Sunday, February 16, 2014



Voice of Customer will transform e-commerceVoC Will Transform E-Commerce, Delivering Quality and Satisfaction
 

Evolution to the Present

Before the era of e-commerce, purchases generally required some face-to-face interaction between a salesperson and their customer, or in the case of telephone sales, at least some verbal interaction.  So for millennia, there was a natural mode through which the customer could provide feedback regarding the product or service being purchased.  This feedback could be used by the vendor to make improvements in their business.  But, then again, through much of human history, the absence of mass-produced items and the scarcity of large commercial centers meant that customers didn’t have any great choice of vendors – if an ancient Greek plebeian found the quality of their new leather sandals to be lacking, they might have to walk many hours to log a grievance and request a refund of their two drachmas.  A vendor who failed to respond to this sort of customer feedback probably experienced little impact on the success of their business.

Commerce in more modern times brought abundant selection to the customer by way of the shopping mall; it also brought celebrity endorsements on radio and television, as well as new channels for spreading customer opinions concerning quality and degree of satisfaction.  Responsiveness to customer feedback began to play a more pivotal role to the success of any given business.  This feedback continued to be available in the same modes that it had existed for thousands of years, generally requiring face-to-face (or at least verbal) interaction, with an occasional written survey or comment card.

Customers share their experiences through a multitude of channelsBut the advent of e-commerce over the Internet has changed the entire paradigm for sales of both products and services.  Now potential customers have the ability to comparison-shop a multitude of vendor options from the comfort of their easy-chairs.  And just as importantly, whether a customer is exceptionally pleased or overly disappointed in their recent commercial transaction, they have the ability to instantly share their experience with countless others around the world through email, blogs, and social media, thereby driving widespread perceptions of a business or product.  This new-found consumer power represents a many-fold amplification of the customer’s opinion; it is important enough to e-commerce that it has been given a special name: Voice of Customer, or VoC.

Present-day Paradigm Transformation

VoC as a term referring to the collection of customer feedback was first coined more than two decades ago[1], but it has seen special focus and growth in e-commerce facilitation tools over the past decade.  Allegiance is one of the larger players in the industry of providing such tools; this company has published an e-book[2] that includes ideas from many thought-leaders in the VoC industry, noting that the imperative for businesses to utilize VoC arises from the following fact:
The era of the silent customer is gone for good. Customers will make their voices known one way or another.
A business that fails to learn from their customers and adapt to their needs, and even to their perceptions, will be significantly handicapped in today’s global marketplace. The Allegiance e-book includes a fairly comprehensive list of the functionality contained within modern VoC platforms to support such learning:
    VoC analysis functionality must be multifaceted
  • Standard reporting and custom dashboards
  • Predictive analytics
  • Segmentation
  • Classification and regression modeling
  • Preset alerts
  • Sophisticated text mining
The Web Analytics Demystified organization makes a strong case in a whitepaper[3] (sponsored by OpinionLab, another leader in the VoC industry) for the fact that simply performing quantitative web analytics leaves a big gap in a merchant’s understanding of their customers:
When all you have are clicks, paths, and exits, how are you to determine if your online visitors are having success and/or a positive user experience?
Again, companies that fail to collect and analyze the feedback of their customers will find themselves at a significant disadvantage.  Furthermore, Leonard Klie provides strong justification in a CRM Magazine article[4] for the argument that the key to success with VoC is the ability to derive actionable insights.  To achieve this level of practicality, VoC solutions go beyond surveys; they collect feedback from a multitude of channels, organizing and prioritizing all of the information based on business goals.

Future Revolution

And yet, analysis of such unstructured, qualitative feedback information can be challenging.  Simply the vastness of information from a well-designed feedback-collection program can leave companies scrambling in too many directions to be effective in their response.  This is the drive behind Fidelity Investments’ effort to identify “moments that matter”,[5] specific customer experiences which have the likelihood to create either detractors or promoters of the product or company.  But to make such predictive analytics – derived from unstructured input, no less – widely available, traditionally silo-specific functionality will need to achieve a high level of integration.
An Integrated Listening Platform will bridge the vendor-consumer gap 
The Web Analytics Demystified whitepaper mentioned here previously refers to this future capability as an “Integrated Listening Platform” that will combine a number of VoC tools as well as product and customer management functionality to bridge the gap between the offerings of a business and the needs of the customer, naming the following list as just the beginning:
  • Web analytics tools
  • Customer experience management tools
  • Testing platforms
  • Customer Relationship Management (CRM) platforms
Recognizing that advances in text mining are crucial to the inner workings of this integrated platform, “Team Demystified” posits the following:
These integrations will take advantage of tool-to-tool interface integrations or pre-built APIs [Application Programming Interfaces] to exchange data between systems, making customer feedback more integral to systems that have traditionally been customer-unaware.

Ultimately, the insights obtained from such integrated platforms will be without value unless the vendors choose to act in a timely manner with the needed changes.  Companies that can demonstrate such agility and responsiveness will have an edge over their competitors.  In today’s hyper-connected world of consumers and ready availability of marketplace choices, this edge can very easily determine which businesses thrive and which collapse.  And as the availability of computing resources continues to grow at an increasing rate, free-market competition will revolutionize the implementation of VoC into something completely unimaginable just two decades ago when it was born.  Such acknowledgement of the value of customer feedback can only lead to a world where the customer is king and quality reigns supreme.


[1] Griffin, Abbie and John R. Hauser, “The Voice of the Customer”, Marketing Science, 12 (1), 1993, pp 1-27.
[2] Capitalizing on Voice of Customer, a collaborative e-book, 2010.
[3] Greco, Adam, “The Future of Voice of Customer”, Web Analytics Demystified, Inc., 2012.
[4] Klie, Leonard, “Listening to the Voice of the Customer”, CRM Magazine, July 2012.
[5]Lessons Learned from the 2011 Voice of the Customer Award Winners”, (captured in a presentation prepared by Rapide) Forrester Research, Inc., 2011.