The key to sustaining a thriving business is to keep your customers happy. In today’s hyper-digital world, there are innumerable online platforms for customers to express discontent, which makes customer experience management imperative for a business to succeed.
Two-thirds of customer loyalty is driven by customer experience, according to Gartner. And given the fact that customer loyalty is elusive, the importance of how companies handle customer feedback grows manifold. The best way to fine-tune customer experience is by analyzing customer feedback, including customer complaints. And customer closed loop feedback is considered highly effective in extracting the maximum benefits from customer feedback.
What is closed-loop customer feedback?
Research shows at least 32% of customers turn away from brands they prefer after just one bad experience. Additional to collecting customer feedback, it is imperative to address it, especially customer complaints, and offer satisfactory resolutions quickly, consistently, and amiably.
“Closed loop” indicates responding directly to customer feedback, to better understand your customer’s viewpoint and heighten customer experience. Closed-loop customer feedback can be described as a foundational step in customer retention management also. It can offer immediate and accurate insights into customer experience, which is essential for a successful long-term CX strategy.
Why integrating customer closed loop feedback is essential?
- Prevents revenue losses – One bad experience can potentially cause revenue loss and a damaged reputation. An Accenture survey showed that US companies lose almost 1.6 trillion USD from poor customer experience. With customer closed loop feedback, companies can quickly pinpoint the main problem areas that create poor CX and take necessary corrective measures to turn negative short-term experiences into positive ones.
- Keeps CX strategies flexible and effective – Closed loop feedback is essential to reap long-term benefits, as it helps companies upgrade their overall CX strategies. It allows critical stakeholders of an organization to understand how to manage the nitty-gritty of the customer experience management programme.
- Adapts with evolving customer expectations – Customer expectations are as dynamic and transitory as ever; what works today might phase out tomorrow. With a general feedback system, there is always a risk of leaving customers feeling unheard or undervalued by not paying attention to the details. Closed-loop feedback helps reveal the company’s shortcomings.
- Helps in reputation management – Brand reputation and customer experience go hand in hand. More than 50% of people rely on word-of-mouth in choosing a brand which further underlines the importance of closed loop customer feedback. It helps customer-centric organizations to act in real-time based on feedback to salvage poor CX and make it positive.
Essential parameters to build an efficient closed-loop feedback system
To build a successful closed loop customer feedback system, you need the following key elements –
- Appropriate feedback collection techniques or systems
- Timely and accurate feedback from targeted customers
- Pre and post-feedback details using automated workflows
- Segmented method to deal with different customers based on their categories
- Customer closed loop feedback tracking system
- Governance policies to continually optimize your CX strategies while closing the feedback loop
It is important to understand that a closed-loop feedback system should be mapped to the entire CX journey and not only to solitary experiences. It can also be integrated with your CRM system.
Benefits of closed loop customer feedback
With customer closed loop feedback, your organization will benefit as well as your existing and future customers.
By closing the loop, you allow your customers to feel heard and valued; they can resolve issues directly with an agent from your company. And they will surely talk to others about how your company turned a bad experience into a good one.
Remember what Donald Porter, former VP of British Airways had said, “Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.”
On the other hand, the key stakeholders of your organization gain accurate insights to evaluate their current CX endeavors and optimize them continually. They can better fine-tune the current performance to further elevate it.
To get the most from customer closed loop feedback, companies need to act promptly and be quick to resolve issues. For that, they should invest in appropriate technological infrastructure to gather feedback, alert, and flag critical feedback so that the CX team can immediately take action.