All About Customer Feedback System: Enhance CX & Drive Business Growth

Understanding and responding to customers’ needs is not just a good practice but a strategic necessity to satisfy your customers and make your business successful. This is why it is essential to gather customer feedback for every business. But getting feedback will not do any good unless you don’t take action on it.

Here comes the need for a good customer feedback system. A well-structured feedback mechanism and customer feedback strategy helps you not only collect customer feedback but also enables you to analyze it, take required action on it, and close the feedback loop effectively.

In this article, we will explore what is a customer feedback system, its importance, and how you can create and implement a well-structured feedback system. Let’s get started!

TL;DR

• Customer feedback system is a structured approach to systematically gather, analyze, and manage customer feedback by taking action and closing the feedback loop effectively to improve customer experiences. 

• It is beneficial for businesses in many ways - it helps you get valuable customer insights, improve customer satisfaction and loyalty, identify business strengths & weaknesses, reduce churn, improve products & services, make better business decisions, and gain a competitive advantage & more goodwill for the business.

• Implementing ACAF customer feedback loop has 4 stages: Ask - asking for and collecting feedback, Categorize - analyzing feedback as positive or negative, Act - taking appropriate action on feedback, Follow-up - informing the customers about the actions taken and closing the feedback loop.

• To create an effective customer feedback system, you should define your objectives, choose a good customer feedback software, create & share powerful surveys to collect feedback, follow the ACAF process, review & and analyze feedback, and follow customer-centric strategies to foster continuous improvement.

• Zonka Feedback is an effective CX tool that can help you develop a robust feedback system, and implement the ACAF process. It also offers a free trial for 14 days. 

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What is a Customer Feedback System?

A Customer Feedback System (CFS) is a structured approach implemented by businesses to systematically gather customer feedback, analyze it and manage it to meet customer expectations. It includes not only collection of feedback but also taking on it to close the feedback loop effectively thus improving the overall customer experience.

A system serves as a crucial mechanism for understanding customer experiences, preferences, and satisfaction levels. The primary goal of the system is to collect insights that can be used to enhance products, services, and overall customer interactions.

Why it is Important to Create a Customer Feedback System?

Creating a customer feedback system is crucial for several reasons, each contributing to the overall success and sustainability of a business. Here are key reasons highlighting the importance of implementing a feedback System.

1. It provides valuable insights from customers - A Customer Feedback System provides valuable insights into the needs, preferences, and expectations of your customers. Understanding these aspects allows you to tailor your products, services, and overall customer experiences to better align with customer requirements.

2. It helps to enhance customer loyalty and satisfaction - By actively seeking and acting upon customer feedback, you can address issues promptly and make improvements based on customer suggestions. This leads to increased satisfaction, fostering loyalty, repeat business and more digital customer engagement.

3. It helps to identify the strengths and weaknesses of the business - Through systematic feedback collection and analysis, you can identify both their strengths and weaknesses. Knowing what aspects of your products or services resonate positively with customers and where improvements are needed enables strategic decision-making.

4. It gives you a competitive advantage - A customer feedback system can be a source of competitive advantage. Actively seeking and taking action on customer feedback demonstrates a commitment to continuous improvement. This commitment can set them apart from competitors and attract customers who appreciate responsiveness and customer-centric practices.

5. It helps to reduce customer churn and improve retention - Addressing customer concerns and making improvements based on feedback can significantly reduce customer churn and improve customer retention rates. By understanding and rectifying issues that may lead customers to leave, you can enhance customer retention and maximize the lifetime value of each customer.

6. It shows that you care for customers’ opinions - Having a complete customer feedback system shows that you listen to the voice of the customers and care about their opinions. It develops trust among the customers and helps to build loyal customers.

7. It enables you to improve products and services - Customer feedback often contains valuable ideas and suggestions for innovation and improvement. You can use this input to drive product and service innovation, staying ahead in the market and meeting evolving customer demands.

8. It helps to make better decisions - The insights gained from customer feedback inform strategic decision-making. Whether it's product development, marketing strategies, or operational changes, you can make informed decisions backed by feedback data and real customer experiences.

Let’s explore how to implement the ACAF feedback loop.

Implementing a Customer Feedback Loop: ACAF

A feedback loop is a process where output from a system is treated as input to get more outcomes. In the customer feedback loop, customer feedback is collected through surveys, and that feedback is treated as input to decide business actions to improve products, services, and the overall customer experiences.

Closing the loop refers to the process of responding to all the collected feedback which involves customer feedback analysis, taking appropriate actions to improve customer experiences, and communicating these actions to the customers who provided that feedback. It is a crucial step in demonstrating responsiveness, building trust, and ensuring customers feel acknowledged and valued for their input.

Implementing a customer feedback loop involves four stages, viz., Ask, Categorize, Act, and Follow Up.

1. Ask

This stage involves collecting customer feedback from the customers. In this stage, you create customer feedback surveys and ask your customers to take these surveys and provide their valuable feedback. You can use various ways to collect customer feedback.

• Offline Surveys - If you want to collect on-premises feedback, you can use offline surveys to seek your customers for feedback. For this, you can use various devices like iOS and Android tablets and smartphones for this purpose. You can simply approach your customers with any of these devices, and hand it over to them for some time requesting them for feedback. Moreover, you can also set up unattended kiosk surveys at your premises at various locations where the customers can easily come and take the survey, and submit their responses.

• In-App Surveys - If you have a business app, you can share online surveys through your app at various touchpoints of the customer journey like order placement, bill payment, sales feedback, customer service feedback and more.

  

• Website Surveys  - You can also share feedback surveys on your company’s official website by using feedback widgets like popup surveys, slide-up surveys and feedback button on various web pages to collect user feedback at multiple touchpoints of the customer journey.

• Email Surveys - You can also share surveys with your customers through emails. You can send an embedded email survey, as well as an email survey with a survey link or button. You can also send email signature surveys with your emails used for regular communication with your customers.

• SMS Surveys - Through SMS survey tools, you can also send SMS surveys in which a survey invitation text message is sent to the mobile number of the customers followed by a survey link which the customers can click and easily take the survey through their phones.

2. Categorize

The next stage focuses on customer feedback analysis and categorization of the feedback data or customers based on their responses. This basically means categorizing customer feedback as positive, neutral, or negative feedback and analyzing it to decide what action you need to take and how to respond to the feedback.

For instance, in an NPS survey which has a rating scale of 0-10, the respondents are divided into three categories namely promoters (9-10), passives (6-7), and detractors (0-6) based on the ratings they give to your business or a business aspect.

Based on these categories, you need to decide what to do in the next stage.

3. Act

The next is the action stage where you truly leverage customer feedback to improve customer experiences by taking the right actions on it. In this stage, you should respond to every feedback and take action wherever required.

• Thank the promoters or customers who shared positive feedback for recognizing and appreciating your efforts.

• For the customers who shared neutral feedback, thank them and ask them what you can do to create better experiences for them.

• To deal with negative feedback, apologize to the customers with negative feedback for their bad experiences and ask them where things went wrong. Try to understand their issues and concerns and decide with your customer success team about the action to be taken.

• Take appropriate action on the negative feedback to fix customers’ issues and improve their experiences.

4. Follow Up

The last stage is the follow-up stage where you close the loop effectively. This is a crucial step which involves communicating to your customers what action you have taken to fix things up for them and improve their experience. This conveys to the customers that you care for them and take their feedback seriously. This can even convert negative feedback into positive one.

Also, follow up with your customers to know whether and how much they are satisfied with the actions taken. Moreover, if some customers have shared a suggestion, and you are making some changes in your business or products or services as per those suggestions, do inform those customers. This will create a very positive feeling in them and boost loyalty among them for your business.

Let’s learn how you can create an effective customer feedback system to gain actionable insights from your customers.

How to Create a Customer Feedback System to Gain Actionable Insights?

Creating an effective customer feedback system involves the following steps.

1. Define your objectives - Clearly define the objectives of your feedback system. What specific information are you looking to gather? Whether it's product satisfaction, customer service quality, or other aspects, having clear goals will guide the design of your system.

2. Choose an effective customer feedback tool - Choose a good customer feedback app or software to conduct feedback surveys. Choose voice of customer tools that help you create various types of surveys, share them with your customers through multiple channels, collect feedback and analyze customer feedback data, and close the loop effectively.

3. Create powerful and concise surveys - Keep your surveys short, simple, and focused on your objectives. Use a mix of multiple-choice questions, rating scales, and open-ended questions to get actionable and rich qualitative data. Make use of CX metric surveys like Net Promoter Score (NPS), Customer Effort Score (CES), and Customer Satisfaction (CSAT surveys) to measure customer satisfaction and loyalty in quantitative terms.

4. Choose the right channels to share surveys - The tool you choose should let you use a variety of survey channels like emails, SMS, website, in-app, Android tablets, and smartphones to share surveys with your customers. Choose the channel that suits you the most. You can also try different channels to capture customer feedback once and then see which of them gives maximum responses and actionable data, and then continue with the one that suits your business the best.

5. Implement the ACAF process - Collecting feedback and doing nothing about it defeats the entire purpose of the customer feedback system. So always follow the ACAF process described above to take the required action on feedback and close the loop effectively.

6. Regularly review and analyze feedback - Use your feedback tool for regularly reviewing and analyzing customer feedback with powerful survey reports and analytics. These reports will help you observe feedback trends and guide you on whether and how much your business is improving in terms of customer loyalty and satisfaction.

7. Follow customer-centric strategies and foster continuous improvement - Make your business customer-centric and make feedback-driven decisions to ensure maximum satisfaction. Follow the approach of continuous improvement as per customer demand and fulfil customers’ expectations as much as possible.

Conclusion

Having a well-defined customer feedback system and strategies is a critical part of every business and taking action on feedback and closing the loop is as necessary as collecting feedback in the first place. A good customer feedback app tool helps you in the creation of a well-structured feedback system and customer feedback management effectively to improve customer experience and grow your business.

Zonka Feedback is one of the best customer feedback tools that can serve the purpose. It helps you create feedback surveys easily with its ready-to-use templates, and send them through multiple survey channels. Moreover, with its advanced features like real-time feedback alerts and notifications, it enables you to know customers’ concerns in real time and take instant action on feedback to enhance customer experience and satisfaction. It also has advanced reporting and analytics capabilities that help you analyze feedback trends and together with your team create better customer experiences.

It also offers a free trial. Try Zonka Feedback for free for 14 days and see how it helps you harness the power of customer feedback and boost your business.