Market research and voice of the customer programs 

Editor’s note: Eric Smuda is principal, CX strategy and enablement, at InMoment, a South Jordan, Utah-based computer software firm.  

As both a consumer and customer experience (CX) consultant, I see far too many voice of the customer (VOC) programs that don’t understand the difference between market research and capturing customer feedback. The truth is, they are different. One isn’t better than the other – and both are needed to inform your company’s strategic decision-making. However, they differ in purpose, design, analysis and outcomes.

The purpose of market research vs. voice of the customer programs 

While market research and VOC share similar techniques, they are different in intent, orientation and usage. 

Primary market research uses a myriad of quantitative and qualitative methods to understand customer needs, as well as to test new products, services and communications. It can also be used to let brands learn how many people might buy a new product, at what price point adoption might be optimized and other questions in that vein. Meanwhile, secondary market research is used to size markets, understand trends and unveil market dynamics.

Decisions made or strategies formed with market research studies may include:

  • Produce design decisions.
  • Customer segmentation.
  • New product or services launches.
  • Brand tracking.
  • Message testing.
  • Pricing decisions.
  • Target market identification and definition.
  • Market adjacencies or expansion opportunities.

Meanwhile, voice of the customer programs are designed to understand customer needs, wants and expectations, as well as how well a company is fulfilling those. These programs are designed to drive operations, marketing efforts and continuous improvement through both short-term and one-to-one actions. They also inform medium- and long-range changes across the customer base.

One key difference with voice of customer programs is that not all of the information gathered is solicited in the form of surveys, focus groups or interviews. There is a wealth of unsolicited feedback in call center recordings, social media feedback and website comments. A company can also infer a lot of information about customers by tracking their behaviors or purchasing habits.

Sample design and respondent anonymity

Sample design and respondent anonymity are probably the two areas where market research and voice of the customer differ most. In market research, a company defines the population it wants to target with a survey and carefully designs samples to ensure a match. And, because of the need to reduce response bias, these surveys are often blind or double blind, meaning the company sponsoring the research does not know who the individual respondents are. Likewise, the survey population doesn’t know who’s sponsoring the research.

It’s the exact opposite for voice of the customer. In this instance, all customers should have a chance to provide feedback (assuming some sample management and respondent fatigue rules) and all voices matter. It’s also critical to personalize the survey and let the brand know who is providing the feedback so that it can take action as needed. 

In market research, brands try to test a hypothesis or answer a business question. They ask as many questions as they need to get the data they need. However, internal stakeholders often ask to add their own questions to the survey, which is a very inside-out approach. But, organizations can often get away with that because their surveys are anonymous, and there’s not usually blowback over their length. Plus, incentives can also help with lengthy surveys as respondents see taking a longer survey as earning their keep.

In VOC, brands are trying to learn what they can from a customer’s behavior (both observed and inferred) and their voice. When soliciting actual feedback, you should engage a customer in a conversation instead of peppering them with questions. Surveys should be short and allow the customer to tell you what is important to them. It’s like running into a friend outside a coffee shop; just ask how it’s going and let them talk. Customers, like friends, will tell you what they want to share.

The difference applies to employee surveys too. Sometimes, you may need a whole battery of questions to understand employee views on management, communication, benefits and other topics. And sometimes you just what to know how it’s going. 

Data analysis and reporting

Market research and voice of the customer studies differ in how they’re analyzed and reported. When analyzing market research data, brands and researchers must take the full distribution of responses into account. Analysis focuses on the average customer (i.e., which percentage of the population believes something or intends to take a certain action). Weighting is often applied to ensure that the sample perfectly represents the target population, and thus that results are projectable to the broader population. Finally, organizations should undertake statistical testing at high confidence levels to ensure certainty in their findings.

Voice of the customer data analysis tends to focus on what’s called the ends of the response distribution – those customers who are most satisfied or loyal, and those who are not. Additionally, while market research data can be analyzed by segments, VOC data is often reported based on the organizational hierarchy (store/branch/dealer level; district or territory level; area or region level; total company or the hierarchy of the call center; etc.) because these are the levels at which actions are normally taken to improve experiences.

VOC vs. market research – data confidence

A pet peeve with analyzing voice of customer data is the application of the same high confidence levels of stat testing used in market research. While 90-95% certainty is needed to make multimillion-dollar product launch or advertising expenditure decisions (maybe 98-99% for drug testing and other medical research), do you really want to wait until you are 90% sure something happened in the market or that a competitor has moved ahead of your brand before you act on it?

Here is where the concept managerial significance comes into play. At what level of confidence does a product or territory manager need to be before they take action to improve? That depends on the level of risk tolerance in your organization, but it is recommended you should act before you are at least 90% certain that you need to. Otherwise, you risk customer churn, market share erosion, new market or technology entrants, and the threat of product substitution. 

What is holding market research and VOC programs back?

The greatest weakness holding back both market research and VOC programs is the vast majority of practitioners don’t frame their results or conversation in the language of business. 

Whether it’s VOC or market research, tying your work to at least one of the four economic pillars – customer acquisition, customer retention, cross-sell/upsell or lowering cost to serve – will reframe how your role is viewed and earn you a seat at the table. 

Driving a strategic agenda using VOC and market research

Every company needs to use both VOC and market research techniques to help drive a strategic agenda. However, every brand also needs to be thoughtful about when to use each approach. With VOC or customer feedback, you should always practice and outside-in, conversational approach that focuses on what’s important to customers, not and inside-out method that forces a customer to respond to what is important to each department. 

Remember, in customer feedback, every voice matters.