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What’s the cost of listening to customers?
Someone asked me recently about the percentage of revenue that customer-focused companies spend on their VOC initiatives. Although they wanted some guidance on what to spend on a VOC solution, I thought it was a fair question but one for which I don’t have the answer. That didn’t bother me much because I do have an answer, just not the one he was looking for.
Don’t get me wrong. Listening to customers – and acting on what you hear – is paramount to business growth and success. But that’s not what executives want to hear. They want to know how much it’s going to cost and what the return on investment will be. To that I say, the cost will vary, depending on your approach, and the ROI will mostly be viewed in dollars but can me measured in many other ways, as well.
I think the problem, though, is that they’re thinking about it the wrong way. First, they’re thinking about the wrong costs. How about considering the cost of:
- acquiring a new customer
- retaining existing customers
A recent study by Oracle shows that businesses could lose as much as 20% of revenues as a result of a poor customer experience. That should be a wake-up call.
And, it’s not just a VOC solution that they’ll be paying for; they’ll need to consider all the factors that go into – and outcomes as a result of – improving the customer experience, i.e., they need to act on what they hear and be thinking big(ger) picture.
You learn when you listen. You earn when you listen – not just money, but respect. -Harvey Mackay
They’re also not thinking about the benefits of listening to customers, acting on what they hear, improving the customer experience, and building a base of raving fans who:
- want to see the brand succeed and grow
- are happy to provide feedback, good or bad, to ensure that that success happens
- are less price sensitive
- require less support because they are more familiar with your products
- choose your brand over the competition
- can’t live without your brand and accept no substitutes
- are advocates or, even stronger, evangelists, spreading the word about your brand
- wear your brand, and want to show that they are part of something bigger than themselves
- openly recruit new members to the community
- are more likely to be using several of your products/services, not just one
Most, if not all, of these over-shadow the price you pay to implement a VOC solution. The real focus needs to be on how to improve the customer experience, and if we don’t understand who our customers are, what jobs they are trying to do/achieve, and how well that’s going, then none of the above will happen.
So let me pose this. I think they’re asking the wrong question; they should be asking: What’s the cost of NOT listening to our customers?
The first step in exceeding your customer’s expectations is to know those expectations. – Roy H. Williams