Closed Loop Feedback: Why It Matters To Your Business

Philip Cleave
September 8, 2023
Picture illustrating why feedback is so crucial to your business

We all know how vital survey data collection and survey analysis are, but what you do next in terms of communicating with customers is equally important.  

When your customers leave feedback, irrespective of their reasons for leaving it, those customers will be waiting for an acknowledgment or update from your company. So, being able to create an efficient, organized, and candid closed-loop feedback system to tie up loose ends with your customers is vital.

Being heard and understood is really important for most customers. So, if they’ve taken the time to answer your survey questions, but don’t see any significant follow-up or improvements from you this can be really discouraging for them. Consequently, this can lead to an increase in disloyalty, where more of your customers choose to move to one of your competitors instead.  

This is why it’s essential to understand what closed-loop feedback is, why it’s important and how to build successful closed-loop feedback systems.

What is closed-loop feedback?

When we talk about closed-loop feedback, we’re essentially referring to the practice of responding to a customer’s survey feedback. This is then used to better understand their feedback, resolve their pain points, or inform them about how their insights will be used to make improvements to the products, services, or customer experience strategy we’re delivering for them.

Why closed-loop feedback matters to your business

There are many reasons why closed-loop feedback is really important to your business. Here are some of key ones.

Reduced customer churn

The way that you handle customer feedback can have a bigger impact on your business than you might first think.  

For example, according to research just over half of consumers would stop using a brand after just one bad experience. By contrast, 70% of consumers said they would be more likely to do business with an organization again if their complaint was handled well the first time.

Customer churn, where customers choose to no longer use your product or service, can happen for a variety of reasons. However, if the reason for this is a poor customer experience, you have a major opportunity to repair this relationship if you can follow up with customer feedback.  

You can close the loop with your customer and resolve their issue directly over email, or hop on a call and let them know that their feedback will be taken into consideration for future service or product improvements.  

Companies with open-loop feedback systems, where feedback is never resolved or acknowledged just leaves customers feeling disgruntled because it didn’t warrant a response from the brand. When customers ask for feedback, they have an expectation that you will address it. So, when organizations let that feedback fall through the cracks, they risk losing those customers for good.

By contrast, closing the feedback loop helps resolve issues at source. It allows the customer to feel heard and provides valuable insights to improve the overall customer experience and ultimately reduce customer churn.

An enhanced reputation

These days what’s being said about a brand’s reputation online really matters. This is because most customers will look at public-facing reviews first, to get an impression of your business and if they want to do business with you based on the reputation they see.  

When you follow up on feedback it gives you a chance to prevent a disgruntled customer from posting a negative review online following a less-than-satisfactory experience. And even if a negative review about you has already been published, the way that you respond to that review can put your brand back in a positive light. In fact, 45% of consumers say they’d be more likely to visit a business that responded well to negative reviews.

So, you can see from this that customers are more likely to recommend a product or service if they have a pleasant experience after submitting feedback or making a complaint. While a brand that goes above and beyond to resolve a customer issue is ultimately viewed more positively by that customer.

Boost to revenue

Closed-loop customer feedback helps improves the customer experience from the ground up. So, when customers are happy, and their insights acknowledged, they’re more likely to recommend you to others and speak highly of their experience with your company. In addition, when such opinions are expressed publicly it can go a long way with encouraging on-the-fence buyers.

While other retailers may offer the same product or service, customers will tend to gravitate towards the brand that delivers the best customer experience and has the evidence to prove it. And in many cases, they’ll be willing to pay more for it too.  

Ultimately, customer experience is what differentiates your brand in a competitive market and can lead to increased revenue.

Essentials for building your closed-loop feedback program

Having read about the benefits to be gained from implementing a closed-feedback system, I’m sure many of you are keen to get a program in place.  

However, before you do anything else, you need to have two main components in place first.

Ticketing system

This is your alert system, which raises a request in your system that you have an unhappy customer. Through this you should be able to set up thresholds such as having a negative or neutral NPS score, in order to control what types of comments are fed into your closed-loop system.

Case management system

Using this kind of system should enable you to track your tickets all the way through to resolution, assign tickets to the right team members and then monitor the progress of each one. The best systems also allow you set and track targets. For example, you may set a target of 85% of all complaints to be resolved within 24 hours – so you always know how your customer service team is performing.

The best closed-loop programs also feature real-time dashboards customized by role, so the right people always have the information they need to resolve a problem.

How to create your closed loop feedback system

When you’re having to field lots of customer feedback responses, it can be a little tough trying to manage them all.  

However, with a closed feedback loop system in place, no questions or issues posed by your customers will go unnoticed and it will help you to make improvements. Here are some ways you can help close the loop on feedback.

Devise a strategy

The reason why you need to devise your own strategy for a closed loop feedback system is because there are many ways of approaching it - most of which depend on your business goals.  

You need to know which are the areas that have the greatest impact on your revenue. For instance, if there are a lot of comments that are positive when you send out a feedback survey, you need to find out which are the features of your product or part of your service that your customers appreciate more and work on strengthening them. In contrast, if there are very few customers who have given you negative feedback, you should take the time to respond to each of them to know what upset them enough to leave your business with a poor rating.

You also need to see if you can identify any common themes in your feedback surveys, both with regards to positive and negative feedback, so you can be clearer about what you need to strengthen and improve. This can include anything from having greater clarity about the risks you face if a lot of customers leave you for a competitor to identifying innovative ways to close the churn resulting from negative customer experiences.  

Use the right surveys and metrics

In terms of the tools you use to collect and analyze customer feedback, you need to be using the right surveys and metrics. This is important, because when you’re surveying your customers in an intentional way, you’re more likely to obtain the accurate data you need to understand your customers’ expectations.

We’ve already talked about the importance of customer experience. Given that it’s now one of the most important determinants in whether a customer decides to purchase from you or stay with you, you need to make sure the experience you deliver is as good as it can be, which is where closed-loop feedback comes in.  

Customer experience is concerned with every interaction that a customer ever has during their buying journey with you. However, some businesses can forget to close the loop on feedback, which can be detrimental to that customer experience. That’s why when we’re trying to better understand our customers closed-loop feedback and resolve any pain points resulting from this, using surveys and metrics that are associated with customer experience is the best way to achieve this.  

The key ones are as follows:

Net Promoter Score (NPS) surveys

One of the most popular is the Net Promoter Score (NPS) ® survey, which looks to measure your customers’ loyalty towards your business.  

By asking them the following NPS® score metric question below, you can gage how well you closed the feedback loop on any questions or issues they had.  

How likely is it that you would recommend [our company] [our product] [our service] to a friend or colleague?

The assumption here is that those who were most content with how you closed the loop on their feedback would rate you with a higher NPS score, meaning they would be more likely to recommend your company to others.

For more information on NPS and how to measure it, you might like to visit our Net Promoter Score page.  

Customer Satisfaction (CSAT) surveys

As the names suggests, customer satisfaction surveys, are concerned with gaging your customers’ satisfaction with your business.  

So, with regards to measuring how well you closed the feedback loop with them, you could adapt the CSAT score metric question below, to ask each customer.

How satisfied were you with how we followed up on the [issue] [question] you had with us?

The customer is then asked to rank their satisfaction on a scale of 1 – 5, where one represents being highly dissatisfied and five indicates being highly satisfied.

You then need to take the sum of these scores and divide them by the total number of respondents to get your overall CSAT score, which should sit something between zero and 100.

For more information about CSAT, you might like to visit our Customer Satisfaction Surveys page.

Customer Effort Score (CES)

In general, the customer effort score (CES) metric, is concerned with measuring how easily customers can interact with you, whether that’s something such as navigating your website and paying for products, to how easily they find interacting with your customer support teams.

The CES metric, is based on asking your customers the following question below.

‘How easy was it to do X, Y, or Z?

However, in the context of this piece, question could be adapted as follows.

‘How easy did you find it to interact with us when we followed up on your feedback?

You can calculate your CES score by finding the average of your responses. This involves taking your total sum of responses and dividing them by the total number of survey respondents, to get your overall CES score, which should lie somewhere between 1 and 5.

If you would like an alternative and quicker way to generate your score, you might like to try  our CES calculator.

Include all customers

There will always be times when you have customers that don’t want to leave their feedback. However, with the right tools, you can close the loop with them too.  

Identify the customers who did respond and find out what were their key motivations were for using your product. Knowing such details can help you gage what kind of customers are the ones who didn’t respond to your feedback survey.

Telling your customers about how you solved issues for other customers who responded, through something like a case study will be a huge boost for the ones who didn’t respond as they will realize that they have missed out on getting some changes done.  

Subsequently, closing the loop on feedback is a critical customer experience strategy that you must always be working on.  

Collect feedback at all your touchpoints

As we mentioned earlier, the customer experience is concerned with every interaction in the customer journey. Consequently, businesses need to realize that each customer touchpoint can be a problem area, if it's not properly nurtured and managed.

To get a better handle on this, businesses not only need to identify their key customer touchpoints, but they also need to map them out and implement an effective system of collecting, analyzing and responding to feedback at these touchpoints.  

Fortunately, with the right survey software in place this is achievable. The best systems include API and web hook tools that allow you to integrate and pass survey data to other essential systems you use, and enable you to set up event-based triggers, workflows and notifications. While features such as live dashboard trends can allow you to monitor what’s going on with your NPS, CES and CSAT scores, and quickly act if you see anything that you must immediately respond to. Such features are all available with our Enterprise price plan.

Keeping on top of what matters most to your customers

We hope you enjoyed reading this blog and if you weren’t already, you’re now more informed about the value of closed-loop feedback and having a system to keep on top of it.

Being heard and understood is one of the most important things to a customer. And if they don’t quickly get a significant return action or improvement from you, they’re likely to take their business elsewhere.  

However, if you can implement an effective closed-loop feedback system to respond quickly and positively, you’ll be well on the way to delivering the levels of service and experience that keeps your customers happy and your business successful.

Make sure you’ve got all your customer experience touchpoints covered

If you’re to successfully close the loop on all your customers’ feedback, you need to ensure that you’re managing and nurturing all your customer experience touchpoints. Yet, you can only do this effectively if you’re using the right survey tools.

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If you would like more information then please get in touch.