By Dave DeWitte
They’ve become a predictable part of purchases – those reminders via email, sales receipt or the voice of a friendly cashier to fill out an online survey. They’re called Voice of the Customer (VOC) surveys, and to the largest Corridor-based chain of auto dealerships, and many others like it, they’re invaluable.
“Without question they have helped us improve the customer experience,” explained Gavin McGrath, general manager of McGrath Family of Dealerships, in an email. “It is the most immediate, honest feedback we can ask for.”
Not so long ago, consumers could expect VOC surveys only intermittently, no matter how often they did business with a company. That was partly because the surveys took time to develop and were costly to administer. No longer, explained Peggy Stover, co-founder of Annex Analytics in Cedar Rapids and director of the University of Iowa Marketing Institute.
“It’s become more affordable for the local [business] person and easier to administer a survey,” she said. “You have so many tools available that are easy to use and quick to administer.”
As a self-described “data geek,” Ms. Stover is a big fan. She said VOC data provided some of the richest insights she used earlier in her career to advise big consumer goods companies on opportunities like new products worth pursuing.
“The best way to grow your business is by listening to your clients,” Ms. Stover said.
Yet even strong advocates of VOC surveys say they’re not a trouble-free method of gaining insight and can open the door to both negative consumer perceptions and misleading research conclusions.
Steven Keith of CX Pilot, a North Carolina consultancy expanding to the Corridor, advises clients on customer experience strategies, including setting up quantitative and qualitative customer surveys.
“We create taxonomies of data, and try to help people understand the things they are doing that are net positive, neutrals or a net liability,” Mr. Keith said.
One way companies invite trouble is by asking for too much in a VOC survey, causing customers to shut down and avoid future surveys.
“What’s the point at which our inquiry becomes burdensome or invasive?” Mr. Keith asked. “That’s the balance that is struck.”
The potential to create a negative impression among consumers increases when a company repeatedly surveys consumers about their perceptions regarding recent interactions, but fails to improve on the issues raised.
“If you ask the consumer the same questions repeatedly and don’t do anything about it, you’ve just exponentially increased the likelihood of getting negative feedback,” Mr. Keith said.
That leads to what Mr. Keith considers the largest challenge. With a growing number of supply options available online, competition is getting stiffer and the cost of acquiring customers is increasing all the time. That makes building customer loyalty more valuable, Mr. Keith said, but when a customer raises an issue in a survey that isn’t addressed by the company, he or she is likely to grow even more alienated and open to switching suppliers.
“The problem with VOC is, ‘what do you do with the data?’” Mr. Keith said. “You can have that data, but what you do with it is almost paralyzing to the client. The paralysis comes from not having confidence in the decisions based on the data. The consequence is you’re collecting data from consumers you’re not using.”
Some companies have taken the concern so seriously that they insist on actions when negative feedback is provided. They call such surveys “consumer insights and actions,” Mr. Keith said, and it’s an important distinction.
“Our cardinal rule is, ‘never ask a question unless you have a plan to act on it,’” he said. “If it’s merely nice to know, you’re creating that exponential drag on liability. It’s crying wolf, actually – they’re not going to respond to the next survey.”
Thinking “lifetime value”
One of the concepts underpinning Mr. Keith’s work with clients is lifetime customer value. Without understanding the economic value a customer can bring to a company over the entire term of the relationship, he said it’s hard for companies to see how much they should be willing to invest in acquiring and retaining customers. The results can be used to segment the customer base and optimize marketing strategies.
“If you’re segmenting your customers and know that 80 percent of your revenue comes from 20 percent of your customers, it radically changes your fuel mixture,” Mr. Keith said. “How about that 20 percent who are providing 80 percent of your business?”
In an extreme example, CX Pilot helped a single customer save about $20 million through a customer segmentation strategy. That customer was a large financial company that had focused on listening to customers about the kinds of products it should offer, and introduced many new ones based on that feedback. The result was products that appealed to only a handful of customers, and never generated enough revenue to recover the costs of product development.
“All customers are not created equal,” Mr. Keith noted.
At McGrath Family of Dealerships, timeliness is an important part of its survey strategy. General Manager Gavin McGrath said the dealership group does not want negative customer perceptions to linger. Until two years ago, only certain service and sales customers were sent a survey. Today, every one of those customers gets one.
The strategy seems to be working. The McGrath Family of Dealerships claimed two big wins in the CBJ’s 2017 Best of the Corridor awards competition: Best Fleet Manager/Dealer and Best Auto Dealer.
“If we get feedback on a survey that points to us making a mistake, we get right on it,” Mr. McGrath wrote. “Every situation is different, but we certainly make it right with our customers in any way we can.”
Direct-to-consumer companies seem to offer a variety of incentives for their customers to take time out for a VOC survey. Some make the survey response a registration in a sweepstakes for a cash prize; others offer a coupon toward a future purchase.
Ms. Stover said consumers are typically generous in their willingness to work with companies that want to fix or improve the customer experience. Many companies receive a high response rate without offering any direct incentive for responding.
“We try and communicate with them that feedback is the breakfast of champions – the more of it you can give to us, the better we can serve you,” Mr. McGrath said. “Our customers love using the survey as a platform to give praise to our employees. Multiple times a day I read surveys giving great feedback to the work our people have done.”