The Strategic Value of Customer Feedback

Strategic Value of VOCMost companies solicit customer feedback on their products or services in various forms, even though it is hard to find evidence of any strategic benefits derived from its use. Most commonly used methods, surveys and focus groups, are tightly controlled by companies through the selection of the subjects of inquiry and carefully formulated questions that require a quantitative response. These efforts are focused on validation of hypotheses about a product or service’s adoption by target market segments. However, they do little to help the discovery of unmet customer needs or to support construction of alternative hypotheses.

Unsolicited customer feedback, found “in the wild” at online customer reviews sites and forums, is an excellent source of insights comparable to the ones discovered by ethnographic research (by observation).  Both methods share the focus on the customer’s outside-in perspective, but “in the wild” feedback provides more statistically representative samples at a much lower cost.

“The only truly unbiased voice-of-customer feedback, I believe, is the feedback you find “in the wild,” that is, by simply observing the comments made by your customers in social media.” Don Pepper

It is a common practice today for many companies to collect and/or monitor both types of customer feedback. The problem is what they do with it. Ultimately, the quality of business outcome trumps what types of customer feedback or methodologies were used to produce it. There is a growing body of evidence that puts a very high value on the use of “in the wild” customer feedback for strategic innovation efforts. Yet, most companies use social media comments to focus on the resolution of public complaints by responding to them at a micro level.

“An ounce of prevention is worth a pound of cure.” Ben Franklin

The goal should be discovery and elimination of systemic process/product failures that impact customer experience. However, companies are often skeptical to consider unsolicited customer feedback as a reliable and fertile ore for mining strategic insights. Their management seemingly prefers the comfort of familiar, if not effective, evaluations by the “house” customers at the expense of their brand’s degradation by “in the wild” social consumers. The use of Band-Aids is not effective to stop heavy bleeding.

Since most “tamed” customer feedback is used for validation, and most “in the wild” customer feedback is used for firefighting, the relative ROI should be examined closely. Perhaps a better model would be to start using unsolicited Voice of Customer for selection of subjects for validation.

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6 Responses to The Strategic Value of Customer Feedback

  1. David Fish says:

    Good observations Gregory. I tend to think of two types of research as it relates to product development. Exploratory research which tends to be discursive and open ended. This is the “wild” type you describe above, which does list toward the qualitative, but doesn’t have to (laddering is a good example of qual technique that lends itself to quant validation). Once we have a concept or prototype ready to go, then its time to start racketing down and starting the traditional positivistic hypothesis testing. In my mind, the two work together hand in hand. Using one at the exclusion of the other…not so much. Thanks for the post!

  2. David Jacques says:

    Great post Greg! I’d add that there are different types of sollicited and unsolicited feedback. Either can be qualitative or quantitative, either can bring deeper insights that lead to innovation or firefighting. Listening to call centre calls for example will provide different insights than the NPS/CSAT survey that follows it. But to use social media as an example, that can be used both ways. Aggregated, comments can provide insights on common issues, trends, etc. That can lead to broader strategic decisions. But on an individual basis they provide an opportunity to do service recovery. Most companies though start with “listening” (aggregated) then never do anything with it because it is owned by marketing.

  3. Tom Lipscomb says:

    Good read Greg. There is a new set of emerging data that provides insights from an “unsolicited focus groups”. Quantitatively they leverage Psychographics combined with disparate data sources both structured and unstructured. There is a company that worked with Oxford which catalogues 100s of millions of users. They keep the confidentiality of individuals intact, but provide amazing insights. This combined with a myriad of data sources both internal to a company (sales, surveys, etc.) and external ones (weather, employment, disposable income, etc) may provide next wave of customer experience insights. I’ve seen amazing stuff.

  4. GregoryY says:

    Thank you Tom. I completely agree that linking more points of reference (i.e. more data sources) provides more opportunities for more meaningful and more accurate predictive models. We also have experimented with this approach and produced very interesting and very actionable results.

  5. GregoryY says:

    Thank you for kind words David. You point to the source of the problem – “owned by marketing”. Delivery of a superior customer experience cannot be “owned” by a line department of an organization. It is everybody’s job http://blog.cx-iq.com/customer-experience-is-everybodys-business-connecting-the-dots/

  6. GregoryY says:

    Thank you David. Could not agree with you more.

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