Article Voice of the Customer in the Digital Economy
Today’s customers are talking — and their voices have crescendoed to a roar.
By Claudia Hrynyshyn / 22 Oct 2019 , Updated on 11 Aug 2020 / Topics: Customer experience Digital transformation
Over the last decade alone, consumers have been given a colossal platform to be heard and to influence others.
Through social media and online review platforms, customer sentiments manifest through pictures, videos and blog posts that go viral daily. And in seemingly snap decisions, the digital economy gets behind certain brands … and abandons others.
So, how loud is it?
Global Digital 2020 Reports from We Are Social reveal there are now more than 3.8 billion social media users worldwide, with trends indicating about half of the world's total population will become social media users before the end of the year. That’s an enormous pool of potential online customers — and potential advocates for your business.
Today’s customers are increasingly motivated to help others connect with the brands that resonate with them. According to the 2018 Customer Experience (CX) Index by Sitel Group, 49% of U.S. consumers are willing to share a positive customer experience or review on social media, while 30% would leave a negative review.
In the past, one bad experience was all it took to make or break a customer relationship. However a COVID-19 customer experience impact report by Sitel Group reveals a more gracious customer sentiment. Prior to the impact of COVID-19, nearly three-quarters (74%) of those surveyed also say they would stop doing business with a company as a result of poor customer service — and 50% had already done so. During the pandemic, however, just 43% would consider breaking up with a brand and just 14% said they had publically shared a negative experience.
It’s safe to assume the grace period for accepting a sub-par customer experience will expire. Brands will do best to continue to prioritize, invest and innovate the CX. After all, 38% of consumers say they’re ready to pay more for a superior customer experience, according to the same 2020 Sitel Group report.
The rate of influence
A study from BrightLocal found that customers read an average of 10 online reviews before deciding to trust a business, and 91% of 18- to 34-year-olds trust online reviews as much as personal recommendations. The same study reveals that 57% of consumers will only use a business if it has four or more stars — proof that just a few customer opinions can tip the scale in favor of or against your brand.
In this new maze of constant sharing on numerous outlets — so many voices at one time —businesses are now challenged to not only pinpoint where the voices are coming from and what they’re saying, but to lasso them all into a central location and glean insights. Finding the voice of the customer in the digital economy and knowing how to make this data meaningful will change the way businesses compete to stay alive.
Voice of the Customer: Tradition and disruption
The Voice of the Customer, or VoC, is a process by which feedback is collected about the experiences customers have with products and services, as well as their preferences for future interactions. VoC data collection through social media, surveys and interviews is a common way to start a dialogue with customers — and the majority of today’s businesses already have VoC programs in place.
So, if the majority of businesses are listening to the voice of the customer, they must be using that voice to make improvements, right? Guess again. According to PWC’s annual survey, 73% of all U.S. consumers point to customer experience as a key factor in purchasing decisions, but less than half (49%) say the companies they interact with currently provide a “good” customer experience. And 54% of those surveyed say the customer experience at “most companies” still needs improvement.
Sorting through the noise with data
To capitalize on this opportunity to better serve your customers and capture a larger share of the market, businesses should build a data strategy team dedicated to gathering and interpreting data. The best teams arm themselves with industry trends, the organization’s past performance and customer feedback.
Technology is ripe with opportunity to transform data into business intelligence. Social media data from cloud-hosted platforms can be populated to custom analytics dashboards and built on top of data visualization systems like Microsoft Power BI. This enables teams to interpret customer sentiments and identify patterns, effectively eliminating the need for guesswork when it comes to understanding customer needs.
Driven by strong outcomes, the use of customer analytics has risen sharply in the past few years. Research from Forbes demonstrates the value of applying data to better serve your customers:
- 58% of respondents state that their organization has seen a significant increase in customer retention and loyalty due to the use of customer analytics.
- 51% report an improved understanding of the customer journey.
- 44% report a measurable increase in revenue.
Turning insight into innovation
Digital transformation requires a relentless focus on customer engagement, designing products and experiences around your customers’ needs. Data alone isn’t enough. Even with the most robust analytics, businesses will only succeed if they have the internal ability to change or innovate parts of the business to meet customer expectations. If your customer wants to go to Mars, you’d better be able to build a spaceship.
With this in mind, consider the following key factors when innovating your products and services:
Self-service: If customers are displeased with long wait times or the number of steps required to obtain a product, self-service is an ideal way to innovate the customer experience. Self-service kiosks have become more popular in grocery stores, airports and hotels, eliminating long lines and creating cost savings for businesses in the process.
Even hospitals are finding ways to incorporate emerging technologies to help patients navigate their stay. Patient devices and portals deliver real-time updates, provide information on wait times or daily meals and even offer entertainment in the form of games or jokes.
Convenience: Beyond self-service, general convenience is another driving force. This can be as simple as refining the way you deliver products. Rather than depending on a traditional brick and mortar shopping experience, Rack Room Shoes invested in a mobile app that enables users to place and track orders, earn loyalty points, redeem rewards and take advantage of exclusive deals. The retailer now experiences a 20–25% higher mobile conversion rate and an average order value increase of 40–50% for mobile purchases.
Personalization: Like a good friend who knows our likes and interests, businesses that create personalized experiences through recommendation engines strengthen the “bond” they have with their customers.
Amazon is one of the most notable success stories, leveraging recommendation engines and the “wisdom of the crowd” to create a fine-tuned shopping experience. While this type of data-driven experience was once limited to industry giants, the rise of Artificial Intelligence (AI) means that any organization with access to customer preferences or purchase history has the ability to deliver service with a personal touch.
Entertainment: It’s no longer enough for products and services to deliver on the bare essentials. Customer’s digital expectations are evolving, driven not only by their experiences with other businesses, but also the increasing proliferation of the entertainment industry. The more customers are amused and entertained by the digital economy (while benefiting from it), the more likely they’ll be to share their experiences with others.
LEGO embraced this philosophy with the development of new mobile apps and games designed to pair with their physical products, essentially creating franchises around each of their product categories. The addition of this branded content encourages further engagement and brand loyalty among customers.
Prediction & proactivity: It’s not enough to assume customers’ interests based on the preferences of others. Being predictive and proactive means leveraging real-time analytics to track usage and behaviors, then deriving strategic intelligence to create continuity in the customer experience.
Netflix famously pioneered predictive recommendations by leveraging user watch history to make suggestions based on preferred genre or style of content. Some wireless providers have now put this approach into practice by tracking mobile data usage in real time, making timely data upgrade offers the minute a user reaches his or her data cap.
How will you answer your customers?
Your success in the digital economy will hinge on how well you understand the voice of the customer — and how you innovate your products and services to adapt. No matter how digitally evolved your business is, changes can always be made to improve the way you interact with your target audience.
It’s important to remember that flaws in the customer experience aren’t always “gaps.” Instead, they may simply be points of friction created by inefficient or outdated processes. Big data, AI and other emerging technologies can help peel away at those layers of friction — allowing you to better understand and better serve your customers.
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Key takeaways
- 73% of all U.S. consumers point to customer experience as a key factor in purchasing decisions.
- 54% say the customer experience at “most companies” still needs improvement.
- 49% of U.S. consumers are willing to share a positive customer experience or review on social media, while 30% would leave a negative review.
- 44% of businesses report a measurable increase in revenue thanks to customer experience analytics.
