Why is feedback important to companies?

Getting people's opinions is essential for any business that wants not just to survive but to thrive in the increasingly competitive marketplace environment. Customer feedback holds precious data on actual customers' experiences, attitudes, and needs, which can serve as the foundation for making sound decisions. It's not so much about how good its service or product is that a business is good at, but whether it's paying attention and responding to what its customers are asking for — and then doing something about it. With constantly changing customers' needs and with options everywhere, effective use of feedback can be the most crucial factor to success in achieving loyalty, gaining satisfaction, driving innovation, and establishing a differentiated market space.

The Critical Role of Customer Feedback

Customer feedback offers a straightforward approach to knowing your people that no amounts of sales data and market research can offer. It reveals both the hard and the soft of the customer experience—what their delights are, what their annoyances are, and where they feel that their expectations have not been met. Without this open line of communication, businesses might make decisions based on inadequate information or even on personal judgment that is by no means an accurate reflection of their customers' point of view.

Feedback allows companies to:

Identify areas of strength to be utilized through advertising and customer interactions.
Identify areas of difficulty to be urgently addressed.
Identify not-yet-satisfied needs or emerging trends which can be utilized to develop new products.
Be sensitive to how the customers trade-off quality, service, and price in relation to each other.
Get competitive intelligence by being aware of why the customers are visiting the competition rather than them.

Because the feedback arrives in a stream, it is more like an interactive compass that guides product innovation, customer service strategy, and brand image. Listening actively and inquiring what the customers desire gives a sense of consideration and respect that permits stronger emotional connections to the brand. Customers who believe that their voice is heard become loyal, i.e., repeat business and word-of-mouth endorsements. This is the kind of loyalty that must be developed as it is generally several times more expensive to get a new customer than to keep one.

In order to take advantage of this, firms must:

Express gratitude towards feedback in the form of appreciation to the customers and demonstration of how their feedback is converted into tangible changes.
Address negative feedback via sympathy, immediacy, and willingness to change.
Demonstrate to the customers that they notice changes via feedback, making their feedback more valuable.
Utilize clear communication and promotion consonant with customers' expressed preference.

These are gestures that build trust and turn ordinary consumers into brand ambassadors who would freely advocate the cause of the company on social media platforms and online forums.

Feedback as a Catalyst for Change and Innovation

Feedback is not just correcting mistakes, but where one can innovate ahead of the pack. Customers will show unspoken desires or needs that have yet to be satisfied in the market. They provide hints about features, packaging, delivery, etc. By accepting feedback, companies can:

Launch more features to their product or launch complementary services that attract their customers.
Tailor offerings to the segments as revealed by analysis of customer comment.
Test marketing communications responding to pain or want expressed specifically by customers.
Adjust prices or promotion activity in response to perceived value.

Periodic combining of customer knowledge ensures that a company's products or offerings stay relevant and interesting in the face of increased change, minimizing the risk of obsolescence.

Highly successful companies do the following:

Deliver bespoke experiences to reflect an understanding of individual customer taste.
Act decisively on matters before they become complaints for all others.
Have open communication systems that generate continuous input.
Demonstrate publicly how customer input results in innovation and quality improvements.

Customer focus is a powerful differentiator if customers are deciding where to spend their dollars. It is self-reinforcing: the more customers are heard, the more they will refer the company, and the more it fuels net new customers and market share expansion.

Effective Strategies to Obtain Customer Feedback

In maximizing the value of customer feedback, the feedback-collecting process should be deliberate, and non-intrusive to customers. One of the best ways to collect feedback is by sending online surveys like those that ipsiloFORMS helps you create and analyse. With that said, there are some things you should kepp in mind:

Keep the surveys concise and to the point to respect customers' time.
Include open-ended questions that vary rich qualitative data along with quantitative scores.
Strategically time the request of feedback, say, on completion of a purchase, after contact with customer support, or during use.

By collecting data from multiple touchpoints like those mentioned above, businesses get a better understanding of their customers and avoid the pitfall of being locked-in with muddled or outdated data.

Heeding What Customers Are Saying: Turning Feedback into Real Impact

Receiving the feedback is just the start. The true power is in listening and responding effectively and genuinely as a business to what it is being told by customers. It is a matter of integrating an analysis of the feedback into important decision-making and building a responsive culture throughout the company.

The best way to apply these facts is:

Summarize feedback with the help of ipsiloFORMS to determine key themes and next actions.
Share concrete changes made directly due to customer feedback to further keep them in trust.
Reinforce ongoing conversation so the customer always feels engaged, not once requested.

When customers see a company listening to their needs and acting on them in tangible ways, they sense that it is genuinely customer-focused, and that generates smiles and loyalty.

Avoiding Traps in Utilizing Customer Feedback

Although constructive, complaints are generally not being maximally leveraged by companies because of the below-average bottlenecks:

Feedback overload: Too much data is difficult to make sense of without the right tools. This is why ipsiloFORMS gives you smart summaries that simplify the analysis.
Defensiveness to criticism: Defensive individuals respond poorly to constructive criticism, not as an opportunity for learning and improvement.
Spotty feedback mechanisms: Not asking regularly or inadequately for feedback decreases response rates and data quality.

Removing the aforementioned issues entails strategic investment in feedback management systems, cultural shift towards openness and ongoing improvement, and focus on transparency to consumers.

Strategic Business Growth Feedback Impact

Apart from operational benefits, customer feedback is a strategic resource whose impact on growth tendencies cannot be ignored:

Market differentiation: Customer-centricity positions a brand in a niche where shoppers need bespoke and distinct attention.
Lower churn: Solving problems brought up in feedback upfront keeps customers and reduces cost of acquisition.
Increased product-market fit: Feedback loops enable products to be made better suited to customers, driving revenue and market share.
Data-informed decision making: Insights from customers remove assumptions and provide more accuracy for marketing, development, and services investments.
Word-of-mouth advocacy: Happy and involved customers become loud advocates, driving reach and credibility naturally.

As competition becomes fiercer in all industries, having the capability to utilize feedback as a source of competitiveness is a primary source of competitiveness.

Leveraging a Culture of Feedback in Your Business

In order to have the full leverage of customer feedback and their wants on an ongoing basis, organizations need to:

Establish a regular agenda for hearing and collecting feedback from management and leadership.
Celebrate successes wherein customer feedback has created remarkable change.
Align the rewards and training programs of employees with customer-focused goals.
Invest in technology platforms to capture, analyze, and respond to feedback constructively, like ipsiloFORMS.
Be truthful and transparent with customers regarding the extent to which their feedback is contributing to informing the business direction.

These organizational priorities bring the feedback from a stand-alone process to a core business thinking process.

Closing Thoughts

With today's marketplace conditions of consumers armed with a myriad of choices and an unprecedented voice to be heard — and, better still, to hear what consumers want — option is no longer the choice for businesses looking to thrive. Feedback is a treasure trove of rich information that drives advancement, innovation, and long-term loyalty. Positioning it to strategic advantage and doing so on a regular basis places a company ahead of customer-priority non-competitors. Leveraging customer opinion at all levels, propelling change apparent to everyone, and igniting ongoing conversation forces companies not only to realize today's success, but to anticipate tomorrow in an ever-changing marketplace.