Successful companies place the customer at the heart of their business, and base their activities and decisions on the customer’s needs and preferences.
2. White paper | February 2013 | Voice of Customer|2
Successful companies place the customer at the heart of their
business. The Voice of your Customer is a key input for improving
business performance and developing strategies for future growth.
ValueNotes conducted a survey of senior decision-makers in Indian
and multinational companies to find out if they gather customer
feedback, how they do so, and how they use the inputs.
We found that while most companies do in fact seek customer
feedback and want to use it for critical decision-making, they are not
able to do so, as the inputs get are not actionable.
This white paper describes the key elements of a successful VoC
initiative – an appropriate design for the program; in-depth,
unbiased and objective qualitative interviews with customers, and
incisive analysis that addresses the key pain points of decision-
makers.
3. White paper | February 2013 | Voice of Customer|3
Benefits of listening to your customer
Successful companies place the customer at the heart of their business, and base their activities and decisions
on the customer’s needs and preferences.
Exhibit 1: Critical intelligence from VoC
For a company that is looking to align itself to the customers’
needs and expectations, Voice of the Customer (VoC) offers critical
intelligence. It serves as an effective tool for providing actionable
inputs for improving the overall customer experience to decision
makers across multiple functions such as sales, customer service,
marketing, product R&D, etc. An intimate understanding of the
customer is an intellectual property that can give the company a
competitive advantage.
VoC is not a new initiative and most companies are aware of the
significant gains that can be derived from it; but a lot of companies
are not able to realize the true value it can generate. Some
companies undertake VoC merely as a compliance activity, totally
missing its value and contribution to critical business decisions.
Source: ValueNotes Analysis
As indicated in Exhibit 1, regular engagement with customers enables an organization to improve its topline and
bottomline through customer retention, service/product improvements, better marketing, new product
development, identifying new opportunities, among others.
How are companies gathering customer inputs?
A survey conducted by ValueNotes found that 78% of the companies that responded, do actually have a process to
gather customer feedback. Of the remaining 22%, more than half are planning to start customer feedback
initiatives in the near future.
Exhibit 2 indicates the different methods used by companies to gather these inputs. Most companies resort to
traditional methods - over 25% are using customer satisfaction surveys.
Exhibit 2: Methodologies to gather customer feedback
We also found that in a majority of the companies, the
business development and operations departments
are largely responsible for seeking formal customer
inputs.
From our experience, we have found that business can
get better insights from their customers by using a
combination of customer satisfaction surveys,
feedback forms, inputs from sales as well as customer
analytics. But surprisingly, barely 10% of respondents
actually used all four in tandem.
Future
opportunities
Existing
efforts
Source: ValueNotes Survey Analysis
Impact of
VoC
New
business
opportuni
ties
Identify
new
customer
segments
Inputs to
product
developm
ent
Customer
retention
Improve
product/
service
delivery
Improve
marketin
g efforts
26%
21%
18%
14%
8%
6%
7%
Customer satisfaction
survey
Feedback forms
Feedback from sales and
operations
Analyzing customer
data/analytics
In-depthVoC study
Social media
Other
4. White paper | February 2013 | Voice of Customer|4
Exhibit 3: Use of in-house resources most prevalent
The customer feedback process is managed either by
people within an organization, or by third-party providers.
Some companies use a combination of both. The survey
indicates a clear preference for in-house collection of
customer feedback. About 40% of the organizations cited
in-house knowledge of products and services as the main
reason for conducting it internally.
However, those that outsource their VoC program to
independent third-party agencies identified lower cost and
deeper insights as the top two reasons for choosing this
option.
Source: ValueNotes Survey Analysis
Companies want to use customer inputs for business decisions
Exhibit 4 indicates the varying degrees of importance that respondents attach to the reasons for capturing
feedback. (The size of the word indicates relative significance.)
Exhibit 4: Reasons for seeking customer feedback
Source: ValueNotes Survey Analysis
The top two key objectives of seeking customer feedback are designing improvements in products and services
(42% respondents) and assessing customer satisfaction objectively (24%). Clearly, the focus seems to be on
enhancing the existing product/service delivery to the customers.
Additionally, respondents said that the key decisions made based on the customer feedback related to
“Improvements in product/service delivery”.
“It would be helpful if we can get specific areas to work on based on the data from research. It would be good if
these are strongly stemming out of the specific data in research.”
~ Survey Respondent
57%
32%
11%
In-house only
Combination
ThirdParty
5. White paper | February 2013 | Voice of Customer|5
Exhibit 5: Decisions based on customer feedback
Source: ValueNotes Survey Analysis
Most companies are missing the opportunity to use customer inputs to guide their future growth plans –
identifying new market opportunities, new market segments and new product ideas. For instance, a meager 2% of
the survey respondents used customer feedback to indentify new revenue streams. We feel this is clearly a lost
opportunity.
“VoC studies incorporate inputs from not just existing customers but also potential customers and competitors’
customers. They entail in-depth conversations and discussions with the customers to get to the need behind the
need and hence identify hidden business opportunities.”
~ Varsha Chitale, Director, ValueNotes
But they are not happy with what they get
Ironically, while 94% of the respondents use customer inputs for some kind of decision-making, only 26% of them
are happy with the customer feedback process in their organization.
Survey findings:
78% agreed that customer feedback contributes
to enhancing existing operations
15% respondents mentioned that customer
feedback was helping them identify new
opportunities
6% respondents mentioned that customer
feedback was not feeding into any business
decision
Survey findings:
26% indicated that they are completely satisfied with the existing process
67% indicated a need for improvement
7% said they were unhappy with the process
Of those that expressed complete satisfaction, 71% have a well-structured VoC process
All those that expressed unhappiness with the existing process, rely on very basic and traditional
methods to collect data
38%
22%
13%
10%
8%
6%
2%
Improving product and/or
servicedelivery
Assessing performanceof
sales & customer service
teams
Identifying cross sell
opportunities
Improving supply chain
management
Making effective pricing
decisions
No significant decisions
taken
Identifying new revenue
streams
6. White paper | February 2013 | Voice of Customer|6
The following infographic further breaks down the satisfaction levels by the method of capturing customer
feedback.
Exhibit 6: Satisfaction levels with existing VoC program
Source: ValueNotes Survey Analysis
Clearly, although very few of the respondent companies use third-party service providers for getting customer
inputs, the level of satisfaction is highest among them. This points to the benefits of using professional
organizations that have expertise in conducting VoC surveys.
The respondents cited many limitations of their in-house VoC program and reasons for unhappiness. Exhibit 7
indicates these in detail making it obvious that companies need more insights to make decisions.
Exhibit 7: Limitations and unhappiness with VoC
Source: ValueNotes Survey Analysis
We believe that companies are making decisions based on limited insights. When the information they receive is
irregular, without sufficient depth, and likely to be biased and inadequate, it is best termed as ‘unreliable’. This
exposes them to a great risk.
29%
29%
26%
16%
Ineffective probing
Irregularfeedback
Conflictof interest
Lackof effective
analysistools
Limitations
of in-house
VoC
program
27%
25%
25%
16%
7% Superficialresponses
Feedbacknottimely
Inadequate analysis
Inconclusive responses
Biasedresponses
Unhappiness
with collected
data
7. White paper | February 2013 | Voice of Customer|7
How to get the most out of your customer feedback initiatives
The first step in setting up and implementing an effective a program to capture customer inputs is to define the
objective of the initiative. What is the purpose of seeking customer inputs? Which functions need these inputs?
What are the actions or decisions that will be contingent on these inputs?
Once the objectives are clear, it is possible to design a questionnaire or discussion guide that will facilitate the
analysis to address them. Inputs from all the relevant stakeholders who influence the purchase decision in the
customer’s organization need to be taken. In order to gain deep insights, the person gathering the inputs must be
able to interact intelligently with the respondent and ask penetrating questions to fully understand the responses.
Finally, the respondents’ feedback is truly valuable only if it is completely honest.
The table below summarises the key elements of a successful Voice of Customer program:
Exhibit 8: VoC Best practices
Source: ValueNotes
VoC Best Practices
Key Elements WhatThey Bring to VoC Help MeetStated Challenges
1
Design
Based on analytical
and methodical
approach
2
Skill Sets
Experience in
conducting qualitative
primary research
3Objectivity
Adequateproximity
with respondents
• Questionnaire/ discussion guide designed
to facilitate the required analysis
• Appropriate mode of delivery to maximize
effectiveness
• Choose the right respondents
• Seek inputs from all stakeholders within
an organisation
• Use the right analytical tools & techniques
to arrive at actionable analysis and
recommendations for the company
• Trained primary researchers can ensure
better probing and hence deeper insights
• Not too close - VoC study cannot be
conducted by those who are close to the
customers, as biases are bound to creep in
• Not too far – At the same time,
interviewers need to have an adequate
understanding of the company and its
products so that they are able to probe
effectively and capture all the nuances
• Inadequate customer responses
• Inadequate analysis
• Non-amenable data for comparison and
analysis
• Inadequate analysis
• VoC data is superficial with no real
insights
• Conflict of interest in collecting
information
• Timely execution
• VoC data is superficial with no real
insights
8. White paper | February 2013 | Voice of Customer|8
An ideal administrator of VoC is a third-party agency that understands the company, technology, and products;
understands the objective of VoC; has the expertise to design an optimal program; and is not too “close” to the
customer. In-house departments, other than those dealing directly with the customers, may also undertake VoC.
For instance, human resource personnel trained in interviewing techniques can get insightful inputs that can feed
into business decisions without coloring opinions with their own biases.
CASE STUDY
Voice of Customer (VoC) enables Fortune 100 company tap $80 million opportunity in India
The Problem
A Fortune 100 engineering company with a presence in more than 100 countries and manufacturing technology
solutions, wanted to develop a go-to-market strategy for the Indian hospital market. They needed to
understand the hospitals’ requirements for their safety, security, productivity, comfort & energy efficiency
product portfolios, and service opportunities in the installed base of such products. They wanted to establish
the current market size, growth rates and growth opportunities for their products over the next 3-5 years.
The Solution
ValueNotes undertook an intensive Voice of Customer (VoC) study which gathered customer intelligence on 66
product categories from 650+ key decision-makers in over 100 hospitals across India. The study provided vital
inputs on key decision-makers within the segment, the procurement processes in the hospital segment, budget
allocation patterns & constraints, as well as the vendor selection processes.
The Benefits
The study captured the latent need for the client’s products, identified the high and low priority products, and
the hospitals’ preferences for owning and renting/leasing the products. This provided pointers for how to pitch
the client’s value proposition to hospitals. The study also provided vital inputs on the key decision-makers and
influencers within the segment, the varied procurement processes in the hospital segment, their budget
allocation patterns & constraints, as well as the vendor selection processes. ValueNotes further provided
insights and recommendations on contractors and system integrators, which enabled the client to develop and
implement a channel strategy for hospitals in India.
The client is now developing a comprehensive go-to-market strategy focused on increasing their market share
in the Indian hospital market.