Studies show that a mere 5% increase in retention can boost profits by 25-95%. In this article, Alex Hoff, Chief Product Officer at Vendavo, explores the impact of Voice of the Customer programs on growth and retention strategies. Plus, discover how Vendavo has strengthened our own Voice of the Customer program with an emphasis on customer success and value acceleration.
There are many ways to drive organizational growth. Delivering a valuable product or service, empowering your sales team, and pricing your offerings within your customers’ willingness-to-pay thresholds are all important strategies. And, because studies show that acquiring a new customer can cost five to seven times more than retaining an existing customer (depending on industry), customer retention programs are also a must-have. If you’re not convinced, consider the research done by Harvard Business School and Bain & Company that shows increasing customer retention rates by just 5% increases profits by 25–95%.
A necessary component of high customer retention is positive Customer Experience, (CX). McKinsey & Company defines CX as encapsulating everything a business or organization does to put customers first, managing their journeys and serving their needs. Accenture says CX is the heart of the business-customer relationship and it’s about customer perception.
One could argue everything an organization does is in the hopes of creating positive customer perceptions…a key ingredient in successful sales. From the type of widget you offer, to the sales team putting their best foot forward, everything should be aligned with customer perception. How well are you meeting customer needs, wants, and preferences? For this reason, Voice of the Customer (VoC) programs are mission critical. They inform every other strategy.
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Voice of the Customer Programs
Voice of the Customer (VoC) programs collect and analyze customer feedback. Armed with that data, organizations can make customer-centric improvements to their brand, products, services, and customer experiences. Today’s successful VoC programs go far beyond surveys alone – they are designed to activate customer feedback and ultimately, enhance customer perception for greater customer retention.
3 Steps to VoC Implementation
- Gather customer feedback
- Analyze the data
- Turn that data into action
At Vendavo, we have implemented a comprehensive VoC program. When gathering customer feedback, we focus on collecting three different types of data: direct, inferred, and indirect feedback.
For customers to share experiences and provide suggestions, we relied on:
- Customer advisory boards
- User-level NPS
- Account-level NPS
- Product feedback
- User Experience (UX) research
Customer behavior and actions can also say a lot. We used:
- Product analytics (usage data and insights)
- Customer-validated realized value / ROI
Unprompted reviews and testimonials are also considered:
- Third-party online reviews
- Customer interviews
Overall, VoC programs should seek to supplement transactional data with sentiment data. This is how you identify true customer perception.
Activating Feedback and Continuously Improving
When putting your data into action, consider every area of your business. Ask yourself:
- Do product changes need to be made?
- Is value being communicated?
- Should customer service reps receive additional training?
- Do your sales quotes need to be turned out faster and more accurately?
There are countless ways to put customer feedback to use. Our VoC program, for example, plays an indispensable role in shaping our product roadmap approach, guiding us toward a more customer-centric and impactful product development strategy.
After you’ve completed the three VoC steps, take a step back and evaluate your progress. Are the actions you implemented transformative? When you go out for customer feedback again, are you seeing lift? Strong VoC programs are ongoing and iterative. At Vendavo, activating our VoC data has steadily increased our customer retention rate to more than 95%.
To see how Vendavo implemented VoC improvements, read the full case study from Gartner.