Customer feedback is crucial for understanding how to improve your product or service and retain customers. While every company needs to be in the business of attracting new customers, optimizing the mix between existing and new customers is essential to maximize profitability and long term growth. At Surveys & Forecasts, LLC we have learned a few things about customer feedback programs in our nearly 30 years in the marketing consulting business.
Most importantly, dollars allocated against existing customers also have a multiplier effect: existing customers buy incrementally more with each dollar invested; they generate recommendations to others who have yet to try a product; and there is a halo effect in earned (vs. paid) media from external influencers and reviewers. Based on return on ad spend (ROAS) or investment (ROI) measures, a dollar that is efficiently allocated to existing customers produces returns of 5x-20x when compared to new customer acquisition. For the gearheads in the room, think of a flywheel: the effort to keep a flywheel spinning is far less than starting it up from a dead stop!
Marketers also tend to forget about the impact that outlier observations can have from customers who take the time to report their experience with the product or service. Specifically, feedback helps identify areas of improvement and helps you stay ahead of the pack. Regrettably, programs that focus on the single metric such as NPS use it as a report card or something to be bragged about in financial circles. A truly well-designed customer feedback program can more than pay for itself in both retention and areas of improvement to keep your business flywheel humming.
Here is our basic yet effective plan for gathering customer feedback and increase retention:
Step 1: Determine Your Feedback Channels
Every business is different. Consider multiple channels for gathering customer feedback and pick only those that fit with your business model. You can choose from include outbound surveys to random subsets of customers, social media feedback, email support, phone support, live chat, and in-app feedback. The best mix depends on your business and the type of feedback you truly need. For example, surveys are generally better for collecting more objective quantitative data. Social media has the advantage of being instantaneous, but also carries the negative bias typically associated with this channel (That is, those commenting via social media tend to be more emotionally charged than feedback gathered through a neutral instrument such as a survey).
Step 2: Create Your Feedback Plan
If you are serious about understanding what customers are thinking and feeling, don’t rely on a single measure of customer satisfaction. But don't overthink it either – start simple. Outline core questions you need answered, and start with those as the basis for your plan. Make the bulk of your questions numerical for tracking purposes, but save space for open-ended comments avoid leading or biased introductions or scales. Consider the timing of feedback requests: don’t be annoying or ask too often. Space out your requests and coordinate them with other channels. Most importantly, make them relevant to your customer's experience.
Surveys following a transaction are common, but you may want to wait for some time to pass to capture the full experience. Factor in the purchase cycle in your category to develop the right cadence. Attempt to reach out to those who are buying your product or service less frequently to get the opinions of light or infrequent buyers, as this can surface problems that regular buyers might overlook (experience has taught us that this is the most challenging cohort to get feedback from). A future article will specify the core set of measure you should be asking your customers.
Step 3: Affirm Customer Feedback
To encourage your customers to provide feedback, incentives such as discounts or free trials are helpful – but do not be so generous as to create positive response bias. Make the feedback process easy: use automated outbound survey tools, chatbots, or in-app feedback forms.
Always show customers that you value their feedback by responding promptly and taking immediate action on their suggestions. Nothing is more powerful than letting a customer know that they have been heard! Regrettably, we are in an age of over-reaction, so be stoic when customers rail against your company for tiny infractions. Not everything is a crisis, and filtering out the signal from the noise is your primary job.
Step 4: Trending & Benchmarking
Once you have gathered feedback, it must be appropriately tabulated or visualized and combined with text analysis and trended. Where you can, benchmark your data: statistical process control methods are helpful (e.g., control charts with upper and lower bounds) and exception reporting that includes open-ended feedback are also wonderful tools. Look for trends and extract areas of improvement. Prioritize the factors that have the biggest impact on customer retention. Once thoughtfully analyzed, push the results as far up into the organization as possible. Meet with your entire team and discuss strategies for addressing the feedback. Craft your storytelling, communications plan, and response protocol. All of this requires teamwork.
Step 5: Take Action
Use the insights gained from the feedback to make improvements to your product or service. As previously noted, don't overreact to individual respondent comments – unless they are clear red flags. Decisions with significant organizational impact need to have enough data to support change. Once you have followed your internal protocol, communicate the changes back out to your customers to show them that you are listening to their feedback. This will not only improve their experience but is a covariate of loyalty and retention. Your feedback program should be designed to listen and respond, and affirm a customer's opinions and the time it took to provide them. Respect the fact that there are humans on both sides of the conversation.
So get out there and build your plan! Use ongoing feedback from customers to improve your product or service, increase customer retention, and stay ahead of the competition.
If your feedback program needs help - or is yet to be built - please reach out.. For more information about our customer satisfaction programs, please visit the Surveys & Forecasts, LLC website or get in touch at email@example.com.