You must act on your customers’ feedback to provide a great customer experience. Acknowledging your customers’ feedback and providing updates proves that you value their input and are making a deliberate effort to improve their experience.

A closed-loop feedback system allows you to follow up with customers’ feedback to increase their satisfaction

What Is Closed-Loop Feedback?

Closed-loop feedback happens when you respond directly to customer feedback. You started the survey, the customer responded, and you closed the loop by replying to the customer, completing the circle.

Instead of simply gathering customer feedback, and using it to identify patterns and what to improve, closed-loop feedback allows you to act on feedback while informing customers about how and when you’re working on it.

Closed-loop feedback’s primary goal is to retain customers by increasing their satisfaction. It helps you shift the narrative from customers being dissatisfied with your brand to customers being satisfied and more likely to recommend you because you expressed that you care about them being more than a number.

Why Use Closed-Loop Feedback?

• Customer Retention

Customers are loyal until they are not, and a major reason for this is poor customer experience. According to a PWC study, 32% of customers would leave a company they love and are loyal to if they had a bad experience.

Customers churn for different reasons, some of which are beyond your control, but one of the factors you can influence is customer experience. Allowing customers to provide feedback and improving your product or service to meet their needs helps you build a stronger relationship with them, and that sentiment, combined with your commitment, is what will keep them coming back.

Collecting customer feedback without replying with a strategy for resolving their issues leaves them feeling like the feedback process is a waste of time. This discourages them from providing feedback and lowers their expectations of having their problems resolved.

Customers are more likely to switch brands if they don’t expect you to improve your services and products. Closed-loop feedback helps you avoid customers coming to a resolution conclusion.

Use This: Customer Retention Survey Template

• Stronger Customer Relationship

Every company tries to avoid customer tickets to provide a good experience, but tickets can be an opportunity to strengthen your relationships with your customers. Speaking directly to your customers allows you to identify and effectively eliminate their pain points.

Customers are more likely to stay with a brand they had a positive experience with while resolving their tickets.

• Positive Brand Reputation

Reviews can make or break your conversion; most customers will investigate how other customers feel about your brand before making a purchase decision.

If potential customers observe that the majority of your brand reviews are positive, it will likely be the final push for them to purchase your product or service. If it’s the other way around, regardless of your fair pricing and attractive offers, it raises a red flag that most people will not ignore.

• Increased Revenue

Closed-loop customer feedback improves the customer experience, increasing customer satisfaction and NPS score. This allows you to gain more customers, and boost profits without spending as much money on promotions.

You can also price your products higher because people are willing to pay more for a brand with a solid brand reputation.

Why Is Closing the Loop on Customer Feedback Important?

• Identifies the Root Cause of Feedback

Instead of simply asking customers their satisfaction level and likelihood to recommend you to others, closed loopback allows you to discover your customers’ pain points by adding open-ended questions to provide feedback.

This helps you figure out how effectively optimize your products or services and increase customer satisfaction.

• Customer Promotion

Efficient closed-loop feedback increases customer satisfaction and increases their likelihood of recommending you to their network. This increases your brand awareness, reputation, and recall.

If you have a good reputation, people are more likely to recall your brand when they think of related products or services. Good reviews lead to a positive reputation, and providing excellent customer service is an excellent way to get good reviews.

For You: 11 Customer Satisfaction Survey Template + [Question Examples]

• Improves Customer Feedback Rate 

Customers are more likely to give you feedback if you have a track record of using it. Closed-loop feedback informs and updates customers about how you’re using their feedback.

Closing the feedback loop raises customers’ expectations that you will resolve their issues and work with their feedback. They will be more willing to give you constructive feedback if they know you will use it.

• Better Employee Experience

When customer service representatives directly resolve customer tickets and keep them updated on their status, they are more likely to improve their skills in handling support issues. This allows them to advance in their positions while also improving customer satisfaction.

It also helps you develop a playbook for how customers should handle customer inquiries and ways to improve the existing guidelines.

Who Benefits From Closed-Loop Customer Feedback?

• Customers

Effective closed-loop feedback makes customers feel heard, and seen while also improving their experience. This increases their likelihood of sticking with your brand long-term and developing an emotional attachment to it.

• Companies

Using customer feedback allows you to make effective project optimization decisions while keeping our customers informed. This increases your customer satisfaction, loyalty, and retention.

Closed-loop feedback also helps you avoid negative reviews and maintain a positive brand reputation.

• Customer Service Agents

Closed-loop feedback enables service agents to understand customer expectations and discover ways to improve their customer service skills.

• Shareholders

Customer churn is reduced while retention, loyalty, and sales profit are increased with closed-loop feedback. This increases the profitability of shareholders’ equities and motivates shareholders to keep entrusting you with their money.

What Defines a Good Closed Loop Process?

• Set Targets

Clearly state your objectives for the closed-loop feedback system- list your goals and metrics for success. This will provide you with a clear path for your action plan, help you understand your performance, and provide you with insight into what to eliminate.

• Measure Your Performance

Keep track of your feedback system. Evaluate if it’s improving or deteriorating; this will enable you to figure out how to make the feedback process more user-friendly for customers.

• Embrace Agility

How quickly you respond to customers or take action to resolve issues is critical in closed-loop feedback. Responding to customers too late is ineffective or, worse, sets you up for negative reviews.

A quick loop-closing process impresses customers and demonstrates your concern. Create an automatic feedback system that notifies you of customer feedback immediately.

• Solve Structural Issues

Reduced ticket resolution time is great, but removing customers’ pain points so they don’t need to raise tickets is even better. It increases their satisfaction with your company and saves them from having to repeat their requests.

How to Build a Closed-Loop System

• Collect feedback– collect customer feedback through surveys, reviews, social media, and customer service interactions. Ensure that the feedback collection captures all of your user personas so that you can develop solutions that meet the needs of your customers.
• Analyze Feedback– analyze feedback to identify trends, common issues, and opportunities for improvement. You can use feedback analysis tools to automate this process.
• Develop and Implement Solutions– Use the feedback analysis to develop solutions to the identified problems. This could include updating your website, introducing new products, or training employees on new processes.
• Close the loop– Close the feedback loop by notifying customers about the changes you’ve implemented and how their feedback influenced those changes.

Closed-Loop Feedback Best Practices

• Respond Promptly

When customers provide feedback, respond quickly to let them know you have received it and are taking action. Not knowing when they will get responses, frustrates most customers, and it’s a good motivator for bad reviews.

Also, be transparent about your feedback window,  give them a feedback window to ease the tension. For example, your feedback window could be 24 hours after the query; this will reassure customers that their concerns will be addressed within 24 hours.

• Regular Feedback Analysis

Regularly analyze feedback to identify trends, common issues, and opportunities for improvement. This will allow you to track your progress and determine whether your improvements are meeting your objectives.

• Updates Notifiication

When you’ve made changes based on customer feedback, notify them of the changes and how their feedback contributed to those changes. This shows that you value their feedback and are dedicated to improving their experience.

How Setup a Closed-Loop Feedback With Formplus

• Create or customize a customer feedback form to collect customers’ opinions, inquiries, and suggestions.
• Set up notifications to notify you of submissions, and autoresponder to give customers an immediate response.
• Use the responses and analytics dashboard to monitor feedback, identify patterns, and make effective product optimization
• Next, connect Formplus to your customer experience tool using the Zapier integration.
• After making improvements, follow up with customers to let them know that their feedback was heard and that you have taken action to address their concerns. This helps to build trust and loyalty with customers.

Conclusion

Closed-loop feedback enables you to convert your data and insights into sales and reduce churn. It’s a method of turning customer dissatisfaction into an opportunity to build loyalty and trust.

With Formplus, you can easily collect customer feedback and use it to improve your product optimization efforts. You can also integrate it with your customer experience tools like Salesforce, Marketo, and more.