Customer Feedback: Definitions, Best Practices, And Uses

Customer feedback: where would companies be without it? Not only does it allow them to gain insight into the customer experience, but it also helps them make informed decisions about their products and services.

Understanding the definitions, best practices, and uses for customer feedback is crucial for any business that wants to create a positive customer experience. In this article, we'll explore all that and more. We'll also cover the importance of leveraging customer feedback to improve your business.

What Is Customer Feedback?

Customer feedback is the process of gathering information from customers about their experiences with a product or service. This can include both quantitative (survey data) and qualitative (interview data) methods.

Businesses use customer feedback to measure customer satisfaction and make informed decisions about their products and services.

Customer feedback is also used to identify areas of improvement, such as increasing the usability of a website or making process improvements in order to reduce wait times. Customer feedback can help businesses understand their customers better, improve products and services, and create a positive customer experience.

How can customer feedback be a competitive advantage?

In today's day and age, customer feedback is essential for any business looking to stay competitive. Here are a few ways customer feedback can help your business gain a competitive edge:

• It helps you form a deeper understanding of your customers
• It improves your ability to make customer-centric decisions
• It boosts cross-functional collaboration and breaks down silos
• It improves your product
• It helps you build customer loyalty and trust
• It helps to increase customer satisfaction and retention
• It can help you narrow down your ICP and attract the right customers

It helps you form a deeper understanding of your customers

Only one out of every 26 customers is likely to bring up their complaints, which is a terrifying stat for anyone in customer success and support. The other 25 customers will take their business elsewhere without ever telling you why, which is why it’s important to be proactive about soliciting customer feedback and implementing it. 

Customer feedback gives businesses a window into their customers' experiences. It can offer information on customer preferences, satisfaction levels, and overall perceptions of the brand. By gathering feedback from customers, businesses can form a deeper understanding of their target audience and what they need or want in order to keep them engaged.

It improves your ability to make customer-centric decisions

Customer-centricity is the practice of putting customers at the center of all business decisions, from product design and merchandizing to how customer service is handled. It's an important concept to keep in mind because it signals a shift away from businesses that treat their customers as numbers on a page instead of focusing on creating memorable experiences for them. 

With customer feedback, companies are able to gain insight into what their customers really think. This provides the data points needed to accurately gauge which decisions are customer-centric and which leave customers underwhelmed and make them more likely to conduct business with competitors. When customer feedback is used this way, it allows businesses to learn from their past mistakes while also finding ways to outpace the competition by offering fresh solutions that customer opinions have directly influenced.

It boosts cross-functional collaboration and breaks down silos

Customer feedback also creates a more collaborative environment across departments by breaking down silos.

For instance, customer feedback collected from call centers and surveys can be used to improve product design and business processes — all facilitated by cross-functional collaboration. This feedback should not just be ignored; instead, it should be discussed openly across different departments so that everyone is aware of the valuable information that customers are sharing.

Implementing customer feedback in product development will result in improved user satisfaction and loyalty for the organization's brand, helping them stand out in the long run.

It improves your product

As we've just mentioned in the point above this, customers often have invaluable insights into how well your product is doing its job and helping them achieve their desired outcomes. 

Customer support teams can gather this feedback, separate the signal from the noise, and then communicate this feedback to your product team. Your product team can, in turn, use it to improve your product or update your product roadmap if they can see a particular feature is being requested over and over again. 

It helps build customer loyalty and trust

According to a recent study, nearly two-thirds (64%) of consumers want brands to connect with them. By actively seeking out customer feedback and then responding to it in a timely manner, you demonstrate to your customers that they are important to you.

This, in turn, builds loyalty and trust between customers and the brand, which can lead to repeat purchases and overall brand advocacy. Furthermore, responding to customer complaints shows that you are listening to their feedback and are actively working to resolve the issue. This demonstrates that you prioritize customer experience, which is invaluable for long-term retention.

It helps to increase customer satisfaction and retention

Metrics like CSAT, CES, and NPS are some bedrock metrics when it comes to CX, and all are heavily dependent on gathering and analyzing customer feedback. The key is writing a survey that people will respond to, which we've written about extensively before in our CSAT and CES survey posts. 

It can help you narrow down your ICP and attract the right customers

If you see particular groups of customers using your product the right way, you can aim to target groups that match those characteristics. But how do you deduce which customers are the perfect match and which are a bad fit? By paying attention to their feedback.

For example, if a particular group of customers is always asking for a feature request that falls outside the purview of the problem you are trying to solve with your product, you can deduce that they are a bad fit as far as your ICP goes. In contrast to that, if you have a particular group of customers who are able to achieve their desired outcomes with your product and communicate that to you, then it's a good bet that a similar set of customers (maybe those in the same profession or industry, for example) are a great fit to target more broadly. 

How to collect customer feedback

Now that we've touched on the importance of customer feedback let's look at how to gather it. There are a few different methods you can use, but the most popular include:

Surveys

The most straightforward way to collect customer feedback is by sending out CSAT, NPS, or CES surveys and asking qualitative questions. Just beware that survey response rates may vary and are sometimes quite low depending on the channel you choose to send surveys out on.

Here are some response rate benchmarks:

• A response rate of 20 to 30% is average.
• A response rate of anything above 40% is excellent.
• A response rate of anything below 15% needs work. Ask yourself these questions

If your response rates are very low, ask yourself these questions: 

• Am I sending my surveys out on the appropriate channels?
• Is the length of my survey appropriate for the channel I am sending it on?
• Am I sending them at the right time? 

VoC programs

Voice of the Customer (VoC) programs are a structured approach for a company to collect, analyze, and change behavior from customer feedback that helps to create a customer-centric culture.

VoC programs utilize surveys and other types of customer insight-gathering processes with the aim of uncovering and understanding customers' wants and needs as well as bridging the gap between the actual experiences of customers and customer expectations.

This type of data-driven methodology can give teams the valuable insights needed to make well-informed decisions about their products and services. Gaining this understanding through VoC programs enable shorter product development cycles, better positioning in the market, as well as more accurate pricing models that can lead to higher customer satisfaction and even increase sales margins.

Examples & different kinds of customer feedback

Customer feedback is as varied as the people providing it, but it typically boils down to two main categories: 

Product feedback

This feedback relates to your product and features, including things like ease of use and onboarding.

Examples of product-related questions include: 

• On a scale of 1-10, how easy was it to use this feature? 
• How has your experience with our onboarding been? 
• Is our product easy to use?
• Is our product helping you reach your desired outcomes?

You can expect to read comments along the following lines: 

• This feature was easy to use.
• I found it difficult to use this feature. Here's why.
• Your onboarding flow is too long and confusing.
• Your onboarding flow helped me get set up quickly and easily.
• Your UI is confusing.
• I'm finding it hard to achieve my desired goals with your product. Here's why.
• Your product has really helped me achieve my desired outcomes.
• I wish this feature was available.
• I have a feature request for you.

Customer support feedback

This kind of feedback relates to experiences that users have with your customer support team.

Examples of customer support-related feedback questions include:

• On a scale of 1 to 10, how helpful was our customer support team? 
• How would you rate your experience with (insert customer support agent name) today?
• What can we do to improve your experience with our customer support?
• What did you like about your recent encounter with our support team?
• What did you dislike about your recent encounter with our support team?
• What does we have done to improve your experience today? 

Feedback will probably look something like this: 

• Your customer support team was excellent at helping me solve my problem today.
• You take too long to answer to support requests.
• I was not able to understand the instructions I received from the customer support representative.
• I appreciate how responsive and helpful your customer support team is.
• The customer support representative was rude/unprofessional.

How to evaluate customer feedback

If you're a company with many customers, it's natural that you'll receive a lot of customer feedback along the way. Some of it is useful, some of it isn't. But how do you tell which is which? 

When you're looking for a way to separate the signal (helpful feedback) from the noise (unhelpful feedback), it is good to a have solid methodology in place to ensure that you're only implementing feedback that is going to be beneficial to your business.

One of the best methodologies for this is Atlassian's RUF framework. RUF is an acronym and a way to categorize incoming support requests and customer feedback to quickly put it into three 'baskets'.

The 'R' stands for reliability issues, i.e., when a user reports that a feature is not working.

The U stands for usability issues, i.e., when a user reports that they're unsure how to use something.

The F stands for functionality issues, i.e., when a user has a feature request.

Since support teams are often the first point of contact when it comes to receiving customer feedback, this way of categorizing it prompts them to ask: Is something broken, is something confusing or is something missing?'

This, in turn, makes it easier for them to decide how to prioritize customer feedback and what to pass on to the product team.

From there, PMs (product managers) and support teams need to work together to make sure everyone is on the same page about long-term business and product strategy so only useful customer feedback is implemented.

If you'd like more tips about turning customer feedback into actionable insights, check out our PDF (free to download) about Voice of Customer programs and the right ways to collect and implement customer feedback.

Wrapping things up

At the end of the day, customer feedback is paramount when it comes to improving customer experiences and increasing customer satisfaction. By taking a proactive approach to collecting, understanding, and responding to customers' comments and reviews, you can build stronger relationships with your customers while improving the overall quality of your product or service.

This will not only lead to higher customer satisfaction scores but also increased loyalty and long-term retention. Thus, implementing a feedback loop that encourages customers to provide honest feedback is essential for any organization looking to succeed in the long run.