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The ACAF Customer Feedback Loop

March 09, 2023

Customer Feedback is crucial information for every business. Businesses now have become aware enough to realize the importance of this information, and most businesses have started collecting feedback from their customers. And why not? After all, Customer Feedback is the only way to know how your customers feel about your products and services, and the experience they have received while doing business with your organization.

Researches suggest that around 89% of the business executives agree that Customer Feedback helps to solve customer issues and grab opportunities for business growth. But merely collecting feedback is not enough, you need to make the best use of it! Let's understand it as a customer.

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Imagine you buy a pair of headphones online for your upcoming train journey. You receive the product within 48 hours, which is earlier than the estimated delivery date said to you. You feel excited about it! But as you check the headphones, you notice that one of them is not working properly and the product you have received is defective. When you try to contact the sellers, you are unable to connect? How would you feel? Frustrated, isn’t it!

By this time, you must have decided not to order from that website or seller. You give a bad rating for the product you ordered, along with a comment sharing your experience. Within half an hour, you get a response and a callback from the seller apologizing about your bad experience and assuring your product to be replaced. Now, you’ll feel somewhat better! 41% of customers agree that when businesses revert to their reviews, they feel that the businesses do care for their customers.

Still, you are not sure that you will be able to enjoy your headphones in your upcoming journey in a couple of days. Now, to your amazement, within 12 Hours, an executive reaches your place with a new pair of headphones, picks up the defective product from you, and provides you a new pair of headphones that are in the best condition. You check them and notice that it’s working fine with amazing sound quality. Now, what will be your feelings about the brand or the seller?

They must have changed entirely up till now, as your dissatisfying experience has now transformed into a satisfying one, and now you will be going to enjoy your product as you planned. Such is the power of responding and acting on the Customer Feedback Loop, or we can better say, Closing the Feedback Loop. Let’s understand first what is a Customer Feedback Loop.

What is a Customer Feedback Loop?

A Feedback loop is a part of a system wherein some output of the system is used as input to continue further operations. When we talk about the Customer Feedback Loop, it is a process in which businesses collect Customer Feedback about the experience customers have with their products, services, and the organization; and use it as input to take further actions on it and to make the right business decisions.

What is Closing the Customer Feedback Loop?

Closing the Customer Feedback Loop means responding to Customer Feedback, taking the required actions regarding the issues and concerns raised by the customers, and informing the customers what you are doing for them about their feedback.

Closing the Customer Feedback Loop is one of the essential tasks of a business. It is as crucial as collecting feedback in the first place. It would not be wrong to say that all the effort to gather feedback is worthless if you don’t emphasize Closing the Customer Feedback Loop. Let’s explore why Closing the Customer Feedback Loop is so essential.

Why Closing the Feedback Loop is Important?

To understand why Closing the Feedback Loop is important, let's take an example. Imagine you had a bad experience with a product or a service of a particular organization. You receive a survey asking for feedback, to which you respond by sharing all the negative experiences you had. But you don’t get any response to the feedback; how would you feel? Of course, even more frustrated!

Your customers also feel the same if you don’t respond to their feedback. Studies suggest that 52% of people worldwide strongly feel that companies must take Customer Feedback seriously and act on it. No response on the Customer Feedback even worsens the situation, and next time, if, in any case, they choose your brand again, they will most likely not even spend time filling out a feedback survey. The reason being, it seems to them that nobody cares for their feedback.

Therefore, it is vital to respond to Customer Feedback and close the feedback loop effectively. Here are some reasons that can better explain the importance of Closing the Customer Feedback Loop.

1. To acknowledge and thank customers for providing feedback

Responding to Customer Feedback is an excellent way of acknowledging that you have received their feedback and thanking your customers for sharing such valuable information with you.

2. To make customers feel getting heard

When you respond to feedback and take actions accordingly, customers realize that their voice gets heard, and you value their opinion.

3. To utilize effectively efforts done for collecting feedback

Collecting Customer Feedback and not doing anything about it is like wasting deliberately all the efforts you made to collect feedback. There is no use in gathering feedback if you do not take any action on it at all.

4. To Calm down the dissatisfied Customers

When you proactively respond to negative feedback, seek apologies from your customers for their bad experience, it calms down the dissatisfied customers. Further, when you take necessary actions on the feedback, it even changes the perception of the unhappy customers about you and your organization.

5. To improve Customer Experience and satisfaction

Closing the Customer Feedback loop is a means to increase Customer Satisfaction and improve Customer Experience effectively. When you take action on feedback and tell the customers what you have done for them, it can even change negative feedback into a positive one.

6. To improve sales and overall business

Dissatisfied customers most likely do not make repurchases and even spread bad word of mouth about your organization. This affects your sales and the overall business. On the other hand, Closing the Customer Feedback Loop helps satisfy your miffed customers and bring them back to your business, which ultimately helps prevent churn and improve your sales.

By Closing the Feedback Loop, you can even convert your detractors into promoters, eventually attracting more customers, thereby increasing your sales. Let’s understand how the complete structure and Process of Closing the Customer Feedback Loop.

The ACAF Customer Feedback Loop

ACAF is the structure of the Customer Feedback Loop. This structure consists of four stages that start from collecting feedback and finally closing the feedback loop. Let’s understand what these stages are and what operations are carried out in each step.

  1. Ask 
  2. Categorize
  3. Act
  4. Follow Up

The A.C.A.F Feedback Loop

Let’s explore more  about these stages:

1. Ask

This stage focuses on collecting Customer Feedback. In this stage, you ask the customers what they feel about your products, services, and experience with your organization. The only way to as them is Customer Feedback Surveys.

In this stage, surveys are created and presented to the customers through various means like email, SMS, website, or kiosks. You can also request the customers in person to share feedback when they are at your premises. For this purpose, you can use surveys through devices like iPhone, iPads, Android tablets, smartphones and also set these devices at unattended kiosks at your location.

The objective of this process is to collect maximum feedback data with high accuracy. The output of all this process is the feedback data from the customers you get in the form of survey responses.

2. Categorize

The next stage focuses on dividing the customers or their feedback data based on various aspects. You can divide the customers based on their responses.

  • If you organize a Net Promoter Score Surveys, you can divide the respondent into three categories: Promoters, Passives, and Detractors.
  • If you conduct CSAT Surveys, you can divide the respondents on the basis of their ratings like Excellent, Good, Average, Bad, Poor, and so on.
  • If you conduct CES Surveys, you can divide the respondents based on rating options they chose like Strongly Agree, Agree, Neither Agree Nor Disagree, Disagree, and Strongly Disagree.

You can also divide the respondents on the basis of concerns they have raised:

  • Common Issues: In this category, you can put those respondents who raised similar common issues. For instance, if you are in the SaaS industry, weak internet signals during a particular time or weather can be a common issue raised by many customers.
  • Personal Issues: In this category, you can put respondents with issues that specifically occurred with some particular customers like receiving a defective product, delay in delivering a product, an argument with a customer service executive, food delivered not being fresh, etc.

3. Act

This is the core stage where the process of Closing the Feedback Loop actually occurs. In this stage, you need to take appropriate actions on the feedback so collected. You should take these actions:

  • Thank the respondents who gave positive feedback and appreciated you. Assure them that you will continue to provide a great experience to them.
  • Thank the respondents who gave an average rating and ask them what you can do to make their experience more delightful.
  • Apologize to the respondents for their bad experience who gave you negative ratings. Ask them where things went wrong.
  • When you get to know the issues and concerns of the customers, assure them of taking proper, timely action. Try to give an estimated date and time by which you will be able to resolve their issues.
  • Work on the issues raised by the customers. Keep them informed about the progress in their issue resolution process.
  • Take necessary actions to improve their experience, like replacing a product, compensating with a free service or gift, returning a product, etc.

4. Follow Up

Following up with your customers is as important as taking action on the Customer Feeback. Your customers must know what you are doing to improve their experience. So you need to inform your customers about the steps you are taking or have taken based on their feedback for improving their experience. Moreover, follow up with your customers to know whether they are satisfied with the actions taken or not.

Secondly, suppose the customers give some suggestions regarding your business, and you take business decisions accordingly or make changes as per their opinion. In that case, it is always great to tell this to your customers. When you make some changes in your business as per customers’ advice and inform them, they feel deeply connected with your business. It helps to increase their loyalty towards your company.

These are the stages of the Customer Feedback Loop. If you want to utilize Customer Feedback, running the ACAF process along with following the best practices of Closing the Customer Feedback Loop through these stages is necessary.

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Nikhil Dawer

Written by Nikhil Dawer

Jul 21, 2021

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