Understanding customers and prospects is fundamental to business success. By tapping into customer needs and expectations, businesses can make informed decisions that resonate with their audience. Organisations can gather these insights through various methods, including sentiment analysis, surveys, interviews, behavioural data, etc.. Two primary approaches for obtaining customer insights are Voice of Customer and market research. While both provide valuable perspectives, they serve distinct purposes—VoC focuses on direct customer feedback, while market research offers a broader view of industry trends and consumer behaviour. However, they can complement each other to provide a more holistic understanding of customers.
What Is Voice of Customer (VoC)?
Voice of Customer or VoC refers to the process of capturing and analysing direct feedback from customers to understand their needs, pain points, and preferences. This approach involves the use of real-time feedback to gather actionable insights. Whether it’s identifying service gaps or tailoring product features, VoC ensures that the business can hear the customers’ voices.
Collecting and analysing customer feedback enables businesses to take actionable steps. Businesses can “close the inner loop” of customer experience management by enabling frontline employees to directly and immediately address these individual customer issues. On a broader scale, VoC helps close the outer loop by empowering businesses to implement lasting improvements that enhance the experience for many customers.
To reiterate:
- Inner Loop: Immediate actions to resolve individual issues (ie. a frontline employee addressing a customer complaint).
- Outer Loop: Strategic improvements based on aggregated insights (ie. redesigning a policy affecting many customers).
The goal of VoC is to enhance customer experiences or CX in order to build stronger and more meaningful relationships with customers. By understanding and acting on customer feedback, businesses can foster continuous improvement and long-term success.
What Is Market Research?
In comparison, market research is a broader exploration of the market landscape. It’s a structured process of collecting, analysing, and interpreting data about a target market to understand its dynamics, preferences, and opportunities. It provides businesses with insights into industry trends, competitor strategies, and consumer demographics, helping them make informed decisions to drive growth.
Unlike Voice of Customer (VoC), which focuses on direct, company-specific customer feedback, market research takes a broader, market-wide perspective. It employs various methodologies, including surveys, focus groups, competitor analysis, trend forecasting, data analytics, industry reports etc.It helps businesses anticipate market changes, identify opportunities, and mitigate risks. Aligning business offerings with market demand. In essence, market research is a vital tool for long term sustainable growth in an ever-evolving business landscape.
Core Differences Between VoC and Market Research
While market research and VoC serve distinct purposes, there is significant overlap, particularly in areas like customer segmentation, persona development, and sentiment analysis. Market research often delves into granular details such as demographic data, purchasing behaviours, and psychographics to refine business strategies.
To better understand the differences and similarities between these two approaches, refer to the following comparison.
Focus
VoC is inherently customer-centric and prioritises the needs and preferences of existing customers. For example, an after-school program provider like Junior Adventures Group can use VOC to gather direct feedback from parents to customer feedback. These insights help fine-tune services to better meet customer needs.
Market research, meanwhile, provides a broader perspective and can validate whether these insights reflect broader trends. After identifying a preference for flexible after-school programs through VoC, for example, the company can conduct regional market research to assess if this trend aligns with the behaviours and expectations of parents in different geographic areas. This broader analysis ensures that service adjustments not only meet the needs of current customers but also appeal to potential new markets.
Methodology
VoC employs tools like customer surveys, social listening etc to gather feedback. Latrobe Community Health Services (LCHS) in Victoria, Australia, for instance, utilised real-time feedback systems that increased customer feedback responses by 61%, all while complying with strict healthcare data privacy laws.
Meanwhile, market research like Resonate CX’s Consumer Insights Report utilises methods such as shopper behaviour analysis, , industry trend studies, market analysis, market segmentation and so on. By identifying the retail habits of different shopper demographics, the report is able to offer a breakdown of each group’s shopping behaviours, preferences, and motivations. This information, in turn, can help retailers identify and eliminate common barriers to purchase and understand what an exceptional shopping experience is like for each group.
Download Consumer Insights Report 2024
Despite being presented as distinct approaches, in practice, it’s normal to use both VoC and market research. Organisations frequently combine qualitative methods, such as interviews and focus groups, with quantitative techniques like surveys, data analytics, and trend analysis. This integration allows businesses to gain both deep, customer-specific insights from VoC and broader, market-level perspectives from traditional research, leading to well-rounded, data-driven strategies that ensure existing customer needs are balanced with the market needs.
Outcome
VoC insights are designed for immediate action. It can be used to improve customer satisfaction or refine a product based on specific feedback from buyers and users. The real-time feedback system utilised by LCHS enabled the non-profit health and social services provider to swiftly resolve customer issues and attain an NPS score of +77, which is indicative of a high level of customer satisfaction. More than fixing present issues, however, VoC insights can also influence broader organisational strategies and usher changes that can lead to long-term improvements in customer experience.
Market research, on the other hand, offers strategic guidance that typically applies to long-term goals, such as entering new markets or adapting to industry shifts. Resonate CX’s Childcare Customer Opportunities 2024 report, for instance, can offer practical insights to businesses that are aiming to break into the childcare sector in the near future.
Here’s a summary of their similarities and differences:
| Aspect | Voice of Customer (VoC) | Market Research |
| Focus | Customer-centric, focusing on existing customers’ needs and preferences | Market-focused, examining trends, competitors, and potential customer segments |
| Methodology | Both quantitative and qualitative, using customer surveys, direct interviews, real-time feedback systems, social listening, and sentiment analysis | Both quantitative and qualitative, using competitive analysis, industry trend studies, market segmentation, focus groups, and data analytics. |
| Outcome | Provides insights for immediate action, like improving customer satisfaction, while contributing to long-term impact | Offers strategic guidance for long-term goals, such as market entry or adapting to industry shifts |
When to Use Voice of Customer vs. Market Research
Certain situations call for VoC, while others are better suited to market research. Use VoC when the goal is to understand specific customer experiences, preferences, and satisfaction levels. It captures real-time feedback directly from customers, effectively helping businesses address pain points and enhance customer journeys.
It’s best to use VOC if the goal is to:
- Improve a specific product or service based on user input.
- Track customer satisfaction or Net Promoter Score (NPS).
- Get actionable insights to resolve immediate customer issues (individual level) or optimise customer interactions (organisational level).
Market research, on the other hand, is ideal for understanding the broader market landscape, including industry trends, competitor activities, and consumer behaviour. It supports strategic planning, market entry, and brand positioning.
Market research is ideally used when an organisation aims to:
- Expand into new markets or launch a new product.
- Analyse trends or shifts in consumer preferences across demographics.
- Assess competitor performance and industry dynamics to shape long-term strategies.
Recognising when to prioritise VoC or market research ensures that businesses can effectively address both immediate customer needs and long-term strategic goals.
How VoC and Market Research Work Together
VoC and market research are complementary tools that, when used together, provide a comprehensive understanding of customer needs and market dynamics.
VoC gathers specific, real-time feedback directly from customers by focusing on their experiences, expectations, and satisfaction levels. This helps businesses identify and resolve pain points, improve customer interactions, and deliver tailored experiences. Market research can then provide a broader-level view of the market landscape, which includes industry trends, pricing strategies and competitor analysis. It informs decisions about market entry, product development, and overall business strategy by identifying opportunities and challenges in the broader market.
Effectively combining these two approaches empowers businesses to enjoy the following benefits:
- Deep Understanding: VoC highlights what existing customers think and feel, while market research reveals broader trends and external factors influencing customer behaviour.
- Strategic Planning: Market research defines potential market opportunities, while VoC ensures customer needs are met and improved.
- Refining Experiences: Insights from market research guide product development and branding, while VoC ensures customer experience is top notch.
Together, VoC and market research bridge customer insights with long-term market trends, enabling businesses to make informed, customer-centric decisions. Organisations that effectively integrate both approaches in combined strategies can fine-tune their customer experience while positioning themselves competitively in the market.
Choosing the Right Approach
Voice of Customer and market research each offer unique advantages, making them essential components of a balanced business strategy. VoC provides actionable business insights to enhance CX and address immediate concerns improvements, while market research delivers long-term broader guidance for navigating market complexities. By leveraging VoC and market research, businesses can enrich their CX programs, drive strategic innovation, and refine customer-facing initiatives.
Ready to harness the power of an effective VoC strategy? Explore how ResonateCX ’s customer experience solutions can help you capture and act on customer insights effectively. Visit Resonate CX and watch our demo to learn more. Start your journey toward a customer-centric approach today.
