The customer feedback loop is a term that you may have heard before. But what is it?
More and more companies are turning to a customer-centric strategy to differentiate themselves from the competition through the customer experience. The approach focuses on placing the customer at the center of the business, which means closing the feedback loop.
While surveys like NPS, CSAT, CES, or market research can be valuable tools for understanding your customer base, each comes with its challenges. For companies struggling to achieve high enough response rates, this raises statistical validation issues based on sample size, making the data collected less actionable. A comprehensive data asset management strategy fosters trust, minimizes risks, and empowers businesses to harness the full potential of their customer data.
For this reason, more and more companies with a voice of the customer programs have focused on listening and trying to close the feedback loop by listening to their needs.
What is the customer feedback loop?
Businesses get customer feedback from all directions. Conversations with sales and support team members occur every day. The challenge is to gather this information, track it for meaningful insights, use it to inspire action, and get back to letting the customer know that the company made a change based on that information.
What constitutes the customer feedback loop is collecting information through a customer feedback system, circulating it throughout the company to inspire action, and relaying that action to the customer to see the benefits and receive even more value from its products and services.
Importance of closing the feedback loop
The main reason customers switch brands is because they don’t feel valued. The customer feedback loop is important because it shows that your company listens and responds to customer needs.
Customer feedback flows throughout the company to any department that impacts the customer experience, such as:
- Product & engineering
An internal loop is also essential as it avoids gaps between departments and prevents a lousy customer journey by unifying a single source of truth across all departments.
- The external customer feedback loop refers to the path from customer feedback to the company’s final response based on action taken from the input.
- The outer cycle feedback loop is vital because it shows your client that you are listening actively, that your company cares, and that you are committed to making the requested changes.
How to close the customer feedback loop
Develop an internal and external customer feedback loop. The inner customer feedback loop refers to the communication cycle of NPS surveys, or the feedback given to teams that deal directly with the customer, such as support and sales, and shared to all company departments to drive business decisions.
For example, the sales team receives information about the pain points that potential customers want to solve with the product and transmits that information to the marketing teams to inform the messages and positioning. They also pass that information on to the product team, who use it to better resolve those specific pain points in the product.
The marketing team gets positive feedback from an NPS survey for possible case studies or identifying customers who can give us a good review. The support and customer success teams receive feedback from critics. And in the same way, liabilities are analyzed to see how they can improve and make customer experiences better.
We see that all teams have access to customer feedback in these examples. We don’t see isolated departments making decisions based on their research, fragmenting the customer experience.
The customer feedback loop process
Besides the feedback loop within the customers, it’s of vast importance to implement a feedback process within the company too.
It is essential to use customer feedback tools that allow data to be aggregated into a single source of truth across all departments for all of this to be possible.
1. Make sure all team members know the process from the beginning.
All the employees and managers need to acknowledge the company’s goals, values, and mission to be involved in a functional feedback process. It will provide them with confidence and a sense of worth, translating into precise and valuable feedback for the company. Being aware of the consumer behavior will turn them into an asset for the business.
2. Pay attention to trends and insights behind the data.
While data collection is crucial for the success of a customer feedback loop, it’s essential to analyze the participants’ behaviour around these results. In every social environment, including the workplace, there are trends and patterns that can provide us with insights about who participants are and what can be done to improve their experience.
To close the feedback loop, it’s essential to come back to the starting point with the new information to determine what needs to improve, change, or disappear and what should be kept and implemented within the organization. Honesty and openness are crucial for the success of a feedback loop.
4. Open the door to employees for opportunities and action-taking
A successful customer feedback loop can result in more than a better workplace culture and a better employee experience. It can open the door to employees to make decisions and take action for the company’s overall growth within the customer experience. In addition, better communication creates better performance and motivates employees.
Feedback loop examples
The external feedback loop refers to the customer giving that feedback and then receiving some information from the company that their feedback has been heard and the company has taken action.
It is not simply a matter of saying “thanks for the opinion”. It’s about a genuine response that shows your customers that you care about what they have to say and that you’re willing to use that feedback to drive change.
For example, the help desk will release a new product requested by several customers. While there will be a new extensive marketing campaign and blog post of product features, the support team personally communicates with requesting customers so that they can make use of the features they want.
In short, the internal loop serves to improve the product or service by disseminating customer feedback throughout the organization. In contrast, the external loop lets the customer know that the product or service is better than before. Customers can not only enjoy the best product or service but also know that your company listens to them and takes action.
Fortunately, a closed-loop system helps you react quickly to customer feedback and understand their experiences directly from their perspective.
Closing the customer feedback loop helps you ensure that feedback is delivered and executed internally to provide the right insights to the right teams to make the best decisions for customers within their respective departments.
It also helps the customer know that their opinion has been heard and that a change has occurred. Establishing customer feedback loops doesn’t set you apart as a customer-centric company; it also keeps them happy by engaging them in a dialogue about positive change and action based on their needs.