7 Steps to a Closed-Loop Feedback Process

In the middle of the corona crisis, I received mail from my housing association. For a moment, I hoped for a gesture to me, as well as to all the other tenants who were suddenly without income due to the government lockdown measures. Postponement of rent payment? A temporary rent reduction?

When I opened the envelope and read the letter, I quickly had that illusion wiped away: while the world from a virus point of view was on fire, and many people were without work and income from one day to another, my housing association casually informed me about a new rent increase. As a customer, I felt unseen and misunderstood.

I shared my bewilderment about this on Twitter:

Who thinks that my #housing corporation is an unscrupulous money-grabber who has been collecting thousands of euros in rent for years without significant housing maintenance: this week they sent me a nice letter. Very thoughtful in times of crisis. It turned out to be the annual rent increase. #customerpain

One of my followers replied immediately saying other housing associations are committed to affected tenants. Curious, I asked for examples. He sent me a link to the website of a housing association that organised balcony concerts and a few other initiatives that while well-meaning did not help financially affected tenants at all. Shortly afterwards, he turned out to have removed his tweet.

Symptoms of Corporate Deafness

Here are some common symptoms of failing to listen to, or act on, customer feedback.

Misplaced Customer Experience “Improvements”

You see it more often: initiatives that are intended to improve the customer experience, but hardly matter from a customer perspective. They ignore improvements in the customer journey that really make the customer happy. Adding a handwritten card to an ordered product is nice (and at the same time no longer very original).

It is much more effective if the customer can easily find what he is looking for and can proceed to purchase, easily pay, and choose how and when the order will be delivered — just to name a few crucial touchpoints in the customer journey. To really improve the customer experience, it is best to focus on improvements in the customer journey that take away customer pain and make the lives of your customers easier and more carefree.

Locked In Customers

From the moment I received the letter about the rent increase, the higher rent was automatically debited every month. As a customer, I have no choice, and that makes it even more painful. Organizations with a stronger position over their customers than other organizations should be aware of customer experience and the frustrations resulting from negative customer experiences.

After all, a customer of a housing association cannot easily switch from one housing corporation to another, and even if he could, he would have to wait and see whether that housing corporation does have an eye for the customer. In those situations, the customer’s frustration could be much stronger than the dissatisfaction which a customer might have towards a company from which they can easily switch from one moment to the next.

Ignoring Social Media

Also painful is that my expression of customer pain on Twitter has probably escaped the housing association’s notice. In any case, there was no response to my tweet. For many organizations, social media remains the blind spot of customer feedback—a missed opportunity since this is precisely how customers are increasingly expressing their (dis)satisfaction.
Social media platforms are a gold mine for those who want to listen to what is happening with their customers and who want to use customer feedback as a basis for improvement.

No Action on Customer Feedback

You might think that this housing association does not conduct any research into the satisfaction of its tenants. Wrong. This summer, I received an email asking if I would like to participate in a customer satisfaction survey. You might think that this would be a great opportunity to express my dissatisfaction with the rent increase.

Well, not quite. A few years ago, I also received an invitation to participate in a customer satisfaction survey. I did. In my feedback, I indicated various points on which I, the customer, wished the corporation would improve. The house is dramatically badly insulated. There is a draft in the house. Many windows have single-layer glass, which means that heat is lost unnecessarily. In this time of growing climate awareness, this should prompt a housing association to take action. It didn’t.

Other comments, such as about the water jet of the shower not being powerful enough and the opening of the shower tap causing a heavy hum in the outdated boiler (or in the pipes, that is also possible, I am not an installer), remained unanswered. None of my improvement requests were honoured. In fact, there was no response at all. The housing corporation did not take any action and did not respond to my customer feedback—feedback that they had directly asked me for.

Customer Reactions

How do customers react? Exactly as you’d expect: ‘If you’re not listening to me, don’t ask me!’. I call it ‘corporate deafness,’ and its harmful consequences are severe:

• The customer’s pain remains unresolved and is even increased because feedback is not listened to;
• customer pain cannot be mitigated if an organization is unaware that the customer is experiencing pain;
• customer processes can’t be improved;

And as a result…

• the motivation of customers to respond to subsequent requests for feedback decreases;
• this may cause the organization to mistakenly believe that customers who remain silent are satisfied.

In addition to asking customers for feedback, it is just as important to do something with that customer feedback. Without blindly doing what a customer wants, you can listen to your customers, weigh customer feedback, and make targeted improvement choices. In addition, you can let your customers know that you have taken note of their feedback, thank them for it, let them know what you are going to do with it, and inform them later about choices made and next steps.

This is a process. That process has a name: closed-loop feedback. It helps you to improve the customer experience in a structured way and to keep your most important stakeholders, your customers, informed about this.

Closed-Loop Feedback Process

Next, I will take a closer look at how to make closed-loop feedback work in a ‘Voice of the Customer’ program for your organization. How you work according to a process that helps you use customer feedback in a structured way to improve the customer experience and your most important stakeholders — your customers! — and keep them informed about this.

Asking customers for feedback is one thing, doing something with it is another. Add a third element to this: giving feedback to your customer. There you have the holy trinity of closed-loop customer feedback. Asking for feedback does not mean that you simply do what the customer wants. Listening to customers is also about weighing customer feedback and making targeted choices on where to improve. In your feedback to the customer, you can substantiate your priorities, your choices, and your next steps.

Let’s take a look at the 7 steps in the closed-loop feedback process:

Step 1. Ask your customers for feedback

Depending on the variety of contact moments between your organization and its customers, there are different moments and methods to ask your customers for feedback. On a webpage, you might ask visitors if the information is relevant. In an email, you might invite readers to click a thumbs up or down. In a physical setting, you might place a terminal on-site and ask customers to share their experience with a certain aspect of your services by pressing a green, yellow, or red smiley. Whatever you do, the closed-loop feedback process starts with asking for feedback, and the channels through which this can be done are many. Preferably, choose feedback channels that, if successful, are sufficiently scalable to collect customer feedback and provide feedback to customers.

Step 2. Thank your customers for their feedback

Thank your customer for providing you with feedback. Preferably do this right when the customer provides feedback. And preferably personally. Even if you do not know the customer personally, you can thank the customer, for example, with a thank you message on the website or the feedback terminal. At all times, let your customers know that you appreciate their feedback. The customer will feel seen and heard.

Even if you think the customer is wrong, always keep in mind from the customer’s point of view the customer is always right. So, always acknowledge your customer’s pain – it’s their pain, not yours- and be grateful when a customer takes the time to let you know and by doing so, giving you the opportunity to find a solution.

Step 3. Follow up with customers immediately

As far as possible, follow up personally with customers who have provided feedback. Immediately contact customers who express serious dissatisfaction in their feedback or express some other form of ‘customer pain’. Make sure your customers feel heard and show them that you are going to act on their feedback. Offer to help solve your customers’ problems and ease their pain.

Give employees a mandate to correct errors immediately or, where necessary, to escalate issues to colleagues who can resolve them. Assign the customer contact to an employee who remains responsible for the case until it is handled to the customer’s satisfaction.

Define in advance when management receives an alert about customer feedback that leads to escalation and requires management follow-up.

General Electric (GE) discovered the value of complaining customers after the company analyzed the buying behavior of its customers. What GE saw was that customers who had once complained displayed much better-buying behavior than customers who had never complained. The customer satisfaction of complaining customers turned out to be higher, and they bought more. A complaint therefore not only offers you the opportunity to improve yourself but also, as a bonus, you will get a more loyal customer in return. On one condition: that you address the complaint satisfactorily.

Step 4. Analyze customer feedback

Listening to customers does not mean that you always do what the customer wants. The reason is simple. The customer is not in a position to oversee the impact of your choices. You are. If many customers ask in their feedback for more cash registers in your stores to be open, there may still be good reasons not to. Employees cost you a lot of money, and hiring even more employees can endanger your company’s survival. That is why it is important to look carefully at the underlying customer need.

A customer who asks for more cash registers to be opened has a customer pain that’s different from the customer’s need. The customer’s pain is not that there are insufficient cash registers open. He doesn’t bother, really. The customer’s pain is that he has to wait. His need is not that more cash registers have to be opened. The customer’s need is that he wants to leave faster. If you differentiate between customer feedback, customer pain, and customer need, you can better look for solutions that take away the customer pain without endangering the survival of your business. In the example of the retail chain, you can think of self-scanners or think about other ways to shorten the waiting time that the customer experiences. Translating customer insights into improvements requires analyzing customer feedback.

Step 5. Share customer feedback in the organisation

The most powerful way to drive change and improvement is to make sure the customer’s voice is heard throughout the organization. By all departments, all teams, and all employees. By projecting customer feedback into real-time dashboards, for example. And by discussing it regularly in multidisciplinary teams. Share customer insights with the right stakeholders within the organization and make clear agreements about who is going to do what and when feedback on this will take place.

To make customer feedback seen and heard throughout your organization, show it to everyone by sharing it in a shared mailbox, a dedicated WhatsApp group or Slack channel. Positive customer feedback will encourage everyone involved to continue what is good, negative feedback will help those who are involved to discuss and improve.

One of the most famous stories of sharing feedback in the organization is that of former Domino’s Pizza CEO Patrick Doyle, who transformed Domino’s from a company that was struggling for survival into the No. 1 pizza company in the world. After being appointed CEO in 2010, Doyle started listening to customers and sharing feedback from Domino’s customers with the organization. In a video for employees, Doyle shared customer feedback and admitted: “Domino’s crust tastes like cardboard”. He encouraged everyone at Domino’s Pizza to embrace customer feedback. Later, he said: “You can either use negative comments to get you down, or you can use them to excite you and energize your process to make a better pizza. We did the latter.”

Step 6. Make improvements

Use customer feedback and customer insights to make targeted improvements to specific touchpoints in specific customer journeys. Your customers will be happy to help you in creating competitive advantages when you invite them to participate in co-creation sessions and ask them to test new features before you add them.

The feedback Domino’s Pizza got from its customers made the company decide to change its pizza recipe. Domino’s also shifted to a single point-of-sale system that it owned and operated. The system enabled Domino’s to quickly add functionality, helping to drive digital orders — which are generally larger and easier to handle — to nearly two-thirds of all transactions. The CEO himself pushed for the mobile app and online orders to be as easy as possible. In 2013, the company launched Pizza Profiles, a feature that allowed consumers to save their favorite pizzas in an online profile. Using those profiles, the company worked to make ordering as easy as one click, and then even no clicks. It added ordering anywhere it could – Ford vehicles, the Apple Watch, TVs, Amazon’s Alexa app, Twitter, and Facebook, among others. Domino’s technological prowess and creativity turned it into a sales-generating machine. “We are the technology disruptors”, Patrick Doyle said. “We’re making every effort to keep every advantage we worked so hard to build.” With booming sales, the company convinced operators to remodel locations into a new Pizza Theater layout designed to encourage in-store order pickup. See How Patrick Doyle changed Domino’s, and the restaurant industry.

Step 7. Keep your customer informed

The last step in the closed-loop feedback process – the step that actually closes the loop – is probably the most overlooked one. The pinnacle of closed-loop feedback is when you keep your customers informed of the improvements your organization will be working on. Preferably customized: individual, personal, and related to the feedback of this specific customer. Depending on the industry you work in, the type of customer relationships, and the possibility to personalize feedback to customers: inform your customer by email, by telephone, in a personal conversation, or via social media.

And again, invite your customers to share their feedback with you. By doing so, you are back at Step 1.

Do You Have a Listening Mindset?

Successful use of customer feedback starts with an organization that really wants to know what its customers experience and what it can do to improve. This requires a listening mindset: the willingness, at all levels of the organization, to embrace customer feedback. Even if it might hurt a little. Based on the belief that customer feedback always makes the organization stronger. Once that conviction is in place, the basis is in place for implementing the 7 steps for closed-loop feedback.

Do you know of a good example of closed-loop customer feedback? I’m looking for examples in my new book KISSING A CACTUS. Please contact me at frans[at]reichardt.nl

Frans Reichardt | The Customer Listener

Published on CustomerThink on December 10, 2020