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3 Ways Customer Feedback Will Save Your Business

Companies should know that while pricing on products and services is a great differentiator, customer service experience is a greater predictor of how customers decide which company they will do with business with.

Customer experience, perhaps best defined at the practice of creating, responding to, and improving customer interactions, is vitally important today. Customers are smarter than ever, with even greater ability to choose which businesses they will cater to. And, thanks to social media and online reviews, they know which businesses respect customers and which don’t. They realize that some businesses see the customer experience as beginning and ending with the transaction while other businesses continue to develop the experience long after a transaction has occurred. Of course, those who fall into the latter category are more likely to see customers come back and let others know about how great a company is. Those who seem to ignore customer needs are, in turn, ignored.

A lot of companies are nervous and scared because the customer has a voice that they never had before. It’s louder. It can be broadcast to a much larger group of people. With social media, it’s amplified,” notes Shep Hyken, best-selling author of numerous customer service books.

The Value of Customer Feedback

Focusing on the customer experience can help a business alleviate the possibility of developing a bad reputation. Customers are, after all, a business’s most valuable stakeholders and the stronger relationship a business has with them, the more successful it will be. Providing customer feedback opportunities is, perhaps, the most effective way to ensure a positive customer experience. On the flip side, not collecting feedback will only cost a business in the end.  Here a few examples of how.

You will spend more to acquire new customers

It’s no secret that it is less expensive to retain an existing customer than to acquire a new one. While experts cannot agree on just how much it costs to acquire a new customer, they generally estimate that the acquisition cost is 5% - 10% more than the cost of retaining an existing customer. Measuring customer happiness is one way to reduce these costs. Simple, personalized surveys can garner response rates upwards of 60% and, if tracked over time, help a business see where satisfaction has improved or declined so to make necessary adjustments which will keep customers satisfied. 

You will not sell as much

According to an Institute of Customer Service survey of 26,000 consumers, there is a clear link between customer satisfaction and business performance. For example, Amazon, widely known for providing customers will numerous feedback opportunities, received the highest customer satisfaction levels while, at the same time, achieving the greatest sales growth. Companies now realize that a better customer experience will improve customer satisfaction and has a snowball effect, improving customer retention, developing brand loyalty, and creating brand advocates. Businesses which invest more in customer experience, actively soliciting customer feedback, better understand their customers’ needs and concerns. Feedback enables them to exceed customer expectations, develop loyalty, and generate referrals.

You will incur the cost of negative online reviews

The authors of a 2015 study surveyed 1,000 respondents to find out how many negative reviews they needed to see before they decided to move on to a different company or product. A majority said they looked no further than the first page, and many – about 60% - admitted to making buying decisions based solely on 3 reviews. 22% reported that just one negative review was enough to make them move on. When a company develops a reputation for providing poor customer service, employing unhappy employees, or selling lackluster products, business is more difficult to conduct, increasing the cost of day-to-day operations. Providing customers with an outlet to voice their complaints will not help only mitigate the chances of them publicly voicing their complaints but provide opportunities for immediate response, converting detractors into brand advocates. 

In the end, a business’s success or failure will depend on its willingness to ask for and act on customer feedback, an essential piece of the customer experience. Customer experience is just as important as product and that’s why constantly improving it can be a determining factor of your business success. Offering customers an excellent experience must be the aim of every business as it is what will bring them back and spread positive word of mouth. Asking customers what they want and offering a personalized experience is the only way to stand out from the competition.

 

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