You’ve created an amazing product, offered best-in-class service, and done everything possible to satisfy your customers. But, how do you know if they’re satisfied? How do you ensure you’re giving them exactly what they need?
Collecting customer feedback helps you find out if your strategies are working or you need to make improvements. Let’s look at ten reasons why customer feedback is critical for your business.
People do thorough research before diving into any business aiming to identify a problem that your target customers “might” be facing. This provides you an opportunity and scope to develop a product that solves it. This gives businesses the confidence that since the problem is significant, people will buy your product to make their lives easier.
However, the results don’t sync up with the whole plan and idea.
It doesn’t matter how great your product or service is. If people outside your organization don’t want or like it, you won’t make sales. In fact, an estimated 42% of startups fail due to lack of demand. When you collect feedback, you get an outside-in perspective. It tells you what your target customers think of your product and how you can change it to cater to their needs.
2. Facilitates Action
No product is perfect, especially when it’s in the initial stages. It has to undergo a series of upgrades and improvements before it finally becomes something customers love. But how would you determine what changes you need to make in your product? By collecting regular customer feedback, you can identify negative experiences and turn them into positive ones.
3. Helps You Make Informed Decisions
As a new (or established) business, you need to have your priorities set. The market is more competitive than ever, and there’s no place for assumptions and loose guesses. You need to make educated decisions about where you want to take your business.
Here’s where the importance of feedback comes into the picture. You can use customer feedback as a beacon to guide your organization ahead. By knowing what your customers like and dislike about your product or service, you can shape your strategy moving forward and make informed business decisions.
4. Tells Your Customers that They Matter
Customers love attention. If you show them that they matter, they’re more likely to do business with you. Moreover, they know what they want, and in some cases, they know it better than you. The Institute of Management Sciences conducted a study, which showed that of 1,193 commercial innovations, 60% (737) came from customers.
Hence, there are two advantages of feedback.
- It puts your customers in the driving seat, making them feel recognized and important.
- It drives innovation as you get a clear insight into what your customers need.
5. Helps You Measure the Right KPIs
Has your business achieved excellence, or there’s some hard work you need to do? Your reports may show that you’ve completed your targets. But how would you know that you’ve designed best customer feedback form?
While sales and revenue are the key metrics that define business success, you can’t do business in the long run solely based on those numbers. Customer satisfaction is an essential KPI that you need to track. The benefits of customer satisfaction are many, with increased sales being one of them.
If you make customer satisfaction the key performance indicator (KPI) for your business, sales and revenue will come in automatically. Collecting customer feedback – both directly and indirectly – is the best way to measure customer feedback.
6. Makes Your Brand Trustworthy
81% of customers say they’ll only buy from a brand they trust. Trust is the most vital element in the customer-business relationship. However, not many brands realize the ease with which it can be broken or lost.
Numerous reasons can affect your relationship with customers. Privacy concerns, data breaches, and poor product quality are some of them. Another critical component that can make or break your relationship with customers is customer service. 90% of Americans consider customer service as a crucial factor in deciding whether to do business with a company.
Collecting customer feedback is one of the most effective ways to improve customer feedback analysis. When you know what your customers need, you can tailor your service accordingly.
7. Helps Identify At-Risk Customers
Zendesk found that 66% of customers have terminated their relationship with a brand due to poor customer service. Moreover, only 1 of 26 customers is likely to bring up their complaints. So, when a customer submits negative feedback, it’s a red flag for your brand and you should be know well to handle customer complaint.
But what’s more dangerous is a customer not leaving any feedback and silently moving away. When customers give you a negative response, they give you a chance to provide them with an improved experience. Therefore, you can pay extra attention to these customers to ensure that they continue to do business with you.
8. Determines Where Your Business Stands
No company is perfect. Every business has inefficiencies, and customers understand that. They know that a business is run by humans, who can make mistakes. They’ll give you a chance to improve and fix your errors, provided that you show promise.
Here’s a quick example of how Netflix issued an apology for the backlash they received over their decision to part ways with DVD and the consequential price changes. There are various other customer survey examples.
When you collect regular feedback, you can find out areas where you need to work on. Collecting and analyzing feedback can help you overcome business inefficiencies in the following ways:
- Improve processes
- Improve product and service quality
- Identify unhappy customers
- Reach customers before they churn
9. Increases Customer Loyalty
As discussed, poor customer service and experience can make customers leave. When you collect feedback and keep improving your product and service, your customers will stay loyal and do business with you in the long run. Therefore, customer loyalty is one of the many advantages of feedback.
10. Boosts Revenue and Profits
In the end, it’s about the bottom line. Collecting feedback from customers allows you to improve your product and service, which encourages customer loyalty. When customers stay loyal, they spend more money on your business. Research shows that a mere 5% increase in customer retention can boost profits by 25-95%. Hence, regular feedback collection can go a long way in growing revenue and profits.
Final Thoughts
With customer expectations and preferences constantly changing, it’s not possible to anticipate every time what your customers need. By collecting customer feedback, you can determine what you’re doing wrong and how you can fix it to provide the best possible experience to your customers.
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