One benefit of today's focus on collecting and analyzing data is the ability to keep a continual pulse on customer experience and not have to wait three months for a market research report on customer sentiment. Most companies can quickly quantify customer experience with metrics like customer satisfaction (CSAT), likelihood to recommend (NPS), retention, and of course, customer lifetime value.
While having these metrics calculated and regularly reported is of significant importance, it can also encourage myopic focus on the number itself. Any time the number moves up, it must mean we're doing a good job (and look at what "my department" has contributed!). When the number moves down, we're doing a bad job (and look at how "their department" messed it all up!).
Instead of spinning wheels chasing the movement of a number on a graph, try another approach: create a closed feedback loop with your customers to create true, lasting improvement within your company.
What is it?
A closed feedback loop ensures that insight from negative feedback truly "feeds back" into the way your company makes its decisions.
This sounds obvious, but many companies struggle to appropriately capture the huge value left in surveys, online reviews, help emails, contact center transcripts, etc.
Too many companies are hyper-focused on financial considerations like revenue without realizing that holistically, customers with bad experiences are the ones who are not returning to your company (which you can see if you pay enough attention via your customer lifetime value model) and are also telling their friends and colleagues about their bad experience (much harder to see).
Without extracting learnings from negative feedback and having a procedure for how these learnings are collected, prioritized and acted on, the root causes of customer churn and dissatisfaction will never be eliminated and you risk your company succumbing to companies that are becoming incrementally better at delighting their customers.
A new KPI
Consider a new KPI to track: percentage of resolved detractors.
Any time your company receives negative feedback, don't let it sit out in the ether or in your database collecting cyber-dust. Make sure you track what action was taken to 1) reach out to the customer to address their complaint and 2) what insight was flagged from the negative feedback.
While a company that is new to this will start out at 0%, you'll be amazed how quickly - once the right processes are set up - the company can hit 5%, 10%, 20%, and eventually strive to follow up on every piece of negative feedback. This is especially the case when the company has put in the effort to understand the financial implications of unresolved complaints from detractors.
Don't have the resources to follow up on all negative feedback you receive? How should you prioritize it? It's dead simple: sort feedback by customer lifetime value. You'll be guaranteed to be addressing the concerns of customers who are your most loyal, long-term, telling-friends-and-family customers first.
Track the change in your CLV
Once you have a closed-loop system started, run a simple test. You don't need much for this - even manually reaching out to fifty detractors to start with and resolving their complaints will give you a good sample to start with.
Compare the future business you earn from these fifty detractors with fifty who you did not reach out to. The results will amaze you. Even detractors who said they would "never do business with you again" will be likely to change their mind after personalized outreach.
Don't forget to share the good feedback!
While it's important to stop churn by resolving negative feedback and trying to win back dissatisfied customers, it's arguably even more important to make sure your company has a defined way to share good feedback too to enable a culture of recognition and empowerment. It's incredibly good for employee morale to see feedback from delighted customers whose lives were made easier by a particularly helpful colleague - especially if you can get the feedback directly to the employee who made the customer's day!
One more step toward customer-centric thinking
You may already have some form of closed-loop feedback at your company. Again, I encourage you to try to create a robust system for tracking exactly what percentage of negative feedback is followed up on, even if simply with a message apologizing, saying you've noted the feedback and will investigate, and encouraging the customer to give you one more chance.
If you don't have any closed-loop feedback system yet, you may feel discouraged by the lack of attention that your leadership pays to the matter. After all, reaching out to customers - especially at scale when personalized - incurs cost. My suggestion here is two-fold:
- First, as mentioned earlier, make sure to quantify the impact of a pilot outreach program to show the positive return on investment.
- Second, take something to the boardroom other than statistics. Focus on the stories of specific detractors and how outreach is sorely needed for these customers or you'll lose them forever.
Armed with data on ROI and true stories of customers who desperately need attention, you'll have a strong chance of shifting the mindset of your leadership to be more customer-centric and hopefully give you the resources you need to set up the beginning of a closed-loop system.
Try it today!
Effectively closing the loop on negative feedback and sharing positive feedback is one of the most important customer relationship activities businesses can engage in. Regardless of your company's level of maturity when it comes to acting on feedback, there's always room to improve.
What's one thing you can do - whether it's a new KPI to track, a pilot test to run, or a process to rethink - to improve how your company learns from customer feedback?
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