Launching your customer experience program is exciting. You’re suddenly collecting lots of valuable data and analyzing it, and probably also wondering - what do you do with all this information now?
Set up a closed-loop feedback program. It will help you take action on the information coming in from your customer experience program and use it to improve the customer experience and increase customer loyalty.
What is closed-loop feedback?
Closed-loop feedback is when you respond to customer feedback directly - you close the loop by following up with the customer and acting on their feedback.
Closed-loop feedback helps your business manage customer feedback promptly and continue the conversation with your customers instead of ending it when they submit their feedback.
For example, let’s say you send out a Customer Satisfaction Score (CSAT) survey to every customer after purchasing. One customer responded to the survey, telling you that she received a lesser product quality than she anticipated.
Many businesses simply incorporate this feedback into their data - and maybe it even spurs a change for the better. But the customer doesn’t know this because it isn’t communicated.
On the other hand, in a closed-loop feedback system, you would respond to the customer about her complaint. You might apologize for not meeting her expectations, offer a solution or a discount, and thank her for her feedback. If you make changes based on her feedback, you let her know.
She is in the loop now, and your business has opened a dialogue that could save the relationship.
Advantages of closed-loop feedback
When customers submit negative feedback about an experience or a product to your business, ignoring it can cause even more issues. And opening a dialogue with the customer through your closed-loop customer feedback program has many benefits.
Improve customer relationships
Your relationship with your customers is the heart of your success. If you’re actively soliciting feedback from your customers, you’ll hear about negative experiences sometimes.
And if you don’t respond to that feedback, customers will feel frustrated, and the relationship suffers. Closed-loop feedback strengthens that relationship with communication instead.
Increased customer loyalty
Thirty-two percent of customers stop doing business with a brand they love after just a single bad experience, according to research by PwC. Closed-loop feedback gives you a way to fix those bad experiences, so they don’t turn into a lost customer.
Improve employee experience
Closed-loop feedback doesn’t just benefit your customers - it also helps your front-line staff deliver better customer experiences as well. They will feel empowered to take action to resolve the issue. And when they repair a customer relationship, they’ll feel a sense of satisfaction, which is good for employee engagement.
Closed-loop feedback allows your business to quickly identify and fix customer pain points, which can help increase customer retention. And that boost to customer loyalty and stronger customer relationships doesn’t hurt either.
Since it costs 5 to 25 times as much to gain a new customer as to retain an existing one, retention and loyalty can increase your revenue and decrease costs.
Increase feedback volume
When customers provide you with feedback, they’re taking time out of their busy lives to do so. And the only reward they’re looking for is recognizing their negative experiences.
If they don’t feel their feedback is going to anyone who will act on it, they’ll stop providing input, and your feedback volume will decrease. That has significant impacts on your ability to gather data about positive experiences, negative ones, and other areas where customer feedback is essential.
Who benefits from closed-loop feedback?
Closed-loop feedback benefits both your business and your customers.
Your customers benefit from a closed-loop feedback system because they’re heard. When feedback is acted upon, it makes them feel valued by your company, and that’s amplified when changes are made based on their experiences.
Customers also benefit because they get the opportunity to resolve problems directly with a customer service agent who is equipped with the information they need and empowered to act on their behalf. They receive a faster and more satisfying resolution to their issues, and they don’t need to wade through conversations with multiple departments to get it.
Your business reaps all the advantages of closed-loop feedback discussed above - and that adds up to a powerful engine for business growth and increased customer loyalty. Poor experiences won’t have time to linger in your customers’ minds.
Additionally, your customer experience team will have a continuous source of data and insights to help them hone the customer experience.
Creating a closed-loop feedback system
Now that you know the benefits, you’re likely wondering how to create a closed-loop feedback system in your own business. Here’s a guide to setting up your own closed-loop feedback system.
Targeted customer feedback
To create a successful system, you can’t use just any customer feedback - it needs to be targeted to help you identify negative customer experiences. And these experiences must be significant enough to merit action.
Your customer feedback needs to be:
Timely: You should use feedback collected as soon as possible after a customer interaction or event to ensure feedback is accurate and the experience is top-of-mind.
Actionable: The feedback you solicit from customers should give you a straightforward course of action. Avoid vague questions or ones without a clear purpose - you want to ask questions you can analyze and share with your organization quickly.
Effective customer feedback methods
There are many methods of collecting customer feedback for your closed-loop system. Choose a mix of the ones that work best for your business and your customers. You should prioritize ones that allow you to collect timely and actionable feedback from respondents.
Examples of feedback collection methods
Microsurveys ask only one question, and they typically pop up when a user is in the product or already on your website. They’re easy for customers to answer and don’t require much time or navigation away from their task.
These surveys are great to check in quickly on a targeted question or offer immediate feedback on an experience to help close the loop.
Much like microsurveys, in-app surveys are short (1-2 question) forms that pop up while a user is in your mobile application. In-app surveys can help identify issues in your mobile app quickly so you can close the loop with customers.
Net Promoter Score® surveys
NPS® surveys ask respondents a straightforward question: How likely are you to recommend the company or products to a friend or colleague? They are an excellent measure of customer loyalty.
Transactional NPS surveys are beneficial in closed-loop feedback systems. They allow you to ask customers how a recent interaction with your business affected their loyalty and likelihood to recommend. Then you can close the loop to repair potential damage to the relationship.
Customer satisfaction surveys
Customer satisfaction surveys track satisfaction levels, either overall with your brand or with a specific transaction or interaction. You can ask customers how satisfied they were with a recent interaction with a purchase or your business.
When customers are left unsatisfied, that offers an opportunity to close the loop and address the causes of dissatisfaction.
As their name suggests, these surveys are more in-depth, containing more questions. However, don’t ask too many questions, or respondents will speed through them or skip your survey altogether. A survey between five to 10 questions is ideal.
These surveys are less helpful for offering immediate feedback on urgent issues. But they can help your organization gain deeper insights into negative or positive customer experiences that can assist in closing the loop with customers.
Every customer has a different experience with your company. You don’t want to ask customers who just made their first purchase about their long-term satisfaction with your business. That’s why finding a way to segment your customers effectively so you can target questions appropriately is essential.
Segmentation gives you the flexibility to engage customers based on their customer journeys. You can segment customers based on a recent interaction in many potential ways:
The channel where the exchange took place, such as your mobile app, website, or on the phone with a customer service representative
The type of event or interaction, such as making a purchase or reporting a problem
The level of engagement with your brands, such as any loyalty program status they hold, level of annual spend, or length of time they have been a customer
Segmenting customers manually as events happen isn’t possible, so you need to set up smart, automated segments to pull in customers right away.
Automation where possible
Creating a closed-loop feedback system that is timely and effective can only be achieved with automation - it’s simply too time-consuming otherwise. You should automate multiple parts of the feedback process, including:
Segmenting your customers
Creating reports based on the feedback
Once your segmentation efforts are complete, you also need to decide how to interact with customers to close the loop. How will you engage them to get their feedback? And how will you take action based on that feedback?
The second question is especially critical. For example, if a customer responds to your post-transaction NPS survey with a response of 0, you will need to set up an automated workflow to trigger someone to respond to that feedback.
Perhaps a ticket is automatically created when a low score is given, with the feedback details included. That ticket needs to be assigned to a customer service representative and prioritized, so the customer receives a follow-up quickly.
Automation is all about ensuring that the right people have the information they need to take action right away after a negative customer experience. There are many systems available that can help you achieve this, including GetFeedback’s customer experience platform.
A method to track your efforts
Responding individually to customer feedback is essential for your closed-loop customer feedback system. But it’s also vital to track your overall efforts so you can identify and fix pain points in your customer journey.
You need to have visibility into the customer touchpoints that create positive experiences and which ones need improvements. Plugging your closed-loop data into existing customer experience dashboards, or creating a dashboard specifically for this purpose, ensures that the right people see this data at the right time.
Characteristics of an effective closed-loop system
Every closed-loop feedback system looks a little bit different. Some are customized to your customer journey and your business. But some overall closed-loop feedback best practices will help you build an effective system no matter what industry you’re in or customers you’re serving.
It must be timely. Responding to a customer complaint weeks or months later isn’t effective, and many problems are urgent. Your system needs to allow your team to take timely action to resolve issues.
It must be accurate. Your customer service team needs to have accurate information. Otherwise, they will waste time and possibly frustrate the customer.
It must be proportionate. Not every complaint warrants a response or reaction. These must be a way to weed out the minor issues, such as a customer not reading the product information, allowing reps to focus on the more significant problems.
Closed-loop feedback and customer experience
How closed-loop feedback & CX relate
Closed-loop feedback is a critical part of your customer experience strategy. You’re gaining a valuable window into various touchpoints in the customer journey by implementing a system to check in directly with customers when they provide feedback.
Fixing issues for one customer can solve problems in your customer experience as a whole. Your closed-loop feedback system can help refine your overall CX approach too. It opens the door for stakeholders across the organization to get involved with your CX design.
This opening can lead to a great understanding of the CX program as a whole, from small issues to the bigger picture. And it can increase knowledge sharing between your CX team and front-line staff, leading to greater cooperation and understanding.
While your closed-loop feedback system can’t be the entirety of your CX management program, it can play a significant role in refining and enhancing the customer experience.
How creating a closed-loop feedback system improves CX
Closing the loop when a customer has a negative experience can help unearth problems affecting many people. Negative feedback can help you find UX design issues, significant customer experience challenges, and opportunities for training your customer service staff.
Insights from your closed-loop feedback system are powerful sources of information when you’re mapping the customer journey. The feedback you gather can highlight pain points in the customer journey that decrease customer retention or revenue. And most importantly, they can effectively provide solutions for addressing these pain points. Data from your closed-loop feedback can also be integrated into your CRM.
Tips for bridging the gap
One of the challenges of implementing an effective closed-loop feedback system is connecting your front-line teams with your CX department. Creating a governance structure that allows both groups to share their experiences and knowledge regularly can help.
But the gap doesn’t stop with these two teams. To ensure your system is successful, your entire organization must become customer-centric. That means everyone must focus their efforts on putting the customer first in everything from big visions for the future to small actions today.
Becoming a truly customer-centric organization can require breaking down silos that stop departments from sharing necessary customer information and instilling a customer-focused mindset in every employee and executive.
Closed-loop feedback systems are an incredibly powerful way to deepen relationships with your customers and increase their loyalty. They can even turn negative customer experiences into positive ones. But setting them up, and running them effectively, is no small task.
However, running your closed-loop feedback system can be simple with the right partner. GetFeedback’s comprehensive CX platform lets you listen to your customers wherever they are and act on their feedback in the systems your teams are already using to get work done.
That makes setting up an effective and efficient closed-loop feedback system fast and easy. Both you and your customers will see the benefits right away. So don’t wait to get started.