How Supply Chain Leaders Can Use Voice of

the Customer to Improve Customer Experience

FOUNDATIONAL Refreshed: 13 November 2019 | Published: 28 June 2018 ID: G00352979

Analyst(s): Beth Coppinger, John Johnson

Leveraging voice-of-the-customer insight helps the supply chain play an

active role in defining and responding to customer needs. This research
helps supply chain leaders focused on fulfillment to leverage the voice of the
customer to improve service and enhance the customer experience.

FOUNDATIONAL DOCUMENT
This research is reviewed periodically for accuracy. Last reviewed on 13 November 2019.

Key Challenges
■ Many companies have multiple existing voice-of-the-customer (VoC) programs that are not
connected to supply chain, creating a void in improving service and customer experience.
■ VoC data is not widely used by supply chain leaders to create an understanding of customer
wants and needs, and as a means to improving both service and satisfaction.
■ Companies often launch customer surveys without having a clear strategy for what to do with
the information when they receive it.

Recommendations
Supply chain leaders focused on customer fulfillment and collaboration should:

■ Identify sources for collecting VoC feedback. Take ownership of mapping where the supply
chain interacts with the customer and the customer can give feedback. Select those feedback
channels that link to operational data that can be most easily collected and analyzed today,
while creating a strategy to expand those channels in future.
■ Collaborate internally across the enterprise to create a program for capturing and using VoC
data that maximizes benefits and delivers the greatest impact. Find existing VoC programs in
the company and expand to include supply chain. If none exists, create one.
 ■ Collect and analyze the VoC feedback, and select two or three areas for improvement. Discuss
the outcomes and actions with key customers and engage them in the ongoing process to
improve customer experience.
■ Incorporate several measures of CX that include loyalty, customer satisfaction, advocacy and
quality. Link these measures across the company to gain a unified view of the customer.

Table of Contents

Introduction............................................................................................................................................ 2
Analysis.................................................................................................................................................. 6
Identify Sources for Collecting VoC Feedback...................................................................................6
Collaborate Across the Enterprise to Create a Program for Capturing and Using VoC Data.............. 7
Inventory Existing Data Sources..................................................................................................8
Identify and Involve Partners....................................................................................................... 8
Brainstorm Surveys and Other Listening Posts........................................................................... 8
Prioritize the Various Customer "Listening" Posts and Identify Your Most Pressing VoC
Opportunities..............................................................................................................................9
Catalog Outputs......................................................................................................................... 9
Create a Closed Feedback Loop With Customers.......................................................................... 10
Expand Supply Chain Metrics to Incorporate Several Measures of CX............................................ 12
Gartner Recommended Reading.......................................................................................................... 13

List of Figures

Figure 1. CEO Top Business Priorities for 2018 and 2019.......................................................................4

Figure 2. The Most Important Voice-of-the-Customer Channels Used in Customer Experience
Management.......................................................................................................................................... 7
Figure 3. Intel's Customer Excellence Program.....................................................................................11
Figure 4. Most Commonly Used Metrics for Measuring Customer Experience...................................... 13

Introduction
1
The 2018 Gartner CEO and Senior Business Executive Survey indicates that CEOs remain
committed to growth and business investment (see "2018 CEO Survey: CIOs Should Guide
Business Leaders Toward Deep-Discipline Digital Business"). Similarly, the customer remains a top
priority, placing in the top five focus areas for CEOs for four consecutive years (see Figure 1). As a

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 supply chain leader, it is important that your supply chain is positioned to support these CEO
priorities. One of the best means of ensuring this is to listen and respond better to the VoC.

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 Figure 1. CEO Top Business Priorities for 2018 and 2019

Source: Gartner (June 2018)

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 Customers in different industries place a different value on the elements that sum up to create the
whole of their experience. A pharmacy customer may prioritize product availability, safety and
compliance, whereas high-end retail shoppers prioritize quality and choice. A farmer will look for
services regarding what to plant and information to optimize his crops. The warehouse manager will
look for product to be delivered complete and on-time, but also in a manner that makes it easy to
put away. If customers have questions about your products or services, they look for an easy way to
quickly obtain the correct information. Depending on the industry, you may have multiple customer
types. Demographics, previous experiences (not necessarily with your organization or product) and
factors such as whether your customer is even human can shape your customer experience
strategy (see "A Focus on Customer Experience Is a Sign of Supply Chain Maturity").

As a supply chain leader, how aware are you about what your customers want and need? For many
organizations, the role of "customer understanding" has traditionally been within sales and
marketing. But the facet of understanding and responding to customer needs is no longer the
responsibility of any one function within the company. Top companies take a cross-functional
approach to understanding and meeting the needs of the customer, including supply chain. For
supply chain professionals, understanding the needs of the customer means understanding more
than demand forecasting or on-time product delivery. It means knowing how the customer interacts
with your people, processes, products or services and then knowing how they relate those
interactions to their overall experience as a customer. It means listening and responding to the VoC.

Leading supply chain organizations use VoC feedback, typically gathered through surveys, to
understand if service matches customer expectations. Depending on the scope of the VoC
program, relevant insights provide CSCOs with the information to develop the right skills and
capabilities to drive systematic improvement of the customer experience. For example, CSCOs use
VoC data to:

■ Identify problematic touchpoints that increase customer effort and reduce customer
satisfaction.
■ Help form a "single view of the customer" for the whole organization.
■ Measure the performance of customer service centers, apps, websites and other customer-
facing processes.
■ Collect feedback to improve products and services.
■ Recognize key drivers of satisfaction and dissatisfaction.
■ Identify unhappy customers and "close the loop" to reduce customer churn.

VoC is critical to advancing supply chain's knowledge of the customer. In this research, we focus on
three best practices for supply chain to understand where to look to gather the information about
the customer, how to collaborate internally to improve your understanding of VoC feedback and
how to act upon the insights and define the right metrics to measure the benefits.

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 Analysis
Identify Sources for Collecting VoC Feedback
When developing your VoC program, consider the channels through which you will collect feedback
data, and the methods you will use to collect that feedback. There are a myriad types of channels
from which feedback can be collected, linked to the three core classifications — direct, indirect and
inferred.

■ Direct feedback: Feedback that customers intend to provide to the organization, typically in the
form of a survey, a complaint, market research, in-person meetings or a forum/panel.
■ Indirect feedback: Feedback derived from instances when the customer is speaking about an
organization without specifically intending to furnish feedback to the organization. This includes
collecting insight from review sites, social networks and customer care interactions via phone,
email and chat sessions.
■ Inferred feedback: Operational and transactional data associated with a customer experience
or "journey," such as a website's clickstream data, purchase history or operational data from
contact with customer service.

The goal here is not to try to understand every channel at the outset, but to start with those
channels where you can easily begin to collect and leverage the data provided — and then expand
as you gain experience and the program gains momentum. Most manufacturers start by assessing
the direct feedback from their top customers.

Increasingly, the role of voice-of-the-customer data is evolving from merely adding another
dimension to customer analysis to impacting all facets of daily supply chain execution. Figure 2
shows a ranking of the most important VoC channels used by companies to gather data and insight
about customers. Companies select different voice-of-the-customer channels to use depending on
whether they operate in a B2B, B2C or B2B2C environment. Relationship surveys and advisory
boards are more aligned to the deeper relationships typical of B2B companies, whereas social
media and online forums are often favored for B2C.

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 Figure 2. The Most Important Voice-of-the-Customer Channels Used in Customer Experience Management

Source: Gartner (June 2018)

Collaborate Across the Enterprise to Create a Program for Capturing and Using VoC
Data
A VoC program provides timely and relevant insights to help drive systematic improvement of the
CX — both for supply chain and the enterprise as a whole. It also helps achieve strategic customer
goals, such as revenue growth, satisfaction and retention. While supply chain will often not be the
ultimate lead for a VoC program, it must be a key stakeholder in ensuring that the information
gathered covers the customer's supply chain wants and needs. Supply chain must partner across
the organization to ensure the VoC program captures supply chain feedback.

Developing this program should include:

■ Inventory of existing data sources

■ Identification and collaboration across a broad set of internal partners
■ Assessment of alternative data sources (beyond current data)

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 ■ Prioritization of the different channels and data sources
■ A summary of the desired outputs

Inventory Existing Data Sources

Consider the sources of data your organization already has. For example, if you are already using a
variety of feedback and VoC mechanisms, there may be economic and strategic value in combining
disparate efforts into a single platform and initiative. Also, evaluate the data you will need to import
to execute surveys, analyze results and distribute to the appropriate team postsurvey for action.
This may include simple personally identifiable information, such as customer name and email
address, as well as data necessary to produce insights, including information on customer spend,
products purchased, customer service interactions, web and mobile behaviors, and customer
demographics.

Identify and Involve Partners

Cast a wide net and work collaboratively with peers from across the organization to participate in
the development of the VoC program. Since supply chain isn't often the leader of these programs,
identify where you can piggy back on existing data collection activities, and tailor questions that will
give insight to specific supply chain processes and interactions. If supply chain is the leader,
consider including anyone who will be a "customer" of the VoC program information, including
leaders from sales, marketing and product development. This will help to reveal other existing VoC
or feedback mechanisms in place, strengthen your plan and help to ensure wide adoption and use
of customer insights. A broader use of the VoC output will help drive alignment and a "single view"
of the customer and their needs. This becomes important as you begin to create projects and seek
funding for changes that improve the customer experience.

Brainstorm Surveys and Other Listening Posts

Consider the different channels used to gather customer perceptions, emotions and feedback and
agree if other channels need to be added, or additional information needs to be collected. For
surveys, consider the variety of stops along the customer journey, such as immediately after
purchase, upon receipt of the goods and services, and following customer service transactions.
Also, consider the various channels in which structured and unstructured data will be useful (such
as web intercept surveys, email surveys and surveys following customer interactions or chat
sessions). Work collaboratively across functions to ensure that critical information needs are
reflected as surveys are designed. Also, study the value of other types of listening posts such as
social media, customer complaints and customer communications such as the actual text from
customer service emails and conversations. The challenge here is to balance the number of
questions you would like to ask, with what is "reasonable" to the customer and not perceived as
overwhelming. Review the options for direct, indirect and inferred feedback sources mentioned
earlier.

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 Prioritize the Various Customer "Listening" Posts and Identify Your Most Pressing VoC
Opportunities
Identify your most urgent needs and tasks. Use this to prioritize the survey and other listening
opportunities to identify your most urgent needs and tasks. Look for quick wins in areas where there
is an established "listening" post where data collection may just need expansion. Start with the
ones that focus on understanding your primary customers or personas. Seek survey and listening
opportunities that provide you with the greatest quantity of data and insight for the appropriate level
of investment. Revisit the question of who will use the VoC data and fast-track those VoC channels
that can satisfy the greatest number of internal needs. Also, give preference to listening sources that
provide the greatest accuracy and specificity — surveys provide your supply chain with the
opportunity to focus on its key customers, collect information on product and service delivery, as
well as areas to improve service, costs and cash flow. Look for opportunities to merge customer
feedback with customer data for greater insight.

Catalog Outputs
Define the desired learning outcomes from the data collected via the VoC channel or survey. Assess
the potential impact on different touchpoints and interactions with the customer. Target what you
plan to do with the results, and create a summary of the sorts of outputs desired.

■ What reports will be helpful for supply chain leaders?

■ What real-time dashboards can drive engagement and usage throughout the enterprise with
customer fulfillment, the broader supply chain and the extended enterprise?
■ How will you close the loop with disappointed and angry customers?
■ How will you close the loop with relatively satisfied customers that are looking for new or
different services?
■ How will you use the data to make improvements in your supply chain design?
■ How will you create and staff projects to deal with specific input and improvement suggestions
received from your customers?
■ How will you track the progress of these programs and create a continuous feedback loop, both
internally and with customers?
■ What alerts would be useful to raise awareness of rapid changes in customer sentiment that
can demand immediate awareness and action?

Creating and implementing a strong VoC program is a continuous improvement journey. The goal is
to create an ongoing dialogue with customers to ensure you are clear about their needs and
expectations. Leaders of successful programs measure the effectiveness of the various feedback
channels in gathering actionable information. They make adjustments to the questions asked, and
monitor the improvements in the overall customer experience.

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 Create a Closed Feedback Loop With Customers
Once the data is collected, it's time to act on it. A VoC program is only valuable if you take action to
improve the customer experience. One of the key challenges in translating insights to action is
motivating employees from across the organization to integrate and act upon this "external" view in
their daily working practices. This means ensuring that employees understand how they fit into the
overall CX effort and driving alignment of commitment and goals.

Implement a robust VoC governance framework that has visible support from the executive level.
Ensure that all employees understand their role in the goal, and are aware of their responsibilities
and the actions they can or must take to improve the CX. Good governance will ensure consistent
management, cohesive policies, guidance, processes and decision rights for a given area of
responsibility, and proper oversight and accountability. Good governance will also help prevent silos
of CX activity and ensure cross-enterprise collaboration. For further details see "How to
Operationalize Your VoC Program."

Analyze and distribute the data to the individuals and departments that can take action. VoC
programs are a powerful way to collect information to feed innovation and drive operational
efficiencies. Pick the top two or three areas that will be the initial points of focus. Engage your top
customers to validate areas that are going well, and discuss areas that need improvement. Discuss
the changes you are planning to make and how those changes are expected to impact them. By
"closing the loop" you are establishing yourself as a supplier that listens and acts on feedback. This
is a vital step in building a loyal customer base, creating trust and driving ongoing improvements to
the customer's experience. Ensure your supply chain responds to both satisfied and dissatisfied
customers.

Intel is an example of a company with a long history of using VoC to create new solutions and drive
improvement in customer experience, with a particular focus on supply chain improvements. Intel's
Customer Excellence Program (CEP) is a structured process for obtaining independent customer
feedback on the quality of its products, services and relationships. The output from the program
provides key customer insights into every function in the company. A key component of the
program is the annual VoC survey. Intel's supply chain is part of the services section of the overall
annual CEP survey, which focuses on questions pertaining to the overall supply chain, returns and
product change notifications. If customers rate Intel's overall supply chain experience as excellent
or very good, then it is considered "Top 2 Box." The goal is to achieve Top 2 Box 80% of the time.
Intel uses the survey feedback to validate that the work done over the past year has been valuable,
generated new ideas for improvements and addressed high risks on customer commitment and
retention (see Figure 3)

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 Figure 3. Intel's Customer Excellence Program

Source: Gartner (June 2018)

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 Obtaining survey feedback is only one part of the overall process. Representatives from each
functional area, supply chain and region work together throughout the year to understand feedback
from customer visits, sales and marketing partners, and regular day-to-day communications. This
helps with early detection of risks to CEP performance, and helps Intel to proactively mitigate
issues. The company also holds formal feedback sessions with customers so they are aware of
actions taken to evaluate and address their feedback, both in the short and long term. By collecting
quantitative and qualitative data, and creating closed-loop interactions with customers, Intel can get
at the heart of customer value and drive measurable differences in performance (see "Supply Chain
Brief: It's Time for Supply Chain to Get Skin in the Game With Voice of the Customer").

Expand Supply Chain Metrics to Incorporate Several Measures of CX

How will you assess if the changes you are making as a result of the VoC feedback are driving
improvements in the overall customer experience? Most supply chains traditionally focus on
measuring the quality of service at the right cost — and for good reason. In survey after survey,
customers say that above all, they value the delivery of the core promised product or service at the
right level of quality. Consistency, completeness, timeliness and reliability in meeting basic
expectations all underpin a great customer experience. Examples include on time, in full (OTIF),
OS&D (overage, short, and damage) and invoice accuracy. But even the perfect order, although
critical, has its own problems, not the least of which is that you can have 100% perfect orders and
still have unhappy customers.

Responding to direct customer feedback and measuring performance are part of the evolution of
overall supply chain metrics that accompany a progression in maturity As supply chains mature,
they expand beyond perfect order metrics to develop an understanding of customer experience. To
do so, supply chain needs to engage with customers to a greater degree, and develop solutions to
issues/gaps that go beyond delivering product complete and on-time (see "Beyond the Perfect
Order: Measuring the Customer Experience of Your Supply Chain"). As supply chain engages in
gathering VoC feedback, it gains greater visibility into the customer's perspective into how
individual customers define excellence in customer experience. Thus, success in VoC initiatives
should be reflected in the measure of the overall customer experience.

The most used measure of customer experience is customer satisfaction, as shown in Figure 4.
Note that the supply chain "quality" metrics of on-time delivery and product or service quality rates
are also included. The point is that no one single metric can measure the overall CX, and leaders
should combine outputs from VoC with additional CX metrics — and use this information as input to
the design of supply chain processes and services.

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 Figure 4. Most Commonly Used Metrics for Measuring Customer Experience

Source: Gartner (June 2018)

Gartner Recommended Reading

Some documents may not be available as part of your current Gartner subscription.

"Supply Chain Brief: Customer Experience and Supply Chain Customer Service — What's the
Difference and Why It Matters"

"How to Successfully Scale Customer Experience Initiatives in Your Supply Chain"

"How to Operationalize Your VoC Program"

"Ignition Guide to Designing and Deploying Best Practice CX Surveys"

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 "Supply Chain Brief: It's Time for Supply Chain to Get Skin in the Game With Voice of the
Customer"

"Supply Chain Customer Centricity Part 1: Leadership Alignment and Capability Development"

"Supply Chain Customer Centricity Part 2: Leverage Personas and Journey Mapping to Understand
and Design the CX"

Evidence
1 The 2018 Gartner CEO and Senior Business Executive Survey. Gartner conducted this research
September through December 2017, in order to examine CEO and senior business executive views
on current business issues, as well as some areas of technology agenda impact. In total, 460
business leaders were qualified and surveyed. The bulk of the research was conducted via
telephone interview (333), an additional 123 surveys were achieved online, and four were self-
administered paper surveys. All respondents were screened for active employment in organizations
greater than $50 million in annual revenue.

The 2017 CEB State of the Customer Experience Function Survey included 33 companies from
across multiple industry sectors.

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