A feedback loop is a cyclical process in which the outputs of a system become the inputs.
Feedback loops are used to explain everything from climate change to democracy. Scientists have used similar frameworks for decades, but recently the idea has found its way into boardrooms and business meetings across the country.
The Customer Feedback Loop
Most commonly applied to communication, the customer feedback loop is a powerful framework for rapidly improving customer satisfaction. It gives employees and managers a meaningful way to measure the customer experience over time. For customers, it’s an easy way to communicate expectations with a business, as well as a compelling reason to come back regularly.
Here’s how it works:
- Ask customers about their experience.
- Use their responses to create a baseline.
- Analyze and summarize their responses into trackable metrics.
- From the analysis form hypotheses for improving customer satisfaction.
- Change people and processes to test your hypotheses.
- Track how your customer satisfaction compares to industry benchmarks.
The faster a company can cycle through this loop, the more relevant their feedback will be. Because it’s cyclical, each step informs the next—setting your business up for continuous improvement. Once implemented, a customer feedback loop can become automatic.
Step 1: Ask Customers
Getting good feedback on your business is hard. Your friends will tell you what you want to hear, employees are on payroll, and you’re often too close to be objective. Customers, on the other hand, interact with your business every day, have no problem telling you the truth, and love to give their opinions. They’re the perfect audience to inform the first step in your customer feedback loop.
There’s a variety of customer feedback strategies you can use to ask your customers, but the most reliable feedback is quickly collected and easily tracked over time. Here are a few of the most popular strategies to consider:
- NPS is a two question survey that ranks your customer’s satisfaction on a scale from zero to 10.
- Surveys are a reliable form of customer feedback that’s been around for decades. They range from a simple Google Form to complex multi-product feedback platforms that stand up to academic rigor.
- User Testing is a fancy way of saying record customers using your website or product. One of the more popular methods for technology companies and startups.
- Interviews are exactly what they sound like. You reach out to your customers and interview them about their experience with your business.
- Social Listening is the practice of monitoring social media to find mentions (positive and negative) of your business and employees.
Regularly asking your customers what they think is a powerful way to learn about your business. It also helps you set a baseline, or a starting point, from which you can compare improvement over time.
Step 2: Analyze Feedback
Unfortunately, not every person who visits your business will have nice things to say about it. But negative feedback can be just as helpful, if not more helpful, than positive feedback. Use it to your advantage to improve the customer experience. First off, know how to respond to a negative review. Secondly, as you begin your analysis, keep an open mind and try to avoid letting confirmation bias influence the results.
Confirmation Bias: the tendency to search for or interpret information in a way that confirms our preconceptions, leading to statistical error.
Whether you’re using word clouds or net promoter scores, analyzing customer feedback should result in qualitative and quantitative measures which you can use to track your progress over time. The results will also help you form hypotheses for how you can improve customer satisfaction in the next step.
Step 3: Act On Results
If you’ve done the first two steps properly, then you have a process for getting customer feedback and metrics for tracking it over time. At first it will take some time to go through the entire process. But eventually you’ll be able to track your progress using the baseline established in the previous step. In addition to tracking your own customers, high-performing companies also use industry benchmarks to measure their performance against the competition.
Once implemented, regular customer feedback can transform your company. However, it’s hard to influence company-wide transformation without first getting consensus from your employees. If you’re just getting started, establish who is in charge of the customer feedback loop and how frequently is should be completed. Many companies even tie bonuses and raises to levels of customer satisfaction. Imagine the difference it would make if your customers could tell you how well you’re doing on a daily basis. How quickly would issues get resolved if you could see customer feedback by department, location, or employee?
Today, 42% of businesses use customer feedback tools. But traditional customer feedback can take anywhere from a few minutes to several months to collect. And the longer it takes to complete the cycle, the less useful the information becomes. Alternatively, our new Feedback product allows business owners to collect real-time insights from actual customers. Since the entire conversation takes place over text, response rates are three times higher, and 70% of customers respond in under two hours. Feedback gives you an immediate pulse on customer perceptions—no links, no lengthy surveys, just real-time responses and insights.