Topic(s):Customer CentricityCX & Business Strategy
Feedback Loops: A practical guide
When it comes to customer experience, no one is going to step in your shoes and do the work for you. Many experts have been sharing their vision on how to improve CX, but the most important people you should be listening to are your customers. So how do you get their input on a regular basis? By implementing a feedback loop!
First of all, what is a feedback loop? A feedback loop is a process of gathering feedback, responding to the feedback, and using that feedback as input for improvements. Feedback loops are a great way to get insights and improve your company. They help you identify friction in your service profit chain and analyze the performance of your products, services, employees, and much more. You can have both positive and negative feedback loops.
Positive feedback loops
Positive feedback loops happen when companies can create positive changes thanks to feedback. Customer feedback makes a company grow and improve. For example, when customers enjoy improvements you’ve made based on their complaints.
Negative feedback loops
Negative feedback loops are present when feedback negatively affects potential customers. For example, when reading negative reviews cause a possible customer to choose a competitor over your company.
Feedback loops allow you to effectively look for improvements and take action where necessary. You use them to evolve your products and services and deliver a better customer experience than before.
Creating the ultimate feedback loop
The real goal? Creating the ultimate feedback loop! There are many reasons why it’s so important but here are two crucial ones:
It’s an obvious reason, but acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one (based on Harvard Business Review research). So, listening to your existing customers to build loyalty will ultimately pay off.
In unsure times, when companies are pushed to pivot their business model, they are driven by a feeling of uncertainty. Many companies make the mistake of taking on a “science fair mentality”, where they innovate without direct contact with the customer these innovations are intended for.
The ultimate feedback loop takes feedback by listening to customers, turns insights from feedback into improvements, and gathers feedback once again to check if the situation has improved. The result of this should be positive feedback, confirming that the improvements have resolved the mentioned friction.
How do you involve your customer?
Ask for feedbackafter every interaction. Especially interactions that are new for both you and your customer (like a new delivery service).
Analyze feedback. Make sure to analyze the feedback immediately, in real time if possible.
Accessible feedback. Make sure the feedback is accessible to the right people in the organization. If feedback is negative: have a follow-up conversation with the customer.
Identify pain points. Go through the analyzed feedback to find pain points and implement quick wins.
Putting your feedback loop into practice
Before you even start setting up a touchpoint, you need to think about which point in the customer journey you are trying to improve. You can’t improve everything at once, so start small and build more touchpoints later.
Customer feedback makes the most sense right after a specific interaction and in these situations, we prefer using a CSAT (Customer Satisfaction Score) over the NPS (Net Promoter Score) metric. The feedback will be more concrete and focused on the interaction. That will make it easier for you, later, to identify pain points and improve the experience.
Here are some suggestions:
After a delivery
After an appointment in your branch
In your store/branch via QR codes
When closing a customer service ticket
Before or after a contract renewal
Managing your feedback loop
We poured the feedback loop into 3 different types of days:
This is the first phase after you’ve set up a touchpoint. Listen days are all about being open-minded and curious! Ask open questions and specifically ask why they are happy or unhappy. Many companies will fall into the trap of making surveys with scales and tick boxes. But that’s not being curious, that’s trying to validate your own assumptions. So be as curious as possible, that’s the focus of the listen days! This doesn’t mean you can sit back and relax. Keep an eye on what’s coming in and if very unhappy customers give you feedback, take the time to give them a follow-up.
Next step is to make sure you have one recurrent, dedicated analysis day per week, for example every Monday. This brings structure to your weeks and keeps you in a continuous rhythm. Don’t be fooled though, the analysis won’t take all day. On an analysis day, you take the time to thoroughly check the feedback. What are the recurring themes? Can you identify 3 clear pain points? What’s your CSAT score? And most importantly, what can you do to remove friction?
You don’t have to go it alone; the easiest way is to have a meeting with a couple of team leads and see what you can do together.
Here’s another word of advice: when you want to make the short feedback loops successful, you need to focus on the quick wins. You won’t be able to change complete processes in a matter of days. Completely breaking internal silos won’t be possible either.
During the action days, you focus on implementing the quick wins. What are some areas where you can improve on a short-term basis? They are closely tied together, but in our opinion, communication and expectation management are easy ones to start with. You can’t make your delivery partner work faster, but you can include a message in the confirmation email that delivery can take a couple of extra days.
See where we’re going with this? When you communicate upfront, customers can adjust their expectations, which makes it easier for you to meet them, while you’re making strategic changes in the background. Try to focus on one or two crucial elements, you won’t be able to do everything at once. Inform your team of the changes as well. Going into action mode doesn’t mean that you should take your touchpoint offline, we keep listening continuously. Set yourself a clear deadline on when you stop doing and when you start listening again. Only then the results will become clear in your feedback.
You will see an improvement when:
People stop mentioning the original pain point in the feedback;
Your score is improving.
In general, a feedback loop helps you improve your customer (and employee) experience. Creating a feedback loop allows you to gather specific feedback, improve your work based on that and check if your customers are satisfied with the improvements you made. Managing your feedback loop is made easy with the Hello Customer platform. We allow you to listen, we analyze your feedback at scale and we help you prioritize and act!
Net Promoter Score, NPS, and the NPS-related emoticons are registered U.S. Trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.
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