What is Customer Feedback? How Is It Used To Improve Your Business?

What Is Customer Feedback and Why Is It Important? How Does the Customer Feedback Loop Work? What does the Customer Satisfaction Score indicate? It is the article to answer questions such as.

What is Customer Feedback? How Is It Used To Improve Your Business?

Customer feedback is all the feedback you receive from your customers about your products or services. It becomes impossible to touch the lives of our customers, when we do not know what is right for them, making this truth the sole truth of our business. Likewise, when we don't know what's wrong for the customer, we can never avoid that mistake. Because businesses are doomed to fail without customer feedback. Feedback is the champions' breakfast.

If we cannot learn how our customers are feeling, what drives them, or where they are disappointed, we will be a failed business. The world's leading CEOs also share this view. Let's listen to Bill Gates, founder of Microsoft company, and Jeff Bezos, founder of Amazon.

The most unhappy customers are your business's biggest learning resource - Bill Gates

We perceive our customers as invited guests to the party and think that we host them. Our job is to spend every moment on improving all aspects of the customer experience. - Jeff Bezos

You can see, customer feedback is the ultimate reality of businesses. If you read customer feedback well and truly listen to data from call center calls, it is inevitable that you will put your business on a solid foundation.

In our article, we will talk about the importance of customer feedback, how to collect, share and implement it, which will help your customers to be satisfied with the product / service they receive and accelerate the development of your business.

Why Is Customer Feedback Important?

What is the benefit of collecting feedback from customers?
Loyal customers are much more involved in growing a business than in sales or marketing efforts. Therefore, if you do not ask the customer for the feedback, you will never be able to understand what is the customer satisfaction. When you do not know what the driving force of satisfied customers is, trying to create customer loyalty will not go beyond being an empty endeavor.

According to the research,

Businesses' acquisition costs of new customers are 5 to 25 times higher than the costs of satisfying existing customers.
The number one resource for gaining leads is referrals.
Highly engaged customers have a 90 percent higher product purchase rate than non-interactive customers, and such customers spend 60 percent more per transaction.
The main factor that grows a business is the excess number of returning customers, in other words, customer loyalty. Not 30 seconds and billions of lira worth of ads on TV channels. And the starting point of customer loyalty is customer feedback. Now let's talk about how to collect customer feedback.

How Does the Customer Feedback Loop Work?

There is a strategic system used to collect and implement customer feedback. This system called "Customer Feedback Loop" works as follows:

Ask the customer for feedback.
Categorize / classify the feedback received.
Act on the feedback / Act on the feedback.
Keep track of customers who share their feedback.
Let's take a deep dive into the feedback process.

FIRST STEP: REQUEST FEEDBACK FROM CUSTOMER

What kind of questions should we ask the customer during the feedback? Although the nature of the questions varies depending on the goals of your business, the following points should generally be prioritized:

Do we need to understand trends in customer satisfaction that change over time?
Do we need to identify customer service issues that disappoint the customer?
Should we try to uncover product problems to improve our product?
In this part of our article, we'll cover best practices for all these scenarios.

1 - Feedback Questions to be Asked to Understand Changing Customer Satisfaction Trends Over Time

If you want to determine the general tendencies towards customer satisfaction, you should first evaluate how satisfied / happy or unhappy your customers are with your business. Then, you can try asking the same questions to the customer periodically to understand the change in satisfaction over time. Thus, you can identify changing customer trends and easily solve problems related to the process of acquiring new customers.

The most common methods you can use to measure customer satisfaction trends are:

Net Promoter Score (NPS)
Customer Satisfaction Score (CSAT)
Social media monitoring
Let's examine the pros and cons of each option now.

a) Net Promoter Score (NPS)

At this stage, "How would you strongly recommend us to your acquaintances?" The answer to the question is sought.

The NPS score is used to measure the likelihood that someone will recommend your product or service. In this calculation, it is essential to make an evaluation on a scale ranging from 1 to 10 points for the product / service in question.

The NPS is calculated from the percentage of supporters (customers who will recommend you) minus the percentage of those who disparage (customers who would not recommend you). This is a tactic often used to measure customer loyalty. Customers who fall into the 'sponsor' category tend to have an average customer lifetime value 3 to 8 times higher than those in the 'disparaging' category.

Also, according to studies, companies with the highest NPS scores in their industry tend to grow at least 2 times more than their competitors.

The pros and cons of using NPS are:

Pros

Your intention (ie your likelihood of reapplying to the business) is questioned, not your feelings (how satisfied you are with the product / service).
It is easily understood by survey participants and interpreters.
Since only one question is asked, the rate of participation in the survey is much higher.
It greatly affects customer loyalty with its growth rate.

Cons

Customer feedback is difficult to calculate and takes a lot of time without measuring tools.
Cultural prejudices in Turkey brings together-for example, "8" in Japan with a score of "8" can have different meanings.
It is difficult to understand how good or bad a score is due to extensive assessment data.
It is difficult to make inferences as it will provide an open-ended customer feedback.
It is difficult to reconcile these data with much "more objective metrics" such as user data or CRMs (customer relationship management) where teams can analyze different responses of user / customer groups.
The customer may be biased depending on the last point of contact with the business or the mode of the day in question.

b) Customer Satisfaction Score (CSAT)

The Customer Satisfaction Score (CSAT) indicates how satisfied a customer is with a particular interaction with the business. “How satisfied are you with your purchase / service / product experience? Could you give us detailed information about our experience and support us to improve ourselves further next time? " etc. The answers of the questions are sought.

Customer satisfaction score questions are often found at the end of live chats or articles on product / service procedures. The aim is to get an idea of ​​how beneficial your solution is to the customer.

The pros and cons of using the CSAT score calculation method are:

Pros:

It is short and intuitive. A simple question with a clear answer is asked.
The rating scale is open to all kinds of adaptations. This means that you can change the answers to best suit your business target audience — for example; You can use emojis, text, stars or any of the numeric rating scales.
Since only one question is asked, the rate of participation in the survey is much higher.

Cons:

It brings along cultural biases - the excess of cultural differences in people's satisfaction ratings does not always give the desired result.
It is difficult to understand how good / bad a score is due to extensive assessment data.
There is a serious lack of actionable feedback that will allow you to understand what you can improve as a business.
It is difficult to reconcile these data with much "more objective metrics" such as user data or CRMs (customer relationship management) where teams can analyze different responses of user / customer groups.
The customer may be biased depending on the last point of contact with the business or the mode of the day in question.

c) Social Media Tracking

In addition to collecting points from NPS and CSAT surveys, you can also find out what your customers actually think of you using brand tracking tools such as Google Alerts or Mention. Facebook, Twitter, TripAdvisor etc. Third party review sites will also help you understand how your brand is being mentioned on social media or forums.

So why is social media tracking so valuable?
Customers talk about your business constantly. These conversations include being compared to your competitors. Conversations can be based on soliciting support, reproaching a disruption, or bragging about how much they love your business. Whatever the purpose, every business wants to be the center of attention for conversations. Customer feedback is important not only for your public relations or marketing teams, but for almost every department, from customer support to product development and even sales.

However, it is extremely difficult to review countless posts across multiple channels and can result in a serious waste of time for your business. Sometimes customers don't tag or link you, which makes things even more difficult. At this point, tracking tools come into play. Tracking tools make it easy for you to find people speaking about you and to reach out to them when necessary and take notes that will improve your service experience, and at this stage, customers do not need to contact you directly - just tag your business's social media account using "@".

Even without using a specific survey question, you can measure customers' satisfaction trends over time, and take a general pulse check of what is being said about your business.

As for the pros and cons of social media monitoring ...

Pros:

The “Mention” - (Mention) status of brands is a natural process. Therefore, businesses do not need to put pressure on the customer to fill out any questionnaires.
This method is completely organic and allows you to clearly measure the true opinion of customers about your business.

Cons:

It is difficult to make a qualitative or quantitative measurement - which makes it almost impossible to track the change in business performance over time.
It is difficult to link social media comments to a large-scale CRM (Customer Relationship Management) system.
It's entirely up to you to weigh and weigh the pros and cons of each potential measurement method we've listed and find out which method is best for your business. Whichever method you choose, you should remember that the important thing is to ask the same question at specific time intervals — for example, every month.

There are two main benefits to asking the customer the same question consistently:

It identifies the difficult stages of the customer journey.
It reveals certain behavioral patterns common to all happy or unhappy customers.

Let's say, thanks to these questions, you notice that customer satisfaction takes serious blows in the product shipping process. At this stage, the next question to ask should be: "What is the reason why customer satisfaction has dropped so much during the shipping process?"

If you hadn't reached your customers through feedback surveys, you would never have noticed that satisfaction fell, especially when sending the product to the customer, right? Hence, it would be impossible for you to fix this problem.

Now suppose you want to understand the demographic pattern of 3643 NPS participants who rated your business with a score of 9 or 10 (NPS Supporters). After the data analysis, notice that 90 percent of the supporters are technology companies with more than 200 employees. You can now use this data to improve your marketing and sales strategies, right? This indicates that you can double companies with similar demographics, and represents a 20 percent increase in closing rates and a 54 percent increase in customer retention rates.

Bingo!

If you hadn't asked your customers for regular feedback, you wouldn't be able to uncover these trends either.

So let's move on to the next stage and focus on customer feedback, where you can identify trends from your customer service team.

2 - Feedback Questions to Identify Annoying Customer Service Issues

Another question type to be included in customer surveys is about customer support and / or customer service leaders. Customer service leaders can analyze team performance with these questions.

The most frequently asked questions are: “What is the attitude of our team in serving our customers? Are our customers happy? Can we provide fast and quality customer service? " "Do the answers given by our representatives satisfy the customer?"
 
As for the types of questionnaires that will be used to detect problems related to customer service ...

Net Promoter Score (NPS)
Customer Satisfaction Score (CSAT)
Customer Effort Score (CES)

Now let's evaluate the pros and cons of each method in terms of customer service.

a) Net Promoter Score (NPS)

As you remember, NPS measures the likelihood that the customer will recommend your product or service.

So, how does this score help you analyze the effectiveness of your customer support team? Or can we say that it is an accurate measurement tool compared to different options?
Potentially yes!

Here are the pros and cons of the method:

Pros

It is easily understood by survey participants and interpreters.
Since only one question is asked, the rate of participation in the survey is much higher.

Cons

It is limited in terms of the wide range of emotions that can be expected to follow from customer interaction - a single interaction generates only one emotion.
Not all customers are created equal, some customer support modules have much lower NPS scores even if they can successfully manage particularly challenging segments.
There is no clarity on what you asked or how your question relates to the customer's problem.
A rating scale that is universally valid and easy to understand should be used - stars, thumbs, and numerical rating scales can make you have difficulty analyzing customer feedback.

b) Customer Satisfaction Score (CSAT)

Customer Satisfaction Score (CSAT) questions measure the degree of customer satisfaction with a particular interaction with the business.
 
CSAT questions are used at the end of live chats or informative articles to get an idea of ​​how beneficial your solution is to the customer.

Customer satisfaction score questions show how satisfied your customers are with the overall support service interactions, from reaching your contact information, the time spent on handling the problem, conversations with the support team, and the follow-up process.

Pros

It is short and intuitive. A simple question with a clear answer is asked.
The rating scale is open to all kinds of adaptations. This means that you can change the answers to best suit your business target audience — for example; You can use emojis, text, stars, or any of the numeric rating scales.
Since only one question is asked, the rate of participation in the survey is much higher.

Cons

Satisfaction is a subjective concept and can mean different things to different people.
There is a serious lack of actionable feedback that will allow you to understand what you can improve as a business.
It causes cultural biases to come to the fore - it does not always work better if cultural differences in people's satisfaction metrics are as wide as they can get.
It is difficult to reconcile these data with much "more objective metrics" such as user data or CRMs (customer relationship management) where teams can analyze different responses of user / customer groups.
The customer may be biased depending on the last point of contact with the business or the mode of the day in question.
 
c) Customer Effort Score (CES)

The Customer Effort Score (CES) helps you gauge how much effort customers need to put in solving their problems: “When you consider your experience as a whole, you can say how easy it is for our business to solve your problem?” etc. questions are within this method.

There is a difference in the questions you ask to measure the difficulty level of a problem and the satisfaction after the solution - standard customer satisfaction questions. Unlike NPS questions that emphasize gaining "supporters" to recommend your business to others, the customer effort score focuses on creating an "effortless experience" for customers.

In other words, one of the most effective methods of increasing customer loyalty is to build the customer experience on the "low effort principle".

According to the studies, 96 percent of the customers with high CES scores showed a significant decrease in the loyalty rate, and the same probability was observed to be around 9 percent in the businesses with low customer effort scores.

Pros

It is the strongest predictor of future purchasing behavior. (Research has shown that 94 percent of customers who have an effortless sales experience report that they will make a repurchase, while 88 percent state that they will increase their spending.)
It is assumed that 81% of customers with high effort scores will speak negatively about the company and action is taken to prevent this negative guidance.
It is a very applicable method compared to surveys such as CSAT or NPS score.

Cons

It does not provide data about the customer's overall relationship with your business. Compared to all other options, it is much more difficult to define the area (s) that businesses will improve on in this method.
Lack of segmentation can be seen according to customer type.
Whichever method you choose - NPS, CSAT, or CES - in identifying customer service issues that can be very frustrating for customers, the key is to ask for customer feedback immediately after the end of the support service and / or live chat.

This increases the response rate, while also helping to reduce the biases that can arise and change responses because the feedback survey arrives late.

This way, you will have an idea of ​​which team members are performing the best, as well as improving the customer experience. What's more, you can improve the training you provide to your customer support team, and you will have a much better advantage in hiring the best performing employees at all times.

3 - Feedback Questions to be Used in Product Development and to Reveal Product Problems

The final set of questions is often for founders, management teams or product development team leaders: “What is the role of our product in adding value to our customers' lives? Can customers achieve their goals with our product? How did the "X" find the new feature? Are there any essential features they feel lacking? " etc. questions are in this scope.

It is possible to answer these questions in three ways:

NPS score
In-app surveys
Suggestion board

a) Net Promoter Score (NPS)
The NPS score helps us analyze product problems experienced by customers.

Pros

It offers a high level of benchmark to help us understand how satisfied customers are with your product / service.
The customer's intent (probability of reapplying) is questioned, not his emotions (degree of satisfaction).
It is easily understood by survey participants and interpreters.
Since only one question is asked, the rate of participation in the survey is much higher.
It greatly affects customer loyalty with its growth rate.

Cons

The NPS score is not diagnostic - it does not tell the business what is wrong with the product / service.
It is difficult to get feasible feedback.
The biggest challenge is to reach out to problem customers and invite them to give a more explanatory talk on the "why" of their dissatisfaction. You need to monitor the entire group of detractors and passives individually.
However, the biggest problem with NPS surveys is that the questions do not adequately address specific product issues. This is where in-app product surveys come into play.

b) In-App Surveys

Are you selling a software product? Then a feedback portal integrated directly into the app will be enough to get feedback on the product.

This helps you identify any problems, general or specific, experienced by customers. But how? Here are a few sample questions you can ask:

"{Add product feature}: what does it help you achieve?"
"What problems are you having with {Add product feature}?"
"What features do you think we overlooked for {Add product name}?"
In-app surveys are usually NPS etc. supports other common surveys - it is also important that you combine quantitative data obtained with NPS with qualitative feedback.

Remember that there are hundreds of in-app questions you can ask.

Pros

It is a flexible method - you can ask the customer about almost any question you see fit — evaluating a new design, thoughts about launching a new feature, etc.
It provides you access to the customer / user through the current application phase.
It provides the context on which area / what the user / customer is looking at in the application before the response.
It allows for responses from within the application to keep all feedback in one place.

Cons

It is difficult to screen open-ended responses and gain insight through these answers.
It has low response rates.

c) Feature Request Boards

A large part of the product creation process is determining the new features that customers desire. The easiest way to find out is to ask themselves directly what they want.

For this reason, creating a “feature request board” is a widely used tool to measure product feedback from existing customers.

For example, Loom company - a Google Chrome extension used to record video in seconds - is one of the companies that publicly shares its product roadmap. According to Loom co-founder Joe Thomas, the benefits of sharing the product roadmap publicly are:

“There are two main benefits of sharing the products we plan to create as Loom publicly. First of all, we instill confidence in people and companies that use our software about what will be available and when. The second benefit is that we can get feedback from our users more frequently - because this way our users can see what we are trying to create and create an environment where they can confirm or object to our next step. ”

Pros

Customers know that they play an active role in the product development process. You can make your customers feel that their voices are heard.
When you can collaborate with your customers on your product ideas, you create a sense of community and strengthen customer loyalty.
By notifying users / customers that you are working on their suggestions, you also have an interaction channel that will make them appreciate them for their contribution.

Cons

It can cause discrimination among customers - you tend to fulfill the desires of the customer base you want to address the most, ignoring the others. Thus, people who use your product less often are less likely to give feedback or withdraw product recommendations.
Demand boards are doomed to be a low-impact method unless customers are encouraged to present their ideas clearly.

SECOND STEP: CLASS CUSTOMER FEEDBACK

Congratulations! Now you know how to request customer feedback. Your next step should be to set up a scalable system to classify the data you have acquired.

If you don't categorize the feedback, you're likely to have to deal with thousands of pages of spreadsheets. Just thinking about it will be enough to burn your brain!

So how do you organize customer feedback? There are three main categories that you can categorize customer feedback:

1. Product feedback

2.Customer service feedback

3.Marketing and sales feedback

You can also divide each macro category into different subcategories, which we'll cover in a moment. Let's also point out that instead of dealing with pivot tables or excel tables to compile data into spreadsheets and examine trends, you can save time by using software that helps you organize feedback.

It is vital to take into account both positive and negative feedback (regardless of categories) at this stage. How can you make the best decision for customers without listening to them? It is imperative that you be open to all kinds of feedback, good, bad and ugly for accurate decisions.

1 - Product Feedback

By requesting feedback on the product from the customer, you have a huge amount of data. Therefore, it is inevitable that you want to sub-categorize this information.

Basic product defects - These are issues that prevent users from achieving the core value of your product and must be addressed immediately. For example, if you have an instant messaging product but your users cannot send messages with this product.
Minor product defects - This group refers to minor issues with the product that do not distract or do not hinder the transmission of product value. Continuing with the messaging program example, the problem here may be that your users cannot use a particular emoji in their messages.
Feature requests - In our previous section, we covered the issue of feature requests extensively within the framework of the Customer Feedback Loop. What to do at this stage is to prioritize the feedback received based on a mix of the volume of the feature request, the potential impact of creating that feature, and the opportunity costs for each selection.
You can manually categorize feedback via a spreadsheet, assign labels to specific columns, or create a PivotTable or Excel spreadsheet - but be aware that this can take a lot of time.

For those of you looking for an easier way, we can recommend customer feedback software that will allow you to classify feedback by creating smart tags or automatically categorizing each data.

2 - Customer Service Feedback

The next feedback classification method is for your customer service feedback. The most suitable environments for such a demand are;

Live chat
Information texts / articles for solving customer problems and
E-mail tracking (after support requests are finalized).
When you finish the live chat, you will usually encounter a survey question like this:

"How many points would you rate your live chat experience between 1 and 10?"

When you finish reading the information texts on the product / service, you will come across the following question:

"Did our article help you solve your problem?"

Alternatively, after closing a support request or sending a follow-up email to the customer, you can send a survey question on how they found the process.
 
Regardless of what the survey you use to collect feedback, all the data you will obtain will be collected in a single center to analyze customer feedback.

This makes it easy for you to clearly define the statements in reports and find answers to the following questions:

"What are the most common questions the customer asks?"
"What kinds of problem-solving articles don't provide users with the answers they're looking for?"
"What is your average response time for live chat?"
"At what stage of the customer journey is there a congestion?"
Creating a sustainable system to measure the effectiveness of customer service is also important for the process of growing your business. If we do not know what our customers are struggling with, we cannot improve our customer service. This means that customers will prefer other businesses over us.

3 - Marketing and Sales Feedback

The last method you will use to organize customer feedback is to focus on marketing and sales.

Let's say one of your sales reps mistakenly promised the customer a feature that wasn't expected to be available in the next six months. When the client realizes this fact after signing the contract or sending his first monthly payment, he will most likely be upset. And your customer team will be bound to practice dealing with angry customers a lot - because the customer is promised something your sales team will never be able to deliver.

The same can happen in the marketing process. For example, let's say your marketing team has indicated that the product you are selling on your website is compatible with Microsoft Outlook. Have a customer purchased your product because it is compatible with Microsoft Outlook and later find out that this is not true. Wouldn't this cause major problems for your support team?

When you have a tight customer feedback loop that the marketing and sales teams will use, it is possible to eliminate these types of headaches completely.

Another strategy you can use to categorize customer feedback is to use sticky notes to visually classify different groups of feedback.

The first thing to do is review your notes and highlight the highlights. Then you have to write an (online) sticky note for each of the interviews. When creating sticky notes, try to group common themes together. Considering the number of notes you will prepare, it is likely that you will have a great mess when this job is completed. To avoid this confusion, you should immediately get rid of any notes mentioned by only one customer, and keep those that have been mentioned two or more times.

Next, focus on prioritizing groups of notes according to the number of customers addressing the concepts subject to the note. Finally, prepare a summary of the key concepts and screenshots of the sticky notes. You now have an easy-to-read report of real customer quotes, with the findings arranged in order of importance!

THIRD STEP: TAKING CUSTOMER FEEDBACK TO LIFE

Now that you have categorized customer feedback, it's time to act based on feedback! The first step in the process of implementing / implementing feedback should be to share the available data with the following three teams:

Product development team
Customer support team
Marketing and sales teams
Feedbacks, email alerts, etc. You can also share them in real time using the methods - or you can choose to share feedback from the customer in daily, weekly or monthly summaries, ie periodically.

It is extremely important to go to certain regulations based on feedback. Most of the time, you have witnessed businesses ask for feedback, but then don't take even the slightest step towards your feedback. Put yourself in the customer's shoes, wouldn't it be an uncomfortable experience?

You will be content to pour it into the tables and keep it, why would you ask the customer for feedback?

Because the customer satisfaction survey is an invaluable source of information for new ideas to be tested, it is also a great indicator of how to prioritize improvements. Having this type of data helps you learn what customers think, create case records to try new things, or predict the impact of any product / service improvement on the user experience.

The important thing is to share the right information with the right teams over preferred time intervals (real-time, daily, weekly, monthly).
 
Another issue to consider is who filled out these questionnaires. Yes, we should always share customer feedback with the right teams, but sometimes the person being surveyed may not be the decision maker. In this process, the number one mistake you will make is not being able to understand who is holding the ropes on the customer side. Even if your end users give you 10 points, you will not be able to see the return on investment as the decision maker will not be surveyed. The decision maker, on the other hand, has to act on quantitative results, not on the feedback of the end users. The most effective way to solve this problem is to be prepared for the situation and to find the way to convey the feedback of the end user to the decision maker - by phone, e-mail, etc.

In the process of implementing feedback, it is important to know who is making the decisions on the customer front. Often times, we run our surveys on people who do not have decision-making powers, which means that we will have a skewed view of the process of understanding existing data or solving problems.

FOURTH STEP: FOLLOW THE FEEDBACK

More than the feedback they share with businesses, customers want these two things:

Make it easy to give feedback
To feel you can make your voice heard
The first step can be solved with software for customer feedback. The second is a little more complicated.

People don't bother to share their feedback with any business that makes them think they're talking to the wall. In a customer experience group research, it was found that 43 percent of the customers did not give feedback because they thought the business did not care.

Crazy, isn't it?

You cannot make your customers feel how much you value their positive and negative feedback, they do not want to give feedback. If you don't get customer feedback, you're putting the future of your business in jeopardy.

Correctly ending the customer feedback loop is the most important and most neglected step of a good customer satisfaction campaign. Getting your team to thank every customer who has completed the cycle is critical to ensuring that customers continue to send you feedback.

When you do not follow up on customer feedback, you risk losing their trust in your business.

It doesn't matter whether you're using NPS or a generic customer satisfaction survey. The most common mistake people make is that from working to getting teams / company ready to act on the basis of feedback, they can't find time for action itself. If a customer gave you the same feedback twice, that is, if you didn't address the issue immediately after it was raised in the first survey, you lose your credibility. This means that customers will not fill out any feedback surveys in the future.

You cannot put every feedback you come across into practice, but it is possible that you can work towards every feedback. Even if you respond to the customer or let him know that you have considered their suggestions - even if what the customer requested is not something you will do - it is good that it does not leave him unanswered. Be as specific as possible so you can earn customers' trust.