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The Importance of Customer Feedback for Your Business

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    Did you know one negative feedback can lose a company as many as 22% of its customers? Just four such feedbacks can drive off 70% of potential customers — something any business would struggle to bounce back from.

    Here the importance of customer feedback comes into weightage. Businesses are in a never-ending quest to find out what customers need and deliver it accurately to them instantly to meet their expectations. 

    52% of people around the globe believe that companies need to take action on feedback provided by their customers, which makes gathering customer feedback critical for every business.

    Customer feedback, both good or bad, are equally important for businesses, big or small. But the good news is that companies can prevent negative feedback with one simple action: listening to their customers.

    What is customer feedback? 

    Customer feedback refers to the opinions or responses provided by customers about whether they are satisfied or dissatisfied with a specific product or service. The main objective of collecting customer feedback is to measure their level of satisfaction.

    Acquiring feedback from customers not only helps to improve how customers feel about your brand or your products, but also to improve how your service team performs, how engaged your front-line agents are, and how to train your team to handle future customers inquiries.

    For example, you can use quarterly NPS scores to track overall brand sentiment from your customers and review any additional comments provided to fine-tune different aspects of your business. 

    Customer feedback channels

    By paying close attention across all available channels – whether that’s a customer service call, a social media comment, or a click-to-chat interaction – you can stitch together a unified view that is integral to your decision-making.

    The common customer feedback channels are as follows:

    • Website – Online website surveys are a popular way to gather customer feedback. You can get any form of feedback with surveys, including text, ratings, and reviews. Also, a single survey can combine different types of questions.
    • In-app – Such surveys are the best way to get customer feedback for SaaS companies and retailers. In-app surveys are short pop-up survey requests displayed to app users to ask them to share their experience using them.
    • Email – Sending emails is a direct and personal way to ask for feedback from both existing and new customers. Holo Taco, an online seller of nail polishes, is an excellent example of a business that collects customer feedback with emails. 
    • Social platforms –  Listening to social media conversations can be a huge help with collecting and using customer feedback to maintain a reputation. By monitoring social media you can automatically collect brand mentions. 
    • Phone – Many companies record phone conversations to understand customer pain points and train the support team for better engagement. 
    • One-to-one interviews – Customer interviews offer rich, detailed information about their experiences and help to identify what drives purchase behavior.

    10 Reasons why customer feedback is important for businesses 

    The benefits of customer feedback include a better understanding of customers, greater customer satisfaction, more referrals, and higher revenue. Additionally, customer-centric companies are up to 60% more profitable than product-centric ones, owing much of their success to improving thanks to customer feedback.

    Let’s enumerate some reasons that highlight the importance of getting customer feedback for your business.

    1. Customer feedback identifies aspects of product improvement

    Businesses might have the best expertise in the industry in which it operates, but the professional knowledge will never be more valuable to business performance than customer insights.

    If a customer is taking the time to interact with you, whether satisfied or unsatisfied, they expect you to take action. The importance of customer feedback is that it provides valuable insights into what is working well about your product or service and what should be done to make the experience better.

    The opinions shared by customers help you ensure that the end product will actually meet their expectations, solve their problems and fulfill their needs.

    It is very important to know what suits the customers well, what was their least favorite aspect of it, and why. Showing that you truly listen to your customers’ opinions sells better than anything. After all, the product is made for them, so it should be as close to what they desire as possible.

    2. Analyzing feedback helps in taking better business decisions

    Another key importance of customer feedback system is that it is one of the most reliable sources for tangible data that further can be used in taking business decisions. 

    Customer insights will help you understand clients and their needs more profoundly.

    The undiluted customer insights will help you understand clients and their needs more profoundly. Taking their suggestions in consideration and thanks to that find out where you should allocate your money to get the highest return on investment. 

    For instance, instead of product development, you need to focus on promoting your brand to get bigger exposure. Customer feedback is a valuable source for such data, but you must learn how to listen to it and how to translate it into actionable takeaways for your business.

    Tips to follow:

    • Never ignore the customer’s voice. They are the ones who use your products and services, so they know best what could be improved to make them even happier. 
    • Use customer feedback at all corporate levels and across all departments in your company. Insights will help you develop your products, improve customer service, and manage customer satisfaction. 

    3. Customer feedback improve brand credibility & social proof

    Positive feedback is a great way of counteracting the effects of negative comments and can help to increase your business’s performance. 

    92% of consumers say they read testimonials and customer reviews when they are deciding to make a purchase. It shows that someone was happy enough with your service or product that they took the time out of their busy day to say something good about it. 

    More than convincing people what is worth buying versus what isn’t, reviews also serve as social proof for determining what to think about a certain business.

    So apart from providing social proof for customers looking to make a purchase decision, positive customer feedback also provides social proof for how people perceive and what they should say about a given product or service.

    You can add positive reviews and testimonials to your website, increasing the credibility, trustworthiness, and integrity of your products and services. 

    4. Collecting customer feedback makes them feel involved 

    Asking customers for feedback you communicate that their opinion is important to you. You involve them in shaping your business so they feel more attached to your company.

    You make them feel that your primary business goal is to solve their problems and fulfill their needs, not to get their money. It puts a customer in the central position of your company and this is the right way to run a business.

    Listening to the voice of the customers helps you create stronger relations with them. It is the best way to gain valuable brand advocates who will spread positive word-of-mouth for you. 

    5. Deliver better customer experience

    Digital marketing is largely based on customer experiences. For businesses, to sustain the success they have to learn how to become much more customer-centric in their approach.

    One of the best ways to ensure your business meets customer expectations is through harnessing the power of feedback. By creating a systematic approach to collecting feedback, you can listen and learn from your customers. 

    Giving your customers a platform helps you understand how they think about you. You can continually ensure to offer the best customer experience possible, while also building it into future product development.

    As customer service standards have become one of the main differentiators, even the smallest advantage can make a huge difference.

    And, for the same reason, using customer experience feedback to continually improve your service levels can deliver an excellent experience that keeps you ahead of the competition.

    6. Acquiring customer feedback increases customer loyalty

    Customer experiences drive buying decisions and are directly related to brand loyalty. So, with loyal customers five times more likely to purchase again, which is why getting customer feedback to learn why they are loyal pays off. 

    Customer feedback is essentially one of the critical links to increasing customer loyalty and experiences.

    Here are the key ways customer feedback benefits in improving customer loyalty. 

    • By asking your clients for feedback you communicate that their opinion is important to you. You involve them in shaping your business so they feel more attached to your company. 
    • Listening to your customers’ voices helps you create stronger relationships. it is the best way to gain valuable brand ambassadors who will spread positive word-of-mouth for you. 
    • Customers always appreciate when you ask them if they are satisfied with your service. It shows you actually value their opinion and that you are here for them, not the other way around. 

    7. Identify unhappy customers proactively and reduce churn.

    Satisfied customers choose to stick to your brand for a longer time. On the contrary, unhappy customers will eventually find a better alternative to your business and leave. 

    Here comes the importance of customer feedback. Acquiring and analyzing customer feedback helps you determine if your clients are satisfied with your service and detect areas where you should improve that helps to reduce customer churn.

    One important tip for businesses to follow is to ask for customer opinions regularly so that you can always keep a finger on the pulse. 

    When a dissatisfied customer expresses disappointment, you can immediately react and find a solution to resolve an issue. It is the right time to win a client back and even increase his level of loyalty. 

    In many cases, when an unhappy customer who faced a problem with your service, got a prompt solution shows more preference and loyalty to your brand compared to a customer who has never been disappointed with your service.

    8. Helps to measure customer satisfaction

    Customer satisfaction and loyalty is a crucial factor that determines key business benefits like increased market share, lower costs, or higher revenue. 

    There is a close connection between customer satisfaction and business performance. Therefore, there is no doubt that you want to make sure your clients are happy with your products and services.

    The best way to find out if you meet customer expectations is to get their feedback. 

    Customer Satisfaction Score (CSAT) – By using rating-based questions, you can easily estimate the satisfaction score and consequently predict your company’s financial health.

    Net Promoter Score (NPS) – It is the most accurate metric that helps to measure, manage and improve customer satisfaction. The metric is based on one simple question that finds out “how likely it is that a customer would recommend a brand to a friend”. 

    The response options for the loyalty questions are based on a 0–10 point rating scale, with 0 representing extremely negative and 10 representing extremely positive. 

    As it is a simple methodology every business can apply it in customer satisfaction management.

    9. Provides a clear understanding of your customer journey

    Collecting customer feedback and further in-depth analysis provides valuable insights to understand the entire customer journey. Collecting feedback across the customer’s preferred channel helps to get direct feedback.

    Invaluable direct customer feedback plays a vital role in building a positive customer perception of your brand. If done with best practices in mind, customers will perceive that you care about their experience, whether they complete the survey or not.

    Tips to follow:

    • Customer feedback solutions should be thought of as a relationship-building tool, not just a survey.
    • The key to success is a solid feedback loop. Let the customer know in a timely manner that their feedback was received and what is being done with that knowledge. In turn, this drives positive brand reception, establishes relationships and encourages more feedback.

    10. Customer feedback helps to understand and follow industry trends

    Customer feedback objectives do not have to be singular. They can also be layered goals with effects that will reach throughout the business. 

    One of the importance of customer feedback is that it provides insights to understand and follow the latest technological trends among consumers.

    For example, a new competitor in the market may introduce new and improved technology that potentially threatens the older technology a company sells. If customers indicate they would prefer and buy this technology, the company will need to consider switching to the new technology.


    Customer feedback is the first step to getting closer to your customers. It gives valuable information about what went right and what went wrong when the customer interacted with the brand.

    In today’s world, customer feedback comes from a variety of sources. From dynamic social media to the ever-prominent email, customer feedback can take any form. 

    No matter if you set up a mechanism or not, customers will surely talk about the business and the products and services they are using. They always share feedback on your business. So why not receive that feedback and work constructively to maximize our profit through customer satisfaction.

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    Snigdha Patel

    Snigdha Patel is a customer experience researcher, author, and blogger. As part of REVE Chat, she focuses on helping organizations maximize customer experience using omnichannel messaging and conversational AI.

    She creates contextual, insightful, and conversational content for business audiences across a broad range of industries and categories like Customer Service, Customer Experience (CX), Chatbots, and more.

    Serving as the lead content strategist, Snigdha helps the customer service teams to leverage the right technology along with AI to deliver exceptional and memorable customer experiences.

    Being a customer service adherent, her goal is to show that organizations can use customer experience as a competitive advantage and win customer loyalty.

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