B2B or B2C, no matter what business model you operate, the key aim is to “grow and earn profits.” For this, you will have to focus heavily on one tactic – satisfying the customer. The math is quite simple -> if a customer is satisfied with your product and service, they will stick with you. Not just that, satisfied and happy customers can turn loyalists and also show a willingness to be your brand advocates.
Businesses use several strategies to ensure that the customer is satisfied. Among these is customer feedback. Customer feedback works two ways – 1. Collecting feedback helps businesses understand customer perceptions and build on the product. 2. When asked for feedback and when the same is implemented, customers have a positive impression of the brand.
Owing to this importance, businesses emphasize getting customer feedback right from the preliminary stages of product development through post-purchase experience. But did you know the difference between positive and negative feedback?
Let us talk about it in detail
Customer feedback can be defined as the information that customers offer in relation to their experience with the company’s product/ service. Businesses collect customer feedback to gain insights into the level of satisfaction. This information gathered from the customers is distributed across teams, including the product, marketing and sales, and customer success, to identify areas for growth.
Companies can proactively gather customer feedback by asking the customers, or using tools such as polls, surveys, or interviews. Teams may also gather feedback by giving consumers a place to post their reviews, suggestions, or complaints.
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Why is Customer Feedback Important?
Imagine you have introduced an excellent product/ service into the market. But how will you know if your offering adds value to your customer’s life? Well, your sales data might give you some insights, but that does not emphasize the product/ service.
Customer feedback is a reliable way to gather product/ service-specific data. A business cannot determine whether its customers benefit from its product without customer feedback. The product and go-to-market teams will not know if they are able to tap into the customers without knowing whether they are receiving value.
Let us now look at a few reasons why customer feedback is important –
1. Makes your customers feel valued
Feedbacks, whether positive or negative, is especially important for a business. Asking your customers for their feedback is a sign that you value their opinions and are listing to them. When you reach out to customers asking for their feedback on their offering, they feel a sense of belonging and will be more attached to your company. It helps build and nurture your relationship with them.
Additionally, listening to and implementing customer feedback is an excellent way to retain customers. At the same time, it is also a fantastic way to encourage your customers to become your brand advocates and spread the word about your offering.
2. Helps you improve your product/ service
This is one of the biggest and most inevitable benefits of collecting customer feedback. When people – your users – tell you what they like and dislike about your product or give you suggestions, you have a greater opportunity to improve on it. As the feedback helps you know what is working and what is not, you get to work on bettering it to suit your customers.
When you get to know your strengths and weaknesses, you can make better features and upgrade judgments, and make the product better than before.
3. Negative feedback helps to let your customers know that you care
At first sight of it, negative feedback may feel daunting, especially when it is online feedback your prospects and existing customers can view. However, you will have to look at negative feedback not as a failure but as an opportunity to improve.
Your customers might go on online portals to express their dissatisfaction. By doing so, your customers are reaching out to you and expressing what is going wrong with your product/ service. These reviews and reactions are of immense help as they give you deeper insights into your offering. Thus, you have a greater scope to improve.
4. Assists you in measuring customer satisfaction
Customer satisfaction is one of the most key factors impacting the growth and profitability of an organization. Your organization can reap several benefits due to customer satisfaction, including an increase in market share, higher revenue, and even increased customer retention.
These benefits make it particularly important to keep track of customer satisfaction and collecting customer feedback is a way to do so. One of the popular ways to do so is by using the NPS (Net Promotor Score). NPS asks customers to rate their experience on a scale of 1 to 10 (1= Not Satisfied and 10 = Highly Satisfied).
Collecting customer feedback via tools like NPS helps not only in tracking customer satisfaction but will also boost the motivation of internal teams to work better.
5. Excellent source for prospective customers
90% of customers today, including us, go online to read reviews and feedback about a product/ service before making a purchase. Not only do they read reviews, but they also compare with competitors’ products/ services. In such a scenario, having a positive review on the website or on other portals can be extremely helpful as it influences their decision-making.
The reviews and feedback coming from real customers are perceived to be more genuine, and customers trust them more. Additionally, online reviews and feedback also work wonders for your branding.
Customer Feedback Loops
The customer feedback loop can be defined as a process in which a portion of the output from the system (feedback system) is taken as input for new, future improvements. Simply put, the output from the system is circled back and is used as input for future improvement. Based on the type of feedback you receive, you can either have a positive or negative feedback loop.
Positive Feedback loop
This type of feedback is internal – the company collects criticism and reviews from the internal stakeholders to improvise the product, processes, and internal functions. The feedback loop is useful in making improvements and corrections whenever necessary. The loop is closed when incoming criticism is solved and/or there is an improvement in the work environment.
Negative Feedback loop
This type of feedback loop involves gathering feedback from the customers. As a business collecting feedback, you may use surveys, emails, chatbots, social media, etc. By asking them to provide feedback on their experience, you will be collecting data about your product/ service. This will help you improve, and this will benefit both the customer as well as the business.
To close the negative feedback loop, you must implement the feedback and ensure that your product meets your customers’ needs.
The Process of Feedback Loop
There are three steps involved in the implementation of a feedback loop. The steps involve
- Gathering feedback
- Analyzing the feedback
- Acting on the feedback received
1. Gathering feedback
Depending on the feedback loop you are implementing, you will have to start gathering the feedback. For this, you may use tools such as NPS, surveys, or polls. You may send them to the targeted audience via emails, in-app notifications, or any other form suitable.
It is also an effective way to use social media listening to gather customer data from comments and user messages.
2. Analyzing the feedback
Upon gathering the necessary information, you will have to break it down, analyze it, and then draw insights from the data. Use of techniques such as segment analysis and other analysis tools, you can draw insights into the product/ service provided. The core of this step is to help you know what is working and what is not.
The deeper your analysis, the greater your chances of coming up with a better resolution.
3. Acting on the feedback received
The next step involves implementing the feedback that has been collected and analyzed. Acting on the feedback improves your product, and motivates your stakeholders to associate with you for a long time.
Wrapping it up
To wrap it up, as a business, you need to understand that your customers are at the center of your business. Considering this, you need to ensure they are happy and satisfied with your offering. Gathering customer feedback is a useful tool that gives deeper insights into customer satisfaction and what is working and what is not with a product/ service offered.
At the same time, as a company, you will have to recognize the value that your employees bring to improve your overall business. Gathering their feedback and opinions serves as a positive measure to improve your offering as well as internal productivity.
Considering this importance, businesses need to welcome both positive and negative feedback. Both types of feedback, when used appropriately, help improve the offering and build on it.
Hope we have helped you better understand customer feedback, so use it wisely. 37
All the best.
You might also like:
- The Essential Guide to Customer Feedback – Customer feedback is the insights and information put up by the customers about their experiences with your company. But is that all? Let us find out.
- To see how SmartKarrot helps B2B companies streamline and scale customer success, Request a Demo.
Rakhin has over 10 years of experience driving business development and client services. In his prior roles, he stayed close to customers to understand their requirements and help them achieve their business goals. He is passionate about customer success.
Published September 21, 2022, Updated October 28, 2022