Understanding the power of customer feedback management

A business that doesn't satisfy its customers can't survive. To give your customers what they want, you have to know what that is.

Customer feedback is vital to running a successful business. However, not all businesses handle customer feedback well. We've all seen businesses that aggressively reply to reviews and put off potential customers. And others ignore it for years, leaving customers dissatisfied.

Luckily for you, we’ve written this great guide that addresses ways to manage your customer feedback efforts to maximize your results. 

We'll discuss the types of data you should collect and why. You'll also learn about some tools to make collection and analysis much easier. Let’s dive in.

Customer feedback management is the process of collecting, analyzing, and leveraging customer feedback. It drives business decisions that improve the customer experience. 

Feedback lets businesses understand customer needs, preferences, pain points, and satisfaction levels. 

These are crucial to remaining competitive in any industry, making customer feedback management key to building a successful brand. 

Effective management enables data-driven decision-making, better products and services, and stronger customer relationships.

The need to keep customers happy is fairly obvious. 

However, let's take a closer look at some major benefits businesses can see when they prioritize customer feedback:

• Improved customer satisfaction and loyalty

• Enhanced product and service development and innovation

• Increased customer retention and reduced churn

• Faster identification and resolution of customer issues

• Better alignment between customer needs and business offerings

• Stronger brand reputation and competitive advantage

If you want to know how to do customer feedback, you’ll need an in-depth knowledge of what customer feedback is. This means understanding much more about the process than the definition above.

First, let’s look at the different types of customer feedback:

Customer loyalty metrics

One-off customers are great, but if you want to build a brand, you need customers who will continue to purchase from you. That’s why many businesses take customer loyalty so seriously. 

To measure efforts to improve customer loyalty, you need to track it with key metrics like:

• Net Promoter Score (NPS) is how likely a customer is to recommend your company.

• Customer lifetime value (CLV) is the total amount you can expect to earn from a customer during the business relationship.

• Repeat purchase rate refers to the percentage of your customers who make more than one purchase.

• Churn rate measures the percentage of customers who stop using a product or service over a period.

Customer satisfaction feedback

Customers will only be loyal if they're satisfied, so check how many of your customers are happy with your offerings. 

Beyond mere numbers, good customer satisfaction research involves understanding why customers are delighted by your brand or unhappy. 

Methods for collecting satisfaction feedback include:

Surveys

Surveys can be simple and ask customers to rate your brand on a scale. They can also be more detailed, asking for deeper and more thorough responses.

Post-purchase questionnaires

A customer's perception of your company is at its height right after their purchase. It's an excellent time to gather feedback about their experience.

Follow-up emails or calls

Customer feedback can also be more valuable once they've had time to use the product or service. Follow-up emails or calls can get information in those circumstances.

Sales feedback

This area of customer feedback looks into the effectiveness of your sales process, product offerings, and sales team performance. 

Sales feedback can identify obstacles in the sales funnel, help refine messaging, and improve product development priorities. Feedback here can also help with sales team training. 

Key aspects of sales feedback include:

• Win/loss analysis is an in-depth analysis of which deals the sales team won and lost.

• Product feature requests are customer feedback about which features they'd like products to have.

• Pricing feedback asks customers whether your products and services are fairly priced and worth the cost. 

• Competitive intelligence examines what your competitors offer customers and how satisfaction and opinions differ. 

Customer service or support feedback

Customer service or support feedback focuses on the quality and effectiveness of your company's customer assistance. It looks at the process before, during, and after a purchase. 

This feedback can help you increase customer satisfaction, reduce churn, and lower support costs. 

Key metrics to track for this area of feedback include:

• First response time is the time that passes between a customer asking for help and getting their first response from your team.

• Resolution time is the time it takes for you to fully resolve the customer's issue.

• Customer effort score (CES) is a numerical rating from customers that represents the amount of effort required on their part to resolve the issue.

• Support channel preferences focus on how demographics have different preferred channels for getting support. This feedback shows you where your customers stand.

Customer preference feedback

Customer preference feedback helps your company understand its target audience's likes, dislikes, and priorities.

This information provides valuable insights for product development, marketing strategies, and overall business decision-making. 

Some ways to gather preference feedback include:

• Focus groups are in-person interviews with groups of customers about their preferences.

• Online surveys on your website provide an excellent opportunity to get information on customer preferences.

• A/B testing is a more quantitative way of gathering data on customer likes and dislikes. Two groups of customers view two different versions to see which is preferable.

• Social media polls are a convenient way to get feedback from customers who haven't recently visited your website.

Demographic information

Demographic information provides essential context about your company's customer base. 

This information helps segment audiences and tailor products, services, and marketing efforts. 

If marketing and other business processes adapt to different customer segments, consider segmenting the feedback you gather from each. This will allow you to better target those demographics. 

Key demographic data points include:

• Age

• Gender

• Income level

• Education

• Occupation

• Geographic location

It’s easy to collect customer feedback. But, doing it effectively and properly managing the resulting data is a little trickier and needs a systematic approach.

Below are the three major steps in managing your customer feedback collection efforts:

Collecting customer feedback

The first step is to gather feedback through surveys, feedback forms, social media monitoring, interviews, and more.

Decide which areas you'd like to get feedback on and choose which methods you’re going to use. Perhaps you’ll create focused surveys and feedback questions to get the information you need. 

Collecting feedback on a wide range of business operations is best. However, each survey or interview should focus solely on one specific area. This keeps the data you collect relevant to your current business goals. 

Analyzing customer feedback

Now you’ve collected the data, it's time to analyze it. 

The first step in this process is to categorize and organize the feedback. 

As you do, look for trends, patterns, and themes that develop in what customers are saying. This will allow you to determine consensus opinions. 

Once you've identified the areas that need improvement, prioritize each one according to its impact and feasibility. 

Customers don't have insight into how your business and its systems operate, so their feedback can often be abstract or generic. 

The next step is to conduct a root cause analysis for each of the problems that you've decided to address. 

Taking action

Once you've decided which problems to address, it's time to take action. 

If you use product roadmaps, integrate your chosen solutions into those roadmaps. This will give you a structured way to approach the problems. 

If you use public roadmaps, this also lets customers know their concerns are on your radar.

Don't forget to check your fixes have actually addressed your customers’ concerns and pain points. 

The most effective way to do this is to run another round of feedback to see how well they've received your changes. 

Let's dig deeper and look at some specifics to ensure your feedback process is as successful as possible. 

Setting clear objectives and goals

We've seen many reasons for gathering customer feedback and several methods. But trying them all at once is a recipe for disaster, especially without clear goals or objectives. 

Instead, list all the areas you'd like feedback on and approach them individually. This will allow you to remain focused and improve the quality of the results. 

As you choose, be sure to align the areas of feedback with your overall business objectives. 

When you've decided which area to focus on first, select key performance indicators (KPIs) to quantify your efforts. 

Creating a structured feedback collection process

Feedback collection can quickly become disorganized. To create a structured process, start by identifying the best methods and channels for your business. 

Where do your customers typically engage with you? If your existing research has already revealed your customers’ preferred communication channels, this is a great place to start. 

When you've decided on the channels, decide who you'll be soliciting feedback from. 

At this stage, it's important to pick a sample of customers that represents all of your customers. 

So don’t select a focus group of Gen Z customers if you’re offering a product for immediate retirement planning. Similarly, 82-year-olds might not be as interested in skate gear as teenagers.

Measuring and evaluating customer feedback

In the previous section, we mentioned the need to follow up with customers after making changes. Always check they’re what your customers needed to solve their problems.

But this shouldn't be a one-time thing. Customer preferences, needs, and desires change over time. Regularly collecting customer feedback means you can track how your KPIs change over time.

This will allow you to analyze trends and changes in customer sentiment and get a jump start on improving lagging customer loyalty. 

It will also allow you to catch areas for improvement and growth early, ensuring you remain competitive in your industry. 

The purpose of collecting customer feedback is to improve your customer satisfaction scores. 

Simply making the changes customers want is a fine way to do this, but it isn't the only way. 

Let's see how you can go above and beyond with your feedback collection process to wow your customers:

Responding to negative feedback and addressing concerns

Negative feedback is a sign of a frustrated customer, particularly when unsolicited. Ignoring that feedback will only frustrate them more. 

When you get negative feedback, acknowledge their pain points. Respond promptly and empathetically and tell the customer whatever steps you're taking to fix their issues. 

Sometimes, customers have unreasonable requests. If you can't address the customer's concern, explain the situation openly and honestly while respecting their opinions.

Building customer loyalty and retention

When you frequently collect and act upon customer feedback, you'll develop a culture of continuous improvement. This can make a profound impact on how customers see your brand. 

You can go further by making an effort to show your commitment to customer-centricity. 

In an earlier section, we mentioned how public roadmaps can achieve this. You can get the same results by mentioning the improvements in a newsletter, on your social media, or in prominent places on your website.

Leveraging feedback to optimize the customer experience

A key driver of customer loyalty is the customer experience. You can gather extensive information about the customer journey using customer feedback and analytics tools.

You'll be able to identify pain points that prevent customers from achieving their goals or make it significantly harder. Removing these pain points improves the customer experience. 

The data you collect will also allow you to tailor new products and services to customer preferences. 

As you get to know your customers better, you'll be able to anticipate their needs and proactively work to address them.

If everything you've read so far seems hard to keep track of, that's because it is. 

Thankfully, you’ve got plenty of fantastic customer feedback management systems to choose from. But with many tools available, it can be hard to decide which ones to use.

Been researching customer feedback management platforms for hours? Don’t worry; we’ve curated a list of highly trusted tools that work well together or individually:

Qualtrics

This experience management platform offers tools for customer, employee, product, and brand experience. It provides advanced survey capabilities, statistical analysis, and real-time insights to help organizations make data-driven decisions.

Zendesk

Zendesk is a customer service software suite that includes tools for support ticketing, self-service options, and omnichannel communication. It helps businesses manage customer interactions and gather feedback across multiple channels.

Hotjar

This behavior analytics tool combines heatmaps, session recordings, and feedback surveys to help businesses understand how users interact with their websites and collect user feedback.

Intercom

Intercom is a customer messaging platform that streamlines communication between businesses and their customers. It offers live chat, chatbots, targeted messaging, and customer support ticketing features.

UserVoice

This product feedback and customer engagement platform helps companies collect, prioritize, and act on customer feedback. It offers features like idea forums, roadmap planning, and customer surveys.

SurveyMonkey

SurveyMonkey is an online survey tool that allows businesses to create, distribute, and analyze surveys. It offers a range of question types, customization options, and basic analytics for gathering customer feedback.

Dovetail

Ready to turn data into decisions within minutes? Dovetail is an all-in-one platform that helps businesses collect, organize, and analyze customer feedback from various sources. 

Dovetail’s advanced customer insights software provides features like survey creation, feedback tracking, sentiment analysis, and advanced reporting.