If I asked you to recall a few brand interactions as a consumer, chances are you may vividly remember interactions wherein your concerns or issues were promptly resolved by the brand. According to Microsoft, “Brands are viewed more favorably by 77% of consumers if they proactively invite and accept customer feedback.” Customer feedback is a valuable asset to any brand however, it may prove to be worthless unless you working on addressing customer concerns.
By creating a customer feedback loop, you can successfully gauge the pulse of your customers which can go a long way in improving customer retention rates and building brand loyalty.
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What Is Customer Feedback Loop?
The customer feedback loop is a strategic process that aims to ‘hear’ and address the pain points of the customers. It is a CRM process designed to understand the customers better and proactively work towards addressing their concerns.
A customer feedback loop has three stages- Capturing, Calibrating and Closing the Loop. The first stage is all about capturing customer feedback through various tools and mediums. In the second stage, the brand analyzes the feedback and works towards resolving the issue and the third stage is about communicating to the customers that their issue has been resolved. A very important aspect of the customer feedback loop is relaying to the customers how their feedback was accepted by the brand and how they plan to address the issue as well as notifying the said customers whenever the issue is resolved. The main objective here is to improve customer satisfaction and retention rates by being attentive, reciprocal and customer-centric in business and marketing approaches.
Why Is It Important?
When quipped about the success of his company, Brian Halligan, CEO of HubSpot, said that “Feedback is the breakfast of champions”. As more and more companies are adopting a customer-centric business approach and focusing more on improving customer experience than on generating revenue, customer feedback or customer data has become the new currency. Capturing feedback is only the first step at improving customer satisfaction. For a wholesome customer experience and complete customer satisfaction, it is important to resolve customer grievances, address pain points and take suggestions seriously. Another important aspect that most brands overlook or undervalue is- Closing the loop. Keeping your customers in the know is almost as important as working on their feedback. A brief message or email, informing the customer that the brand has noted their request and resolved their issue makes the customers feel heard, valued and important. More importantly, it projects the brand as customer-centric and helps in building true brand loyalty.
Tools and Mediums To Create Customer Feedback Loop
- Net Promoter Score (NPS) – NPS is a common metric used to gauge customer satisfaction and customer engagement levels. It is a question-and-answer system wherein a brand asks its customers to rate them on a scale of 1-10. Based on their response the customers are segregated into three categories – Promoters, Passives and Detractors. NPS system is known to have a high participation rate due to its simplicity and universal appeal. The scores are easy to calculate and help to correctly estimate the customer’s perception of the brand.
- Customer Effort Score (CES) – CES is a yes-or-no metric system. It simply asks the customers to answer the question in either ‘Yes’ or ‘No’. The questions could be about sales, product quality, website accessibility, sales support or any other department. The CES system works because it is quick, efficient and a no-brainer. The system is uncomplicated and the customer doesn’t have to spend more than a few seconds on the survey.
- Customer Satisfaction Score (CSAT) – CSAT helps to gauge customer satisfaction level with a particular interaction with the brand. Generally, asked after a transaction, it helps to identify how satisfying the particular interaction was, for the consumer. CSAT could be in the form of a pop-up or may direct you to a landing page. The genius lies in the simplicity and the efficiency of the format. It helps you to identify pain points as well as strengths of your service.
- Social Media – Social listening can be a great way to understand your customers. Most customers today, prefer to drop a message on the brand’s social media handle than going through the tedious process of emailing customer support. Monitoring your social media accounts diligently can not only help to gauge the pulse of the audience but can also help in closing the customer feedback loop.
- Incentive Program – A great way to ensure customer participation and generating feedback is through an incentive program. You could incentivize your customer’s time and effort spent on generating feedback. Rewards and incentives are great stimulators to generate customer feedback and data. To know more about how you can use the genius of incentive programs to close the customer feedback loop, click here.
- Chatbots and Customer Support – Your website chatbots and customer support forums are gold mines of customer feedback. While browsing through your website, customers find it easier to drop messages in chat boxes than emailing you, their concerns. A closer look at your chat engine data will help you resolve maximum customer grievances and understand your brand’s strengths and weaknesses.
Challenges You Might Face
You may have the best feedback mechanism in place however, not every company knows how to manage and analyze this data. The data you receive through a combination of feedback tools can be overwhelming. Data accumulation and analysis is a serious business that needs careful evaluation. Another challenge you may face is irrelevant data. Social media platforms especially can generate a massive amount of customer feedback however the quantity of relevant information could be quite low. You need to sift through the data and close the loop with potential customers. Lastly, closing the customer feedback loop has a significant impact on customer retention, loyalty and even customer acquisition but it is a gradual process.
A paradigm shift in the way you operate, while keeping customers at the heart of everything you do, can help you to close the customer feedback loop, significantly improve customer satisfaction levels and turn repeat customers into brand evangelists.
To learn more about creating a dynamic and effective, customer-centric approach and improve customer satisfaction and retention rate, connect with Annex Cloud.