• by Karlene Lukovitz  @KLmarketdaily, September 2, 2009

While the focus on harnessing social media continues, at this stage, customer feedback from other channels still has considerably more influence on actual business decisions, according to new research with "voice of the customer" (VOC) practitioners.

Between January and July of this year, VOC solutions provider Allegiance, Inc. conducted focus groups with senior managers at large companies with primary responsibility for collecting, managing and analyzing customer feedback and recommending actions that will create measurable business improvement. In addition, 1,100 practitioners from companies with leading VOC practices, spanning sizes and a wide range of industries/markets, were surveyed about their methods and challenges. Most (38%) VOC respondents fell within marketing, followed by CEOs (35%), operations (21%), customer care groups (17%), quality control departments (8%) and "other" areas (25%).

About two-thirds (67%) of survey respondents reported that they are currently monitoring feedback obtained by inviting customers to provide feedback after a transaction, 56% by monitoring customer-initiated feedback, and 41% by monitoring periodic membership surveys.

However, while 35% are monitoring verbatim customer comments from customer service transactions or calls, just 12% are monitoring such comments in blogs and social networks.

Furthermore, asked how likely their companies currently are to incorporate feedback from social media in the VOC loop, just 9% indicated "very likely" and 18% "likely." About one-quarter (28%) take a "neutral" view of social media feedback use, but nearly as many indicated that incorporation of such feedback is presently "unlikely" or "very unlikely" (23% and 22%, respectively) in their organizations.

Creating meaningful structures and metrics for social media-generated input are key obstacles, based on qualitative insights gathered from VOC practitioners, according to Chris Cottle, VP corporate marketing for Allegiance.

"When you probe, you find that they definitely see social media being incorporated into the feedback loop to a growing degree in the future," Cottle tells Marketing Daily. "But companies haven't yet seen a lot of direct correlation between social media feedback and dollar value or ROI, which is always true of a new technology. They are still figuring out how to make sense of that input. What do you do with 1,000 consumer tweets a day, which is the average for Walmart? The challenge is translating that into value."

Going to that point, 43% of survey respondents said that linking customer feedback with revenue or ROI is important, and 25% deem this very important, versus 14% who consider it unimportant or very unimportant, and 17% who indicate neutrality on this question. However, fully 51% of the VOC practitioners reported that their companies are not currently linking feedback to ROI, versus 29% who indicate that such linking occurs, and 20% who indicate that they are not sure.

Practitioners seem aware of being in an awkward transitional stage. While 35% believe that their current feedback monitoring processes are adequate, 21% view them as somewhat ineffective, and 15% as being "behind the times." Twenty-one percent describe their monitoring methods as "mainstream," versus just 8% who deem them "innovative/cutting edge."

Survey respondents reported that key feedback channels include customer emails (cited by 61%), Internet searches (60%), word of mouth (55%), magazines (48%), trade shows (33%) and "other" (20%).

Nearly one-quarter (24%) said that their companies plan to increase customer feedback budgets in the next few years, but 21% indicated no current plan to increase these budgets, and 54% were unsure. Among those who indicated increases planned, key reasons cited included improving the customer experience, increasing customer retention and sales, and maintaining or realizing a competitive advantage.

In focus groups, "daily" challenges cited by VOC practitioners included closing the feedback loop; tying customer experience to ROI/profitability; disjointed reports/lack of confidence in results; prioritizing actions; obtaining executive and company buy-in/getting others to act on the data; translating customer experience to meaningful action regarding products; integrating global/ international customer feedback; and creating "true" versus just transactional relationships with customers.

Long-term challenges cited included helping executives understand "the real issues"; synthesizing data from reports; organizational failure to react to "outliers"; and getting the company to understand the bottom-line value improving the customer experience.