Importance of Customer Feedback in Formulating Strategy

Do you know what your customers want? What are their needs?

Ask your customers these questions directly to get their answers. Don’t try to figure out their answers because you’re not your customers. Listening to your customers and applying customer feedback is a critical element of your business success strategy. Do you know why? Read on to find out.

Just like product research, market patterns and competitor analysis, customer feedback is a valuable source of insightful information for your business. According to a study conducted by Moz, online reviews influence about 67% of all customers who buy products from a brand for the first time.

According to another survey by Bright Local, 88% of customers trust online reviews just as personal recommendations. With the ability to help businesses make profits, customers are so valuable that it’s important for businesses to find out what makes them tick.

Polls, surveys, product reviews, engaging on social media, tracking complaints through email and educating customers are great ways of collecting feedback from your customers. Analyze the information to better understand your clients. As social media rages, the voice of the customer is now louder than ever. This is vividly illustrated in recent publications like this patient experience survey trend article for example which highlights how real-time feedback can significantly impact business strategies.

Acknowledge and address customer grievances to keep them happy for the good of your business. Here are the top 4 reasons why listening to your customer is critical to the success of your business:

Top 4 Benefits of Customer Feedback

group feedback

1. Improves business Products and services

Listening to your customers ensure you create products and services that meet their needs. As a critical aspect of the product development process, listening to customers for their feedback ensures your end-product doesn’t just satisfy their needs, but also solves their problems.

Innovative technologies support the creation of useful products designed to surpass customers’ expectations. Integrating customer feedback and product or service development gives businesses a competitive edge and produces brand advocates for even more business through word-of-mouth. It also fosters customer loyalty.

2. Fosters measurement of customer satisfaction

Customer feedback provides the information you need to measure if they’re satisfied with your brand, product or services. With information on the level of customer satisfaction, you can determine whether your products meet or surpass their needs. Emails, one-on-one conversations, websites, phone calls or mobile apps can help get customer feedback.

Questions based on ratings can help you track your customers’ happiness and satisfaction levels over time.

3. Development of better customer experience

Customer feedback offers actionable insight to help you develop a better customer experience. An exceptional customer experience is the key to retaining happy customers and getting new ones through word-of-mouth referrals. Ask your customers what they want and use the feedback collected to develop consistent yet personalized experience buying from your business.

Unparalleled customer support services and experiences are the key to gaining loyal customers.

4. Improved customer retention

Listening to your customers for their feedback opens a direct communication line between you and your clients. When your customers are happy, they’re more likely to bring you repeat business. Address issues raised by unhappy customers to ensure they’re retained in your business for future sales.

Data collected from customer feedback can insight better decision-making. Listening also identifies brand advocates who often give high scores. Develop strong and mutual relationships with identified advocates. Consistently ask for referrals and testimonials to help boost more confidence in your business.

Customers are core to your business and listening to their needs is important to your business success. Their feedback helps promote prolonged business life. The more feedback you get the better. Listen to your customers to capture preferences, expectations, experiences and feedback to insight greater business success.

Importance of Customer Feedback in Formulating Strategy

The world of business has always been ruthless and cutthroat but has taken on a new edge of hyper-competitiveness among businesses and ever-increasing expectations from customers in recent times.

Any business that wants to rise to the top of the pack in such circumstances needs to understand the importance of customer feedback. The fact that your customers, the source of your revenue and therefore your lifeblood, can so easily provide you with detailed feedback about your business and your performance as an individual, is a powerful tool for businesses, but one that is overlooked all too often.

While customer feedback is a very powerful tool, like all tools, it can only be used to its full effectiveness when it is being used properly. Businesses who are willing to put in the time and effort to properly collect and analyze data from customer feedback will find that that data offers them perhaps their best chance at increasing customer satisfaction.

Collecting Feedback

Many businesses ask their customers for feedback at some point. Whether it is in the form of product reviews, surveys conducted in store, or data gathered from outside agencies who specialize in collecting customer feedback, it can often feel like every entity that we do business with is begging us for feedback.

However, despite the massive volume of feedback that is being handed over to businesses from their customers, if that data hasn’t been collected in the right way then it is as good as useless to the business in question.

Savvy businesses will combine the feedback that they ask customers for with objective data points that are immune from the usual biases (mainly the Hawthorne effect) that exist when asking customers for their feedback. Customers who are asked for feedback, and perhaps even offered an incentive, may not be answering the same way they would if they didn’t know that their answers would be relayed to the business.

In order to be effective, feedback should be collected passively and without the customer's knowledge. Obviously, if you intend to collect personally identifiable information, you must inform the customer.

Analyzing Feedback

The most effective way of ensuring that customer feedback is collected and used to its fullest extent is to hire a customer service manager.

A customer service manager will be trained in all aspects of managing customer relations, so having one individual who is qualified to do this is more effective than having a whole department who doesn’t know what they’re doing. See this for more information on customer service managers and how to look after them.

Implementing Feedback

Implementing the lessons that you learn from customer feedback is a specialized skill in and of itself.

You might think that feedback will make it obvious what needs to be done to improve your business’s performance, but it (actually) requires some careful consideration.

This is another reason why hiring a qualified customer service manager is a worthwhile investment for any business.

Customer feedback is a vital tool for any business.

After all, it is your customers that put money into your business and are responsible for keeping you afloat. Understanding what they do and don’t like about your business will allow you to tailor your approach in order to maximize profits.