Collecting Customer Feedback has become a necessary task for most of the businesses as this is the only way to know what your customers think and feel about you and how much they are satisfied with your products and services. Customer Feedback is important for any organization to grow.
Realizing the importance of Customer Feedback, you spend your time and money on creating surveys, sending them to the customers, motivating them to fill the surveys and thus collecting Customer Feedback in the form of survey responses. But are you able to utilize the full potential and the benefits of collecting Customer Feedback?
According to Gartner, 95% of companies collect Customer Feedback but only 10% work on it to improve their products and services and 5% bother to tell this to their customers. In this way, we can say that only those 5 percent are actually utilizing Customer Feedback to the full extent. Rest others are not as they are not carrying out the process of "Closing the Feedback Loop" which is of utmost importance.
Before moving on to the importance of Closing the Customer Feedback Loop, Let's learn what this process is and how it is followed.
What is Closing the Customer Feedback Loop?
Closing the Customer Feedback Loop is the process of responding to Customer Feedback, taking meaningful action to improve Customer Satisfaction wherever required, and thereby informing the customers that you have worked on their feedback.
Now, all three aspects of this process are equally important whether it is responding to feedback, taking action or informing the customers about that you have acted on it. Let's understand why it is important.
Why it is so Important?
41% of the customers believe that the brands replying to their reviews really care about their customers. And if you do not respond to Customer Feedback, the customers would obviously feel that you don't care about them and they should find a better brand.
This ultimately increases your customer churn. Not replying to reviews risks increasing customer churn by up to 15%. Whereas, if you revert to their feedback and take the required meaningful actions and resolve issues, you can retain your churning customers.
11% customer churn can be avoided by just reaching out to the customers and 67% can be avoided if you solve their issue at the first instance. Let's explore how Closing the Feedback Loop is beneficial for your brand.
Importance of Closing the Feedback Loop
- It helps to increase Customer Satisfaction
- It helps to increase Customer Loyalty
- It helps to save your Goodwill
- It helps in improving employee performance
- It helps to maximize your revenue
Let's explore how you can derive these benefits of Customer Feedback by Closing the Feedback Loop effectively.
1. It helps to increase Customer Satisfaction
Customer Satisfaction is the primary requirement for any business to survive and grow. Without this, you cannot think of your business attaining success.
When you close the customer feedback loop, it makes them happy and satisfied.By following this process effectively, you can improve Customer Experience thereby enhancing Customer Satisfaction.
2. It helps to increase Customer Loyalty
When you respond to Customer Feedback and suggestions, take the required actions and inform the customers about this, it gives them a strong feeling of being listened and valued. This gives them a sense of owning the brand which eventually increases their Customer Loyalty towards the brand.
By Closing the Feedback Loop, you can build trust among your customers towards the brand. This can not only make you passives into promoters, but can also help you convert your detractors into promoters.
3. It helps to save your Goodwill
If you do not gather Customer Feedback, customers share it through online reviews and negative word of mouth. And when you gather it, still do not do anything about it, customers get even more frustrated and the intensity of their negative word of mouth and negative reviews about your brand increases to a large extent.
This can literally ruin your goodwill! Having a good word-of-mouth in the market is so important that 92% of all people trust a word of mouth recommendation over any other kind of marketing. Closing the Feedback loop helps to bring back the miffed customers and thus helps in saving your goodwill from getting ruined.
4. It helps in improving employee performance
It is well known fact the Customer Feedback helps in evaluating employee performance. In this regard, Closing the Feedback Loop goes a step ahead by improving their performance.
When you engage your employees in Closing the Feedback Loop, they get to learn how to fix up the things which earlier got wrong. This helps in their personal development and thus improves their performance.
5. It helps to maximize your revenue
When you receive Customer Feedback, you actually get a rich data that evaluates performance of your brand and its product and services. You get to know the loopholes in your processes and faults in your products. Working on this feedback to Close the Feedback Loop helps in product improvement which in turn results in better quality of products and services that can yield more revenue for you.
Moreover, working on customers' suggestions and then informing them develops a strong relationship with them that helps to provide a great Customer Experience resulting in more sales and revenue.