To avoid making decisions based on an incomplete understanding of your customers, make the ever-changing Voice of Your Customer the core of your intel-gathering plan.
While banking executives are breathing a collective sigh of relief that a major recession was avoided in 2023, they are still assuming a posture of cautious optimism about economic trends in 2024. Specifically, they are bracing themselves against the headwinds threatening the growth of both their customer base and their bottom line.
Advanced technologies (you may have heard of something called AI) promise much in terms of capturing behavioral and transactional information about your customers. This data about what your customers are doing can be useful, but it does come up short in some significant areas where feedback directly from your customers – i.e., Voice-of-Your-Customer data – delivers.
Because direct customer feedback – data FROM your customers – and customer behavioral or transactional data – data ABOUT your customers – serve different purposes, they can each provide valuable insights in different ways. Both are important sources of customer intel, but there are unique advantages in using direct customer feedback to understand customer needs. Such an understanding is vital to improving service delivery while informing business strategies with the most insight-filled intel available. Financial institutions achieving “world-class” status, as measured by NPS, recognize feedback FROM their customers as an essential part of their success.
“Customers can provide insights into their emotions, motivations, and specific experiences that influence their actions. This context is crucial for understanding the WHY.”
Building Trust from Authenticity
There’s a reason Merriam-Webster chose “authentic” as its Word of the Year for 2023. It reflects a trend of customers drawn to honest, open relationships with businesses. To a higher degree than other business relationships, customers’ connections with financial institutions turn on earned trust. Because sustaining that trust is an ongoing process, an authentic give-and-take with your customers provides knowledge of a richer variety than just a surveillance view of their activity.
Why is including feedback FROM your customers better than relying only on data ABOUT your customers?
1. Insights into Intent
Feedback FROM your customers often comes with context and details that data ABOUT your customers lacks. Customers can provide insights into their emotions, motivations, and specific experiences that influence their actions. This context is crucial for understanding the “why” behind certain behaviors – especially if you want to take action to improve your customers’ experiences.
Customer feedback offers qualitative data, allowing businesses to gain a deeper understanding of customer sentiment, preferences, and perceptions. While data ABOUT your customers provides quantitative information, it may not reveal the underlying reasons for customer actions. In most cases, it’s the information BEHIND the numbers that enables you to act purposefully and precisely.
Data ABOUT your customers shows what customers do, but feedback FROM your customers helps understand WHY they do it. Observational data about customer behavior doesn’t probe deeply enough to uncover your customers’ driving motivations. Knowing the intent behind actions allows businesses to tailor their strategies to better meet customer needs.
2. Uncovering Pain Points
Feedback FROM your customers, in their own words, is instrumental in identifying pain points and areas for improvement. Customers can highlight specific issues, challenges, or concerns they face, which may not be evident solely through analyzing behavioral patterns. And you can be sure that they WANT to tell you when something is not right. All you have to do is ask!
In addition, quantitative data does not convey the emotion behind your customers’ behaviors. Voice of the Customer channels can capture the sentiment motivating your customers in a way that data ABOUT your customers cannot.
3. Ideas for Innovation
Customers often provide suggestions and ideas for new features or improvements that can lead to innovation. As they express their frustrations and wishes, they tell you where investment of your resources and energies will be most rewarded. This type of creative input is valuable for businesses seeking to stay competitive and keep pace with evolving customer expectations.
Customer feedback can also be an early indicator of emerging financial consumer trends or issues within the market. Proactively addressing these trends can give a business a competitive advantage, as you become one of the first to offer a new in-demand service or feature. Think of this anticipatory reading of your customer base as your “crystal ball.” Taking the point position on a key market shift or consumer trend can establish your authority as a leader, as your competition struggles to catch up.
4. Building Relationships
Communications through a marketing platform tend to be one-way, with the customer forced into a passive role, and seen only as a potential consumer of products and services. Engaging with customers directly through feedback channels facilitates the dialogue that builds stronger relationships. This openness shows that your business values customer opinions and is willing to listen, fostering a sense of trust and loyalty.
Sometimes, data ABOUT the customer can be misinterpreted or misunderstood because it lacks context. Direct feedback provides an opportunity for customers to clarify or correct any misconceptions, ensuring more accurate insights.
5. Personalization
Feedback FROM your customers allows for more personalized interactions. Marketing platforms may be able to simulate personalization by filling in a few lines on a template with individual info, but savvy customers know when there’s a real person on the other end. With VoC programs, businesses can tailor their responses and solutions based on the specific feedback provided by individual customers, enhancing the overall customer experience.
Direct feedback also adds a human touch to the data. It helps businesses remember that behind every data point, there is a real person with emotions, preferences, and unique experiences. With so many digital options available, customers appreciate that ever-rarer empathy that comes with having a real person listen to their concerns.
“Engaging with customers directly through feedback channels facilitates the dialogue that builds stronger relationships.”
An Authentic View of Your Customers
While customer behavioral data ABOUT your customers is helpful for detecting patterns and trends, direct customer feedback FROM your customers takes it further by offering qualitative insights, context, and a deeper understanding of individual customer needs, expectations, and motivations. In short, it can provide a comprehensive, authentic understanding of your customers. This understanding is your roadmap to world-class performance in 2024 and beyond.
Are you ready to elevate your performance to “World-Class”? We’ll show you how to get there – and we’ll be with you every step of the way!
