There are plenty of ways you can leverage customer feedback and profit from it. In this entry I will try to explain why collecting customer feedback, whether prompted or unprompted, is crucial in managing customer satisfaction and loyalty, in customer retention, improving products and services, and in many more areas of your business. Sit comfortably and continue reading to discover the benefits of customer feedback.
What is customer feedback
Customer feedback is information provided by clients about whether they are satisfied or dissatisfied with a product or service and about the general experience they had with a company. Their opinion is a resource for improving customer experience and adjusting your actions to their needs. This information can be collected with different kinds of surveys (prompted feedback), but you can also find opinions and reviews your clients post online (unprompted feedback) and collect them using Internet monitoring tools. Both sources are important to get a full picture of how your clients perceive your brand.
Here are the top five reasons why customer feedback is important in business.
1. Customer feedback helps improve products and services
When you initially introduce a new product, brand or service to market you probably have an idea about customer needs. Market research that you conduct before the introduction gives you an idea if potential customers would be willing to buy it and also they can give you some tips on how you could improve it. However, only after your customers use your product or service you can learn about all the advantages, flaws and actual experience. On top of that, their needs and expectations evolve with time. Their opinions help you ensure that the end product will actually meet their expectations, solve their problems and fulfill their needs.
2. Customer feedback helps you measure customer satisfaction
Customer satisfaction and loyalty is a crucial factor that determines a company’s financial performance. It is directly linked to many benefits, such as increased market share, lower costs, or higher revenue. Many studies confirmed a close connection between customer satisfaction and business performance. Therefore, there is no doubt that you want to make sure your clients are happy with your products and services. Naturally, the best way to find out if you meet their expectations is to get their opinions. Using rating-based questions you can easily estimate the level of satisfaction and consequently predict your company’s financial condition in the future.
One of the most accurate methodologies that have helped many companies measure, manage and improve customer satisfaction is NPS. The metric is based on one simple question that investigates how likely it is that a customer would recommend a brand to a friend. Response options for the loyalty questions are based on a 0–10 point rating scale, with 0 representing extremely negative and 10 representing extremely positive. This methodology is both simple and universal, so every business can apply it in customer satisfaction management.
3. Collecting customer feedback shows you value their opinions
By asking your clients for feedback you communicate that their opinion is important to you. You involve them in shaping your business so they feel more attached to your company. Listening to their voices helps you create stronger relations with them. This is the best way to gain valuable brand ambassadors who will spread positive word-of-mouth for you. And I am sure you are aware that their recommendations is probably the most effective and, at the same time, the cheapest way to acquire new customers and become more trustworthy in the eyes of your current and potential clients.
4. Customer feedback helps you create the best customer experience
Today’s marketing is heavily based on the experiences people have with products, services, and brands. They do not buy Apple products just because they are good. They want to demonstrate their status and affiliation to a particular group. They do not buy Nike clothes because they are durable. They buy the courage to extend their boundaries. Therefore, if you focus on providing the best customer experience at every touchpoint clients will stay loyal to your brand. And naturally, the most effective way to give them amazing experience is by asking them what they like about your service and what should be improved.
5. Customer feedback helps to improve customer retention
Satisfied customer will stay with you. Unhappy customers will eventually find a better alternative to your business and leave. Customer feedback helps you determine if your clients are satisfied with your service and detect areas where you should improve. Thanks to asking for opinions regularly you can always keep a finger on the pulse. Each time a dissatisfied customer expresses his disappointment you can immediately react and find a solution to fix an issue. This is a perfect moment to win a client back and even increase his level of loyalty. In many cases, an unhappy customer who encountered a problem with your service, but you got it fixed straightaway demonstrates bigger devotion to your brand that a customer who has never been disappointed with your service.