Leveraging Customer Feedback for Business Success
Feedback is a process improvement system that is commonly used in the world across different organizations and institutions. According to Oxford Languages, feedback is “information about the reaction to a product or a person's task performance, which is then used as a basis for improvement. One could argue that feedback is synonymous with performance improvement.
The Cambridge Dictionary defines feedback as "information or statements of opinion about something, such as a new product, that can tell you if it is successful or liked".
From the above definition, the primary goal of having a feedback system is collecting information. There are various reasons for collecting data, but there is a consensus on collecting information to make improvements.
For example, if you just launched a new wristwatch, how do you know if customers like it? How would you be able to tell that they don’t like it? You would have to ask the end users of the wristwatch for their opinion.
Businesses worldwide must ensure that they are meeting the needs and wants of their customers in every aspect of their business, from producing goods and services to delivering them.
Here’s how you can leverage customer feedback for business success in 2024:
Identify Opportunities
Increase Customer Satisfaction
Increase Sales
Identify Opportunities:
Feedback helps companies identify new business opportunities as they learn more about their customer's perceived values. In other words, feedback bridges the gap between what you think customers want and what they actually want. According to Gartner statistics, 95% of companies collect customer feedback.
It's essential to understand the difference between value and perceived value. Value means the benefit that customers get from a product or service. On the other hand, perceived value is the benefits customers think they will get from consuming a product or service.
For example, UBER has a tremendous two-way feedback system. Drivers can rate riders and vice versa. When a rider books a ride on the UBER platform, it is tempting to assume that the value is merely transporting a person from point A to point B, but that’s not the case. Riders want to feel safe and comfortable during trips and to be treated with respect, the car needs to be clean and in perfect condition, and drivers need to take precautions and follow traffic laws. Collecting all this information helps UBER identify gaps and opportunities within its business and improve the experience for drivers and riders, which helps improve driver retention numbers.
After receiving customer feedback, some companies have gone as far as creating entirely new categories of complementary products and ad-ons, opening up a whole new opportunity for incremental sales.
The secret to succeeding with feedback is using it to improve processes and customer experience. Only 10% of companies use feedback to make changes and improve processes.
Increase Customer Satisfaction
With information on perceived value at the fingertips of entrepreneurs and business owners, making changes directly in response to customers' perceived value will translate into customer satisfaction.
One-time transaction models are only sustainable for some businesses, even if you are selling high-ticket items. Businesses need repeat purchases to survive, and one of the ways to achieve this is by ensuring that users of a product/service are happy.
Going back to the UBER example, if riders continue to abuse drivers and vice versa, and nothing is done to change the trend, two things will happen:
Riders will become dissatisfied and leave the app
Drivers will become dissatisfied and leave the app
65% of consumers switch to a different brand because of poor service. UBER can identify these gaps and opportunities and take action to avoid losing its users. Such actions could include suspending offending drivers and riders up to deactivations.
The bottom line is that a satisfied customer will always come back to you either for repeat purchases or try a different offering.
Increase Sales
As customers become increasingly satisfied with your products and services, they will be more likely to spread the word among friends, family, and peers - that is what is generally known as word-of-mouth marketing (WOMM).
Word of mouth is the most effective form of marketing that has stood the test of time. Trust and relationships are of utmost importance in the business world. People will only do business with people who they know and trust.
90% of people will trust a business, product, or service if someone recommends it. The great thing about WOMM is that it costs almost nothing due to the organic nature of human interactions and connections. News spreads fast with social media platforms like TikTok, Facebook, Twitter, and LinkedIn.
Sales is a numbers game. At the same time, entrepreneurs and small business owners must build and nurture relationships for recruitment. It’s one thing for owners and creators to speak about their products and services. It’s a whole different thing if someone other than yourself speaks about your product. Hence most businesses turn to influencers and celebrities with massive followings to promote their brands.
If all else is equal, an increase in customer count will automatically cause an increase in revenue, which also increases profits if costs remain constant.
Are you ready to leverage customer feedback for success? How else can customer feedback impact your business?
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