Why ROI Goals are Essential to your VOC Program

||Why ROI Goals are Essential to your VOC Program
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Why ROI Goals are Essential to your VOC Program

Author’s Note: This is the second of a series of six posts about Why You Shouldn’t Be Surprised Your VOC Program is Failing.

 

Every Voice of the Customer (VOC) program needs goals that are clear and measurable. The program itself must be held accountable to generate insights that drive ROI. Otherwise, there is no point in investing in a VOC program. And, no matter what you believe about NPS, customer satisfaction scores or ease of doing business scores, unless you have actually studied their impact on your specific business, you should not assume that improved scores equate to a significant ROI.

“According to the research, best-in-class VoC users—the top 20% of respondents, based on performance—enjoy an almost 10-times-greater year-over-year increase in annual company revenue compared to all others.”

CMO.com, Michael Hinshaw, March 29, 2016 

Instead, VOC programs should be focused on defining clear annual and quarterly goals for the program and supporting goals at the level of each research project. This often leads to a few challenges:

  • Companies don’t have the right data to measure profitability at the required level of granularity so measuring ROI can be nearly impossible.
  • Departments often disagree over who should take credit for the value of the improvements in sales, retention, etc. and these disputes cause many leaders to discount the value of VOC insights even if they were the catalyst for positive change.

If you’re running into problems already with these issues, you’ll have a real challenge even getting people to take action on insights because these are some of the largest roadblocks.

My clients who are the VOC leaders in their companies are continually asked, “How does investing in taking action on this insight provide more value than investing in the other projects we have in the pipeline?”  Not being able to justify the investment means the insight will be unlikely to ever reach the action stage.

In the second case, there have been some epic turf wars between departments resulting in hurt egos and damaged relationships because the VOC team and the product or channel teams were competing for credit on who created value from the insights. Often, VOC teams back off and agree to be measured by the number of insights they generate. This is a mistake because insights are useless until they’re applied.

“How does investing in taking action on this insight provide more value than investing in the other projects we have in the pipeline?”

 

The Solution 

One solution that works is clearly defining the target metric you are trying to impact.  As an example, you can identify the value of retaining customers for 10% longer.  While you may not have exact profitability statistics, you can probably find some agreement on a an average value per customer over the additional time period or for the estimated incremental transactions.

For individual VOC projects, look for a target that is valued at 10 times the investment. At the VOC program level, focus on an annual target of 10% or more in sales growth and 10% improvement in retention.

Next, aim for a target that is big enough so everyone can participate and receive the credit for the effort they contributed. For an individual project with specific research investment, I look for a target that is valued at 10 times the VOC investment. As an example, if I charge a client $100,000 for a research project, I want them to generate $1,000,000 in sales in 6 months or less. If I am doing a portfolio of projects or looking at the VOC program as a whole, I might aim at generating insights that can provide 10% or more growth in sales or retention per year for the entire company.

When the target is bigger, you will naturally look for more meaningful challenges and you will find them. In addition, you are growing the pie for the company, not just taking part of someone else’s existing slice.   VOC should never be an added expense. It must always be focused finding insights that improve a measurable growth target.

 

Read more about Why You Shouldn’t Be Surprised Your VOC Program is Failing.

By | 2017-06-02T09:29:24+00:00 August 31st, 2016|Categories: VOC and Customer Insights|Tags: , , , |0 Comments

About the Author:

Tony Bodoh is a two-time, #1 best-selling author and the founder or co-founder of five companies ranging from customer experience consulting to small business training to television. He easily navigates the international stage speaking at both personal growth seminars as well as the uber-nerdy technology conferences.

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