To my surprise, I got a response from the restaurant team within 15 minutes! This was an evening order by the way — so this meant that their team was looking at feedback even at night. They calmly addressed my issue and asked for my suggestions for improvement. They also offered to sponsor a dinner for me to make up for the one that didn’t go so well. Trust me — after the desserts, I had already made up my mind to never order from here again and to spread the word amongst my friends too. But one unexpected phone call changed it all.
These incidents happen to all of us and our instinctive reaction is to complain as quickly as possible. We want to rant and after giving feedback to the restaurant (sometimes even before), we begin ranting out and writing negative comments online - on Zomato, TripAdvisor, Twitter, Facebook - basically everywhere.
What happens though when businesses respond back? When they apologize and actually fix the issue? When they ‘Close Feedback Loop’? We change. We feel a sense of loyalty and love and it really makes us want to give them a chance and recommend them. That’s the power and that’s the beauty of closing the feedback loop.
Look back and remember all the times when a company from whom you had big expectations, failed you, but then found a way to reach out to you. How did that make you feel?
In this article, you'll get to know about the Customer Feedback, the Feedback Loop, and guide you through some strategies about how you can Close the Feedback Loop to improve Customer Satisfaction.
What is Customer Feedback?
Customer Feedback is customers’ opinions and perceptions about the business — your products, services and brand. Customer Feedback may not always be right — but it is what customers perceive and think and feel about you and it’s always important.
But how do you get feedback?
With social media, feedback will come to you anyway. But a better way to get Customer Feedback is to seek it — ideally by using a Customer Feedback Software — that helps you customize surveys and get real-time feedback from customers at various touch points.
In cases like mine, it gives a platform to share bad experiences directly with the business instead of taking the frustration out elsewhere, which could actually harm the business reputation.
Imagine in my case, if I had received an SMS survey an hour after my meal was delivered — I would have definitely left a feedback there. But when I share my feedback directly with the company, I expect them to respond to me. They asked for it — in my mind, I am assuming that they’re actually listening and will take some action. That action would be ‘Closing the Feedback Loop’.
What is Closing Feedback Loop?Closing the Feedback Loop is a process where businesses respond or react to Customer Feedback and directly or indirectly address all the issues or concerns of the customers providing them with solutions to help change their perception. Closing the Feedback Loop is not only restricted to negative and bad feedback — addressing good feedback, displaying gratitude to happy customers is also a part of Closing the Feedback Loop.
By reaching out to customers regarding their feedback, you help change their perception about your company and brand before they churn. Like in my case, I will give the restaurant another try for sure!
Why do you need to Close the Feedback Loop?
Closing the Feedback Loop is very important from both business growth and customer engagement perspective because when you close feedback loop at the positive note it may bring back your dissatisfied customers and may turn them to your loyal customers. This, in turn, improves your business growth. Let’s explore this deeply.
- Dissatisfied customers speak louder than satisfied customers
According to the survey published in The Ultimate Question, 80% of the Negative Word of Mouth comments came from dissatisfied customers who didn’t get responses to their feedback. So, addressing the concern of the customers and closing the feedback helps you to keep your brand away from defaming.
- A large number of dissatisfied customers will cut down Sales & Profit
The revenue and profit of your business are correlated to the growth of your business and your business will grow only when you as a brand yield maximum satisfaction to your customers. So, if you ignore your unhappy customers, they will churn out of your business and this can drastically lower your sales and profit.
According to Forbes, 51% of customers will either spend less on your brand or will simply be churned. In this scenario, usually businesses acquire new customers which costs 5 to 25 times more expensive than retaining the existing one. So, close feedback loop with dissatisfied customers and retain them to improve business profits.
- Closing Feedback Loop helps turn dissatisfied to satisfied customers
Dissatisfied customers are likely to churn quickly and switch on to the other brand. Not only this, they even spread the bad word of mouth for your brand with their friends and relatives. So, the first step to make your unhappy customers loyal is to keep a check on the Customer Churn Rate of your business.
Customer Churn Rate refers to the percentage of customers that stopped using the product and services of the customer during a certain period. Higher will be the churn rate more will be the disloyal customers and lower will be the business growth.
Taking Customer Feedback helps you to quickly identify your unhappy customers. But, you can convince those unhappy customers and make them happy by following up with them and ensuring solutions to their concerns. This helps you to close feedback loop effectively.
50% of dissatisfied customers are likely to churn within the next 90 days and 95% of dissatisfied customers will give businesses a second chance and 11% would avoid churning out if they are addressed quickly and provided with the best solutions of the concern.
The Feedback Loop Structure
Feedback Loop System works efficiently to address every query of the customers, provide them with the surefire solutions, and encourage them to become loyal to the brand. So, let’s dive into the strategic system of closing the feedback loop.
Ask your customers to give feedback about your products and services. This helps you to quickly identify customer concerns that keep them away from your products and services. Taking Customer Feedback regularly can help you to understand the overall customer satisfaction and experience trends over time.
Divide customer feedback into different buckets as per their nature. A well synchronized and systematic arrangement of customer feedback can help you to look after every feedback carefully. Further, you can easily distribute the feedback to the team as per their respective nature.
For instance, If you segregate the customer feedback into the three different categories:
- Product Feedback - This category helps you to look at every aspect of the products like major & minor product bugs.
- Customer Service Feedback - This category will look at feedback related to customer experience, satisfaction, and loyalty.
- Marketing & Sales Feedback - This category will look at feedback regarding customer support services. Like feedback for gauging the level of customer effort.
Similarly, a great to way segregate your feedback is to look at Positive, Negative and Neutral feedback and act on each of the feedback types differently.
Take action on the feedback quickly. Since you’ve segregated the customer feedback as per their nature. Now it’s time to distribute or share feedback to the teams according to their nature. Like other companies, you can also share the customer feedback to your team at set intervals like on a daily, weekly, or monthly basis. Analyze the issues raised by the customers in the feedback and discuss internally and plan follow-up strategies to ensure surefire solutions to their concerns.
- Follow Up
Follow-up your customer & close feedback loop. This is the main game-changer that determines whether your customers will stay with your brand or will churn out of your business? If you are getting feedback from your customers, you should quickly give the response to the customers. If they don’t get the proper response, they will simply leave your business and defame you.
A UK customer experience group found that 43% of customers don’t give feedback because they don’t think the business cares. So, tell your team members or customer support representatives to follow up with their customers and close feedback loop at the positive note.
Closing Feedback Loop for Improving Customer Satisfaction
When it comes to delivering an improved level of customer satisfaction, you need to understand your customers’ sentiments. For this, you can ask the open-ended survey questions from your customers and continue to implement the changes based on the feedback data and solve their issues. To improve the customer satisfaction, first segregate your customers into 3 categories - Dissatisfied, Neutral, and Satisfied and then act on each of them differently to close the customer feedback loop.
So, here we have listed down the ways to follow-up with each customers and also outlining the best practices to close the feedback loop.
Dissatisfied Customers: Delight them
Dealing with dissatisfied customers is an unpleasant experience for a business because changing the mindset after the bad experience is a tough challenge. Closing feedback loop with them is very hard but once you are able to convince them they can do business with you again. 70% of dissatisfied customers will do business with you again if you fix an issue they’ve complained about.
While addressing your unhappy customers, keep one goal in mind that you have to change their perception of the brand and build their trust again. Admit your mistakes and show them that you are concerned to fix their issues.
Like in my case, to change my prior experience about the restaurant, the owner has admitted his mistake and lured me with a free dessert and lunch incentives to improve my perception for the brand. And while I know exactly what he's trying to do — but as a customer, it really does work.
To close the feedback loop with your dissatisfied customers:
- Connect with them personally — Take your follow-up conversation in an offline mode. You can contact them personally through call or by personal emails.
- Ask them Follow-Up Questions — Ask them various engaging follow-up questions like what is the thing that they couldn’t find in your products and services? Ask them to outline the solution they want from you — like how can we make it better? These questions will enable you to access quality data that helps you to identify your weaknesses and threats associated with your products or services and opportunity to improve it.
- Offer Free Takeaways — Finding surefire solutions for the customers is not enough. You need to delight your unhappy customers with the improved level of customer experience. For this you can provide free takeaways:
- Extensive product or service guide
- Extension of the free trial
- Premium features of product
Neutral Customers: Don’t let them churn
Neutral customers are satisfied but have no enthusiasm and loyalty for your brand. They are actually passive in behavior, who neither promote your brand, nor defame it. Since your customers are neutral, there will be zero impact on your business. But if you look the same with regards to competition, neutral customers are vulnerable to the competition.
So, it is important for a business to turn neutral customers into satisfied customers before they get churned out of the business. Follow up with the neutral customers before they make the final choice and engage with them to delight them.
To close the feedback loop with your Neutral Customers:
- Give Discounts & Upgrades — Something that prevents your neutral customers from becoming your happy customers is the activation barrier. To reduce this barrier and engage with your neutral customers, you need to make them settle by luring them with some exclusive offerings like upgrades or exclusive discounts on subscriptions.
- Offer other Support Materials — From your end, you can provide your customers with other support materials like extensive product or service guides, an extension of the free trial, and some premium features to change their perspectives.
Satisfied Customers: Show gratitude
Satisfied customers are happy from your products, services, brand, or business. They are loyal to your brand and likely to spread positive word of mouth for your business in the form of testimonials, references, online reviews, etc.
Due to a mindset that the happy and satisfied customers are already a profitable segment where no efforts are required, we usually ignore and take them for granted. In doing so, we are actually missing out some valuable insights and opportunities to strengthen the customer relationship and improve the business growth.
Here’s how you can close the feedback loop with your Satisfied Customers:
- Express your gratitude with thanks note — If your customers are investing their time in giving positive feedback to you or working as brand promoters, then you should also give them something in return. A study by Rockefeller Corporation states that 68% of customers turn their backs on companies because they feel unappreciated. So, show the expression of heartfelt personal appreciation to your customers by sending them a personalized “thank you” message or an email. You can also treat your customers with a promotional badge to make them feel special.
- Offer personalized takeaways — Happy customer segment is the perfect group where you can fearlessly up-sell or cross-sell your products and services. You can offer them some upcoming premium features of your products and tell them potential benefits of it.
- Ensure Customer Loyalty Programs — Offer customer loyalty programs like Referral Program to appreciate your customers’ efforts for sharing positive reviews and recommending your product or services to their friends and family.
For example, as a part of their referral program, Dropbox credited their future payments to referrals. Apart from referral, it offers free storage when a new customer signs up via referral link.
So, when you close feedback loop with the Dissatisfied, Neutral, and Satisfied customers, this ensures you with the various business benefits like:
- Convert dissatisfied and neutral customers to satisfied customers.
- Strengthen customer relationships.
- Improves customer loyalty.
- Reduces churn rate.
- Improves business revenue and profit