How to Make the Most of Customer Feedback

For owners of traditional brick-and-mortar stores, customer feedback is often immediate and right to the point so that you can act on it. A customer may complain about pricing and after several missed sales, you may adjust prices. A customer may say you don't have a large enough selection and you may consider ordering more inventory. A customer may compliment you about the cleanliness of your store or helpfulness of your salespeople so that you know you are doing something right.

For the rest of small and mid-sized businesses, collecting that customer feedback can require more effort. From online and telephone surveys to written comment forms, from focus groups to customer roundtables, companies have employed a range of techniques to listen to their customers. But while customer feedback survey data does create competitive advantage, the advantage doesn't come from merely collecting the data, it's how you act on feedback that really makes the difference.

"Every day, companies solicit feedback from customers, yet only a few translate that feedback into meaning. An even smaller fraction of companies actually take action or close the loop with the customer, to let them know their voice was heard," says Whitney Wood, managing partner of the Phelon Group, a consultancy that focuses on helping companies better relations with customers. "If you handle it right, the dialog between you and your customers can become the lifeline of your business. To establish and maintain a healthy flow, customer feedback must result in change your customers can see. Change is the most powerful currency to reward vocal and consultative customers."

The following guide will cover why customer feedback is important, how to gather customer feedback, and what to do with that feedback.

Making the Most of Customer Feedback: Why Gather Customer Feedback

Before running out to set up a focus group or launch an online customer survey, you need to understand what your business goals are in gathering this data. Why are you gathering customer feedback? What will you do with it? Are you going to act on what you hear? When is the best time to approach your customers for feedback – when they buy, when they don't buy, when they're using your product or some other time?

One of the main goals of gathering customer feedback is to enable communications between you and your customer. As more businesses go online, there is less of the face-to-face communication you find in a physical store front. "If you have a real shop, you communicate with your customers. You understand what they like and dislike. They can ask and you can answer," says Ariel Finkelstein, co-founder and CEO of Kampyle, which makes tools for website feedback analytics. "In the online world, there's no communication and if you don't have that communication you don't understand why your customers are doing what they are doing."

Customer feedback can help you uncover flaws in your business, whether there's a technical problem with your website or whether your prices are too high. "Keep in mind that customers are not especially interested in anonymity, discounts, or monetary incentives to share their ideas with you," Wood says. "They want to be heard and respected and to have their guidance incorporated into your vision and strategic plan. The best-laid customer feedback programs and initiatives are intuitive, and are most effective when the entire company listens and responds to the voice of the customer."

Timing your approach to a customer for feedback can be tricky. If you bombard a customer with a survey as soon as they walk in the door -- or as soon as they click on your homepage -- they may be put off and leave. But there are less invasive times to approach a customer, perhaps after making a purchase you may follow-up with an e-mail asking for help in improving their shopping experience or by soliciting a quick poll while they are shopping online. "If you want to increase the number of customers who return, identify loyal customers and when they return, ask them why they did," Wood says. "Your organization must always be both listening to customers and observing their behavior so that you can make intelligent connections."

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Making the Most of Customer Feedback: How to Get Customer Feedback

There are a variety of ways to gather feedback from customers these days, but you can essentially group these methods into the following categories:

Empower customer-facing employees. The key to getting useful customer feedback is not to rely solely on phone, e-mail, and print surveys, but to create a culture in which your employees are always looking and listening, and, at the right time, are empowered to act, Wood says. "Employees are able to be much more valuable when armed with the knowledge and the support or resources to address customer concerns," she says. "And customers are more likely to give feedback to someone they believe is empowered to act." Appoint someone within your company to be the champion of customer feedback and have them consider both formal and informal methods of gathering information, and acting upon it.

Hire a third-party customer feedback provider. Outside consultants can deploy a variety of methods to gather unbiased customer feedback. It's not a bad idea to hire a consultant every few years to make sure you are hearing your customers. Consultants can set up focus groups, design customer surveys, and deploy other methods and then analyze the results to that your company can better meet its business goals. "Customer feedback studies can provide loads of data, but only some provide meaningful insight," Wood cautions. "The conductors of the study have useful information about the voice of the customer, and your time is best spent gathering that input rather than translating all the data together. Some questions you might want to ask: What words did our customers use to describe us? What is the profile of customers who will stay with us, and who is easily tempted by competitors? Which of our products do they love?"

Monitor customer behavior. In the online world, it's easy to see what your customers are doing and draw conclusions from their behavior. Using Google Analytics and other Web analytic tools, you can spot problems in the shopping experience. You may find that 90 percent of customers exit your website on a certain page and that should be a red flag for you to troubleshoot. You can also use these tools to understand shopping cart abandonment, whether customers are finding what they are looking for and other customer issues just by observing behavior.

Use customer feedback tools. That data you gather by observing customer behavior on your website can be enhanced through a variety of online tools to gather customer feedback. The tools range from feedback forms featuring happy faces and sad faces from Kampyle to instant polls and online surveys. The feedback forms can be strategically placed on different webpages so that the customer can show that they think a price is too high, for example. "The way you ask for feedback partners up with the vehicle you're using," says Eric Groves, senior vice president of global market development for Constant Contact, an e-mail marketing firm. "If there is a simple poll sitting there that your customer can choose to answer or not and also see how other people answered, it might be an appealing way to get their opinion about something." In addition to polls, companies can solicit feedback through e-mail newsletters or online surveys that are sent to customers via e-mail.

Another technique companies are finding helpful in hearing what their customers have to say is monitoring social media, such as Twitter and/or Facebook. Constant Contact has staff monitor Twitter for mentions of the company to spot potential trouble. Support staff will engage customers quickly if they learn of a problem and help the customer solve that problem, Groves says.

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