Working to close the customer feedback loop is an ongoing strategy for improving customer satisfaction and CX. By constantly talking with your customers about where you can improve, and by implementing and communicating these changes, you can work to reduce your churn rate and earn an increasingly loyal customer base.
What is the Customer Feedback Loop?
The customer feedback loop is the continuous relationship between a company and its customers. A company launches a product and collects feedback from its customers, analyzes and implements that feedback, which in turn prompts more feedback and then more changes based on this new feedback, and so on and so forth. Customer needs are constantly changing, so continuous communication is essential to make sure a product fulfills those needs.
Why is Closing the Customer Feedback Loop Important?
Closing the customer feedback loop is important because it reduces customer churn and boosts customer acquisition. Churn refers to the number of customers that a company loses over a period of time. To achieve sustainable growth, a company needs to first establish a low churn rate by building a base of repeat customers. Having to constantly rely primarily on new customers will quickly suck away any marketing budget.
Closing the customer feedback loop permanently isn’t actually possible, which is the whole point of the program in the first place. It’s not an end goal to achieve, but rather a continuous process to improve which places the customer experience at the center. Feedback helps get to the root of how you can improve your product and expand the depth of its appeal.
Through the feedback loop, you’ll be able to find out why some people love your product and what holds others back from loving the product. You can increase customer happiness by creating more loyal fans who subsequently refer their friends, while also reducing churn by figuring out what drove a customer away from your product.
These insights can then be passed on to the front line to drive action and change within the business. By prioritizing CX through a customer feedback loop, companies can reduce churn.
3 Steps for Starting Your Customer Feedback Loop
If you’re a frequent visitor to our blog, then you’ve likely seen these steps before (our piece on customer feedback analysis for example). That’s because almost any CX program relies on these three basic principles. However, there are many different ways that you can ultimately use these steps to flesh out your understanding of your customer, such as creating a customer journey map or identifying your voice of the customer. Here’s how it works for customer feedback loops.
Step 1: Gather Customer Data - To start a customer feedback loop, you of course need to first gather customer feedback. Depending on your business types, there are a variety of effective ways to do this. Some of the most common include:
- Customer service call recordings
- Chatbot interaction transcripts
- Site behavior like bounce rate or abandoned carts
- nline review sites
- Gathering social media comments and DM’s
- Running polls on social media
- Sending out feedback surveys
- Conducting focus groups
- Website Feedback Widgets
A combination of these methods, depending on your budget, is best to get a well-rounded view of customer interactions, likes, and dislikes.
Step 2: Analyze the Feedback - Once you have your feedback you can start to examine it for trends and insights into what’s working for your customer and what isn’t. For example, you may notice that a certain product has a high abandoned cart rate. When combining this data with feedback you collected via surveys, you may realize that your competitor recently launched a similar but cheaper version of your product or that a prominent influencer recently gave it a negative review.
Analyzing customer feedback is easier said than done, so be sure to check out the following guides to make sure you’re drawing accurate conclusions from your data.
- Our guide on coding qualitative data will walk you through the steps of transforming written customer feedback into numbers that can be analyzed
- Our guide on survey data analysis explains how to combine demographics and data for deeper insights and how to make sure your sample sizes remain statistically significant
Step 3: Implement Changes Based on Trends - The last basic step of closing the customer feedback loop is to improve your products and services based on the trends you’ve identified from your customer feedback. When you start analyzing feedback captured from each section of the customer journey, you’ll notice themes emerging within the feedback. Maybe your checkout process is unclear or a certain item is faulty and you need to remove it from the product line. Crucially, what matters is that you’ll be able to identify actionable insights to drive change in your organization.
When deciding which actions to prioritize, you can use customer feedback along with other sources of data to segment users, for example, paid vs free plans or customers located in Germany vs South Korea, in order to evaluate which changes will have the greatest positive effect. You can build your plan upward from there. Remember, the customer feedback loop is an ongoing process so you’ll constantly be updating and refining your services.
If you’re doing manual data collection and analysis, you should aim to implement changes on a regular basis, perhaps monthly or quarterly depending on your team’s bandwidth. Another option is to consider a customer experience tool that will automatically gather feedback and analyze the data for you using advanced text analytics capabilities.
Closing the Feedback Loop for Each Type of Customer
Because many companies use NPS (net promoter score) as their standard CX measurement, we’ll discuss closing the feedback loop for each type of customer based on their NPS score. You can learn more about NPS and other customer satisfaction metrics in this guide.
How to Deal with Promoters
Brand promoters are customers who land on the 9-10 range on the NPS scale. They’re very satisfied or even thrilled with their experience and won’t hesitate to recommend your brand to others. Though promoters are the easiest types of customers to deal with, don’t make the mistake of thinking that the customer feedback loop is closed for them.
Promoters make up the most valuable core of your customer base, so don’t take them for granted and make sure to always show your appreciation where you can. You can do this by rewarding them for their patronage through personalized birthday or holiday gifts, exclusive deals and discounts, and access to early-bird specials or beta testing of a new product.
You should be communicating with your promoters frequently and continue to gather feedback on what they’d like to see change with your business, and these changes should be prioritized above all others. Depending on the structure of your company, you can also ask promoters for referrals to identify new long-term customers as well.
How to Deal with Detractors
Brand detractors are current, or more likely, former customers who land in the 0-6 range of the NPS scale, meaning they are not likely to recommend your brand to others. Though difficult to re-engage, you should take note that detractors were likely invested in your brand before they churned. Only a high level of disappointment or frustration would motivate someone enough to leave a negative review.
The best way to reach back out to a detractor and get the customer feedback loop started again is through a personal approach. No automatic “we’re sorry to see you go” emails, no scripted phone calls. Have an actual human member of your customer service team reach out with a personalized message to show that you really are sad they had a bad experience.
If they respond to your outreach, you should work closely and diligently with them to solve their issue and show how you will prevent this from happening again. Along with your initial message, you can of course also include discounts and extended premium trial periods to try to entice them to come back and give you another shot.
How to Deal with Passives
Passives fall on the 7-8 range of the NPS scale and are the trickiest group to close the customer feedback loop with. Because passives lack the excitement of promoters and the investment/frustration of detractors, they’re particularly vulnerable to competitors. If there’s a better deal to be found somewhere else, there’s nothing to keep them tied to your brand.
To get ahead of this potential for churn, engage with passives as often as you can (without being annoying) to show them updates to your company and product range, cool events you’re hosting, new thought leadership or whitepapers you’ve published, exciting publicity you’ve received, or anything else that would pique their interest and get them just a little bit more invested in what you do.
Everyone loves free stuff, so in addition to frequent communication, you should offer them plenty of free samples and larger discounts to encourage them to give your products another look. By demonstrating how excited you are to have them as a customer, you can get them excited about being a customer and encourage a healthier customer feedback loop.
How to Deal with Non-Respondents
The unfortunate truth is that most customers won’t respond to your feedback surveys, which makes it difficult to close the loop with them. Though NPS survey response rates are higher than average (30-40% according to Retently) it’s still tough to realize that you’re not hearing from more than half of your customers. Engagement tactics for non-responders are similar to passives.
The key is to reach out frequently, get them excited enough by your brand to feel motivated to fill out the survey, and offer incentives like discounts or samples in return for their time. Even if you’re only able to convince a few non-respondents, that’s a few more data points you can add to your customer feedback loop and work with to provide an even better customer experience.
Chattermill can help you close the customer feedback loop by providing the means to collect and analyze feedback at scale, freeing up valuable bandwidth for your team to focus on implementation.