement program for instance, rated themselves as “highly ineffective” at translating customer feedback/sentiment into action with only a little over 30% of companies who have undertaken process improvement activities for one or more years reporting their VOC program to be “highly ineffective.”
#1: Evaluate your processes from the customer’s point of view
A 2012 Customer Management IG survey of customer management executives identified that fixing broken processes is the most pressing business issue – with over 60% of customer executives citing this as their top priority
“Over 60% of customer executives cited fixing
broken processes as their most pressing business issue”
Look at your business processes from the perspective of customers in order to understand key “touch points” (i.e. the places where a customer interacts with your company such as a retail outlet, on your website, via e-mail, by telephone, etc.) and how your processes affect their experience.
#2: Encourage a culture of experimentation
Many companies cite the difficulties of linking VOC back to specific processes for improvement. They can identify the problems – they just don’t know the solutions. This is where the tried and tested scientific method comes in. Evaluate the data, come up with a hypothesis and then design an experiment to test your assumptions. If it works, continue with the solution. If it doesn’t, try something else.
PDCA – Plan, Do, Check, Act – is a very effective way of identifying and implementing solutions. The simple, but very effective methodology will generate significant courses of action towards solutions.
#3: Create cross functional teams and train them in basic process improvement tools
All of the discrete functions that your business provides – accounting, marketing, supply chain management, IT management, manufacturing, sales, customer support – serve the customer in some way or another, either directly or indirectly (by supporting those that do serve the customer directly). Put another way, the only reason that anyone in your organisation has a job is because they are needed to help produce a product or service that is ultimately for the customer.
The process of collecting, evaluating and acting on VOC needs to involve representatives from different business units. It cannot be the sole preserve of an isolated group (such as a process improvement group) coming up with solutions and then imposing them on the business. Customer process problems likely cut across departments and you want to ensure that plugging a hole in one area doesn’t end up creating new problems in another part of the business. As with all process improvement work, this is good practise anyway, but it’s all the more important when trying to come up with solutions to multi-faceted problems that impact the customer.
#4: Senior leadership needs to encourage a data-driven, problem solving culture
Company leadership has an important role to play in creating the right conditions for customer-focussed and proactive problem solving organisations. Leadership’s first response to problem should be “we’ve got problems, how can we solve them?” and not, “we’ve got problems, who’s to blame?”
Interestingly, process improvement programs that are “top down” (i.e. driven and supported by senior leadership) rather than either the “bottom up” or “middle out” were much more likely to be associated with “highly effective” VOC programs (see above chart). This could be an indication that leadership understands the importance of making decisions based on data and believes in process improvement as a means to action.
It can take time to change the perspective of both companies and individuals who are not used to problem solving techniques and data analysis. The problem with numbers and data, for instance, is that they are “open to interpretation” depending on an individual’s own understanding, training and inherent biases.
“Management just doesn’t get it!”
When we first start working with new business leaders, process owners, and teams who don’t have a problem solving mentality, who don’t think in a PDCA type of fashion, there’s a natural defensive there that says “let’s not let the facts get in the way of applying judgement.” It takes time but you have to work through that with them until the lens through which they view things are different, then the conversations are easier so that the obvious becomes obvious to them.
The Voice of the Customer is getting louder – we need to listen!
courtesy of PEX Network
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Dembridge provides expertise in VOC methods and execution as part of process improvement methodologies incorporating Lean and Six Sigma.