Customer complaints are the least glamorous aspects of any business. Yet no organization – even Apple and Tesla – can avoid them. These complaints come in various forms – online and offline, written and verbal, direct and indirect, and so on.
In this article, we shall discuss how customer feedback can make or break your business, common mistakes that businesses commit while collecting it, and what we’ve learned from collecting and using customer feedback at Enjay over the years.
So let’s dive into the uncomfortable but important subject.
What is Customer Feedback?
Customer feedback is essentially what customers think about your product and service. Their opinions prove as a powerful tool to improve customer experience and adjust your actions according to their needs.
This feedback could come through a survey, a social media update, an email or phone call to your support desk.
According to Julia Hartz, CEO of Eventbrite, customer feedback is the ultimate truth. A business that pays attention to what customers say and listen to calls coming into the contact center stays grounded and in touch with its customers needs.
Is Customer Feedback Important?
Solving customers’ issues feels like time stolen from doing things that a business really wants to do – make more sales and earn more revenue. But these complaints and “disturbances” are, in Gates’ words, the best source to learn how you can make your business better.
Customer feedback helps improve your business in the following ways:
1. Increases Revenue
Customer feedback gives you insights into their pain points and what they really need. Working on these helps you improve customer satisfaction and eventually turn them into loyal customers.
Customer loyalty doesn’t just increase revenue but also reduces marketing costs. Loyal customers also refer people in their circles. And according to research, referrals are 4 times more likely to become customers.
2. Improves Your Product
Not paying attention to customers’ feedback means a business runs the risk of making customers unhappy. And while happy customers are generally silent, unhappy customers are very loud.
Thus, while prospects often don’t get to hear about your good work, they always get to hear about the work you didn’t do well.
On the other hand, paying attention to customer feedback means you know what’s working well in your product and what isn’t. It also helps you understand changing customer usage behavior and change in trends in the same.
Thus, you not only can offer a superior product but also stay ahead of the competition.
3. Improves Employee Engagement
Sounds strange, doesn’t it? How does customer feedback improve employee engagement and retention?
Working on customer feedback makes a business customer-centric instead of competition-centric. Every employee contributes to the ultimate goal of customer satisfaction. As a result, employees constantly stay alert and engaged.
And engaged employees are more productive and less liable to leaving the company.
These reasons have helped Enjay evolve as an organization over the years. And a lot of companies collect feedback from customers. Then why doesn’t it really move the needle for their businesses? Why don’t companies improve despite consistently deploying mechanisms to collect feedback from customers?
Why Customer Feedback Fails to Improve Businesses ?
1. Automating the Process
Automation is the in-thing today. Every business wants to automate processes to reduce work and increase efficiency. This automation has also become available for feedback collection through pre-recorded IVRs , online survey sheets, and outsourced data collection.
But this is as good as automating the process of collecting feedback from teachers about your child. It might be easy but it doesn’t let you understand the emotion behind the words. For customer feedback to be effective, it must have a personal touch to it.
At Enjay, we automate only assigning the task to collect feedback. Everything else – making calls, entering notes, following up – is done by human beings. We schedule five feedback calls per year to each client regardless of the size of their business with us. We ask them questions about how the software is functioning, where they’re coming across challenges, and so on.
This doesn’t just add the human touch; it also makes us identify the areas where customers need education and training.
Takeaway: Anything that involves interacting with human beings should not be automated. Retain the human touch with customers and they’ll reward you with long-term loyalty and insights worth their weight in gold on how to make your processes better.
2. Lack of Data Analysis
Customer feedback isn’t just in the form of spoken words. It’s also in unspoken ways like how they use your product and how much they engage with you.
A client of ours once reached out to 1,000 customers and asked if they would volunteer for a survey. Merely 50 agreed, out of which 40 surveyed customers gave poor feedback. The result was that the client assumed that 80% of their customers were unhappy.
But this was far from accurate. When they studied the number of repeat purchases that the remaining 900-odd customers had made, the volume was substantial. This meant that the majority of their customers were satisfied.
Takeaway: If you go by just numbers and what customers say, you could go so far down the wrong path that it could be too late to turn around by the time you realize your mistake.
3. Not Addressing the Root Cause
“There’s nothing so useless as doing efficiently that which should not be done at all.” – Peter Drucker
It’s easy to get so involved in quick fixes that we forget to look at the real reasons for problems to occur. The result is that while people might feel productive, they’re all running at the same spot.
Dharmesh Shah wrote a brilliant article where he shared about a time where his team saw a large number of calls getting dropped during escalations and transfers. They decided that the best solution was to improve the quality of the telephony system. That was until the head of the support team suggested the real problem may not be the phone system but that Tier 1 agents needed better training to solve customer problems without escalating or transferring calls.
Takeaway: Use customer feedback to understand how you can make their lives better with your product, not just how you can improve the efficiency of your own processes and systems.
4. Not Acting on Feedback
“If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the internet, they can each tell 6,000.” – Jeff Bezos
The worst thing an organization can do is to collect feedback and not act on it. Many businesses (especially ones with an AMC model) behave coldly with their customers throughout the year and only warm up to them when the AMC is due for renewal.
This makes customers feel unheard and disengaged. They don’t shy away from showing their displeasure anymore, especially in the age of social media.
Apart from our five scheduled feedback calls, we also ensure that someone senior from the company calls customers a month before their contract is up for renewal. This benefits us in two ways.
- Customers feel appreciated because they received calls from a senior member.
- More importantly, our senior members have a finger on the pulse regarding customer problems and get a deeper understanding of how customers see our products.
Takeaway: Customer feedback is the fuel that drives your growth engine. Don’t just let it lie in a container by the side. Use it effectively to elevate your business to the next level.
5. Not Apologizing When Needed
Apologizing when you’re wrong is an art. Most people (especially business leaders) think of it as a sign of weakness. But in reality, it takes guts to own up to your faults. And people appreciate your authenticity even more because of that.
For instance, last week the servers that host our CRM tool were down and caused inconvenience to our customers. We worked days and nights to get the issue sorted. On the second night of the problem, I messaged all our customers, apologizing unconditionally for the inconvenience and informed them that we were working flat out to resolve the problem.
Almost every customer sent a positive response to my message stating that our team had always been available on phone and that they trusted that we would do the right thing even now because we had always done so. We resolved the issue with churn of less than 2% of customers.
Takeaway: Your brand is not just what you say but also what you do. Be authentic in words and actions. Apologize when you’re wrong, inform customers about action steps, and a tentative time frame for the issue to get resolved. Your customers deserve that much for trusting you with their money and time.
A business doesn’t exist for market share or outsmarting the competition. It exists to satisfy a customer need. Revenue, market share and profitability are all byproducts of this singular goal.
Use customer feedback to make your business solid enough to be trusted by your customers. Place them at the center of everything you do and let them know it. This will make your business thrive while your competition struggles to survive.
Now won’t that be a good way to run your business?