Before 2019, companies faced challenges in adapting to the dynamics of their environment to improve their prospects. Therefore, if you want to be successful in business today, having a great product or service is no longer enough. You must embrace digital transformation while leveraging insights into customer listening as the critical keys to sustaining success and remaining competitive.
Customer feedback is not an arbitrary formal process, and no one genuinely desires to complete your post-purchase form. Customer feedback is an underutilised treasure trove of information that can significantly enhance your entire business, encompassing product development, marketing, customer support, and brand equity.
What is Customer Feedback?
Customer feedback consists of the opinions, thoughts, suggestions, and experiences that customers willingly provide regarding a company’s products, services, or brand. People can provide feedback in several ways; for example, through surveys, online reviews, social media comments, directly through emails and messages, and also through customer support communication. Similarly, user-generated content, feedback options available within the program (i.e., in-app feedback), and input from community forums are considered.
Let’s take a look at why customer feedback may be more valuable than you think, and how you can capitalize on it.
1. Feedback Reveals What Customers Want
One of the best reasons to gather customer feedback is to find out what customers are thinking, expecting, and getting frustrated about when using your product or service. Businesses often make assumptions or conduct internal brainstorming to decide what customers might like. While some assumptions may be well-informed, nothing matches the accuracy of feedback from customers.
A software company might think users want more complicated features when, in fact, feedback indicates that users want it to be simpler and easier to use! All businesses risk putting time and effort into developing something that has no value to the user, or perhaps worse, distances users from their solutions.
2. A Low-Cost Source of Business Intelligence
Market research, in any of its forms, is typically prohibitively expensive, time-consuming, and logistically complicated. With focus groups, interviews, and multi-person survey methods, the cost of gathering information is greater. Gathering direct feedback from customers is a low-cost source of information.
Suppose it is an email questionnaire survey, customer service notation, social media comment, product review, or interview. In such situations, companies have various ways to obtain valuable and timely data with minimal effort and cost. Additionally, much of this information is provided “organically” by customers. Customers often share their feelings and thoughts without being prompted, and this information is highly actionable. Businesses that track and analyze review data alongside other feedback sources gain even deeper insights into customer preferences and expectations.
3. It Leads To Improvements To Products And Services
Product and service development should not happen in a vacuum. The most innovative companies typically leverage customer feedback to hone in on what features to refine, what pain points to resolve, and what product decisions to validate.
Think for a moment. Who better to critique your product than the people who are using it to achieve their goals every day? If several users are consistently reporting the same issue with a product, it is obvious that your team should view it as a priority to address the problem. If customers are incessantly requesting a product feature, it should be an opportunity to create more value.
To illustrate: Slack, the business communication platform, credits a large part of its product refinement to continuous customer feedback. Slack has even developed open channels of feedback and responds quickly to input, so it can see the product evolve.
4. It boosts Customer Retention
It costs significantly more to gain a new customer than to retain an existing customer, so understanding what drives customer satisfaction – as well as dissatisfaction – is essential.
Customer feedback can provide insights into early signs of potential churn. For example, when a customer tells you they are unhappy or expresses frustration over a product or service, it allows your team to intervene before they leave. Correcting some of these complaints promptly tells customers they are important to you, which will lead to brand loyalty.
Best of all, when customers see you value their feedback, you increase the chances of them becoming repeat buyers and brand champions.
Insight: Creating a feedback-driven culture creates trust – and trust is paramount to customer retention.
5. It Drives Marketing and Brand Storytelling
In terms of marketing efficiency, it all comes down to this: your customers are the best marketers when they’re happy. “Feedback,” including testimonials, reviews, and social media mentions, can eventually become heavily leveraged marketing assets. Research proves potential customers have a greater degree of trust in peer reviews than branded messages. Positive feedback translates into social proof for your product and is most likely to yield conversions. In contrast, all forms of feedback can establish the accountability of your brand and show that you are committed to doing better.
Use your feedback to:
• Pull testimonial quotes on your landing pages
• Create case studies
• Describe changes you’ve made according to customer suggestions
• Create user stories for social platforms
Pro tip: Cultivate reviews and UGC because UGC builds authenticity while reviews build credibility for your marketing.
6. It Creates an Innovation Feedback Loop
Innovation is not always about disrupting entire industries. At the same time, sometimes the more meaningful innovations come through minor iterative adjustments, as that may be the easiest innovation for your customers.
The feedback offered by your customers is a valuable map for your future, pointing to things that you have not considered in the past. For example, if customers called out a slight change in user experience (UX)—even if the change was small —it resulted in a positive increase in customer satisfaction and overall engagement. This feedback change is related to how this may impact your engagement with customers. There is a chance that if your team didn’t have feedback from your users, you might have NEVER considered or focused on opportunity areas like these.
Why this is important: By always respecting feedback, you will develop a culture of continuous improvement that creates innovation, responsiveness, and flexibility—all very critical traits in a hyper-competitive market.
7. Elevates Customer Experience (CX)
Customer experience is now the most significant differentiator across industries. Studies show 86% of buyers are willing to pay more for a great customer experience. And how do you know if your experience is excellent? Feedback.
Customers are the best measure of your CX. Your customers have experienced your support interactions, purchasing processes, etc., and feedback will reveal where friction lies, what portions of the experience confused customers, and what aspects delighted customers.
For example, if customers find your website difficult to navigate or your support team unresponsive, feedback will uncover the weak spots in your customer experience. On the other hand, if customers rave about your fast shipping options or helpful support agents, you understand the aspects of the experience that were working and need highlighting.
Strategy: Take the information in feedback and diagram a CX that shows positive touchpoints and negative touchpoints.
8. It Cultivates Customer Loyalty and Engagement
When customers feel their feedback is valuable, they’re feeling valued and engaged. Asking for feedback isn’t solely about gathering data. It’s about building a two-way relationship; finding a way to earn and give respect.
Responding publicly to feedback shows humility and accountability to customers, and it emphasizes their role as collaboration partners rather than just customers.
This new connection creates a greater emotional connection and, as a result, more loyalty.
As noted, engaged customers are also more likely to give more sincere feedback and are more likely to act as beta testers, early adopters, or evangelists for a product.
Remember: “Customers who feel heard will be your loudest advocates.”
9. It Identifies Customer Segments and Personalization Opportunities
Not all feedback is the same. By looking at feedback from customers who fall into different clusters (eg, location, purchase timing/frequency, demographics, etc.), organizations can identify different patterns and personalize offerings based on those segments.
For example, your European customers may prioritize eco-friendly packaging while your North American customers prioritize fast delivery. With feedback, you have the insight to understand those preferences and how to adjust your messaging across the groups.
Potential Use Cases:
- Segment feedback data by persona
- Create region-specific messaging or features
- Provide tiered loyalty programs considering individual customer priorities
Overall, you have more informed customer relationships and are much more likely to realize a meaningful ROI from your personalization efforts.
10. It increases employee morale and employee training
Feedback is not just for customers; it can also help you inside your company. Knowing that customers recognize your support team, or even a specific employee, for their hard work can have a significant effect on employee morale. When employees are recognized positively, it reinforces that behavior and helps you identify employees who excel.
On the other hand, if the feedback reveals service problems, using customer feedback will undoubtedly provide an opportunity for more targeted training and improvement of procedures.
Best practice: Regularly share feedback across the entire organization, i.e., product, support, sales, and marketing teams, to keep them connected to the customer and feeling inspired to improve their output.
11. It Acts as an Early Warning System
Customer feedback can enable you to identify trends—positive or negative—before they become problematic. A sudden uptick in complaints related to some systemic issue may indicate a breakdown in your supply chain, a defect in your product, or a bug in your software.
Being able to identify issues sooner rather than later can save you the headache of brand damage, loss of customers, or dealing with expensive fixes. Feedback allows your business to be proactive instead of reactive.
Example: Airlines often follow social media and customer support channels during weather events so they can find out about real-time issues and be able to respond quickly to passenger concerns.
12. It’s a Competitive Advantage
Many companies still treat feedback collection as a tick box on their checklist. Companies that listen and follow up with feedback regularly will be better off and ahead of their competition.
When your brand can be labelled as one that listens and responds to feedback, that gives you differentiation, it shows customers you care, and gives a reason to buy from you over the competitors.
Even better, the feedback doesn’t just help you respond to complaints; it will help you anticipate the need. As a result, you will be more nimble and future-looking.
Remember: You are only a click away from competitors. So take that opportunity with feedback and make a difference!
How to Make the Most of Customer Feedback?
Getting feedback is just the beginning. To capitalize on feedback, your business needs to institute systems that capture, Analyze, act, and provide the loop closure.
It requires:
- Make it easy: Use scaled surveys, feedback buttons/links/QR codes.
- Timing: Schedule surveys right after purchasing, or post support chats, or post-usage when the customer is less engaged.
- Analyze it qualitatively as well as quantitatively: You can tap into information technology tools, apply sentiment analysis, or manually code the feedback in search of trends.
- Act on it: Place the insights into your product roadmaps, marketing roadmaps, and support roadmaps.
- Close the loop: Let your clients know what you are doing in response to their feedback. It is invaluable and drives increased response rates from customers, as well as loyalty!
How to Analyze and Act on Customer Feedback?
Collecting feedback is only step one; analyzing and acting on it is the real work here:
Learn how to prioritize based on the most critical feedback.
- Categorize and identify theme groups like feedback, and identify commonalities and themes.
- Quantify uses scale and gauge segmentations, such as NPS and CSAT, to quantify sentiment.
- Investigate and understand the details of the feedback to identify the “why”.
- Create and implement an action plan that outlines who will do what and when for the feedback items.
- Communicate and follow up on changes. Communicate back to customers what has changed, if any, after implementing feedback, and solicit additional feedback.
- Encourage cross-agency collaboration, and encourage areas to share what they learned based on the feedback they received.
Future customer feedback: AI and beyond
There are several ways in which customer feedback is evolving as a result of AI and machine learning. Some of these ways include:
- AI-Driven Analysis: Through the use of AI tools, you can analyze large amounts of data to visualize trends and patterns.
- Real-time feedback loops: Feedback systems will be developing into ecosystems that deliver real-time or near-real-time feedback or alerts.
- Omni-Channel Feedback Collection: Feedback management software will likely have the ability to collect feedback from many different channels centrally.
- Predictive Analytics: Similarly, AI can forecast future behaviors and needs proactively.
- AI chatbots: Many organizations are also using chatbots to gather customer feedback in a real-time interaction.
Final thoughts
Customer feedback is not just an optional aspect of doing business; it is a crucial component of a strategic plan. Gathering feedback provides businesses with direct insights from their most important stakeholders: their customers. This feedback enables businesses to identify unmet needs, innovate new solutions, enhance customer retention, and create memorable experiences.
In the end, feedback offers a sustainable path to growth. Many companies are lazy when it comes to feedback, treating it more as a function rather than seeing the real potential in it. Moving forward, in a truly customer-driven era, the companies that listen to users, learn from users, and act on feedback will continue on their path of success! The most innovative companies are those that put feedback into action across departments as a part of an ongoing cycle of improvement. So don’t just hear your customers: listen to them, and let their voice add to your success.