No aspect of business can survive without honest, constructive feedback – whether you work in product development, marketing, finance, or sales.
However, what sets customer success teams apart from other departments in an organization is the unique position CS finds itself in: we’re at the frontline when it comes to understanding customer behavior, feedback, wants, and needs.
Our role encompasses various factors that enable our organizations to have an in-depth insight into customer expectations, making our wider business as a whole more informed about customers' viewpoints than any other team.
I’ve found a helpful analogy to best appreciate customer feedback's relevance to a wider business.
Consider customer feedback as a battery that powers companies. It has both positive and negative sides. Where positive feedback indicates customer satisfaction, negative feedback signals can highlight areas for improvement. But just like a battery, we need both sides for the feedback to work.
We need to make sure we’re proactive and conscious of both sides of feedback, bad or good, in order to give our organizations the best shot at success.
In this article, I’m going to delve into:
- The critical function of customer feedback,
- The key components of the voice of the customer,
- The role of surveys in the voice of the customer, and
- The similarities and differences between NPS and CSAT metrics.
But before we dig in, let’s establish one thing first: how customer feedback, when wielded well, can empower your company.
Grace Gupta
Why is customer feedback so important?
To break down this commonly understood term, “customer feedback” represents the collective sentiment of how customers feel about your service or product function.
It’s a well-known fact that most customers tend to only engage in feedback when it’s a complaint, rather than praise of a product. Unfortunately, such is life. In reality, you’d be surprised by how little feedback companies get.
In Michael LeBoeuf’s 1988 book, How to Win Customers and Keep Them for Life, he reveals that only 4% of dissatisfied customers raise a complaint. The other 96%? I’m afraid to say they silently go off into the night, leaving you – the Customer Success Manager (CSM) – entirely none the wiser. In order to prevent 96% of your customer base from jumping ship without so much as an “I’m-dissatisfied-about-this-because”, it's crucial your customer success team seeks out this feedback proactively.
Why? Because about 93% of these complainants will do business with you again if the issue is resolved.
Whether they have a dedicated CSM or not, the question remains: are your customers reaching their goals with your product or service? Would they recommend it to others?
A study by SuccessHacker shows that 59% of companies believe that their Voice of Customer (VoC) strategy will reduce customer churn. Clearly, the emphasis shouldn’t be on solely collecting feedback directly from the customer, but, in fact, how you understand and act upon it.
A VoC framework provides structure to this process of learning from customers. Let’s go into that in more detail.
The key components of a voice of the customer strategy
- Data collection: Gathering feedback from various sources.
- Data analysis: Understanding your ideal customer and their common use cases, and prioritizing the feedback.
- Taking action: Implementing changes based on feedback.
- Transparency and feedback loop: Being open about the actions taken and getting back to the users who provided feedback.
Data collection
Before you start your VoC program, your first port of call is to gather feedback from as many sources as possible. This could include customer surveys, interviews, focus groups, social media comments, customer support tickets, and user activity data. Effective data collection methods ensure you are hearing from a representative sample of your customer base.
Ideally, your data collection methods should also allow for open-ended feedback, which can reveal issues or opportunities you might not have been aware of. Additionally, data collection should be an ongoing process, not a one-off event, as customers' needs and perceptions can change over time.
Data analysis
Once the data is collected, the next step is to analyze it to extract meaningful insights. This could involve identifying common themes or trends, segmenting feedback by customer type or use case, and scoring feedback based on its potential impact on customer satisfaction or business results.
At this stage, it's important to understand not just what customers are saying, but also what they're not saying. For instance, if customers are repeatedly requesting a certain feature, it might indicate a gap in your current offerings. Conversely, if customers rarely mention a certain feature, it could suggest that it's not adding much value.
Josh Horsman
Taking action
After analyzing the data, the next step is to take action based on the insights gained. This might involve making changes to your product or service, adjusting your customer support processes, improving your communication, or even rethinking your overall business strategy.
The key here is to be strategic and prioritize changes that are likely to have the most significant impact on customer satisfaction and business results. You also need to ensure that any changes are implemented effectively and that the impact is tracked over time.
Prioritizing changes based on feedback
When you're faced with a significant amount of feedback, it can feel overwhelming to decide what to prioritize. Here are a few strategies:
- The severity of the issue: Identify feedback that indicates a severe problem with your product or service. If many customers face the same issue, that's a clear sign it needs immediate attention.
- Potential impact: Some changes might take a long time or require many resources but have a significant impact on customer satisfaction. These changes should also be high on your priority list.
- Alignment with company vision: Finally, prioritize feedback that aligns with your company's long-term goals and vision. These are changes that not only make your current customers happy but also guide your product or service toward future success. Keep in mind that customers give feedback based on their needs and experiences without taking on your company's goal.
Transparency and feedback loop
The final component of a VoC strategy is to be transparent with customers about the actions you've taken based on their feedback. This can help build trust and show customers that you value their input. It could involve sharing updates through email newsletters, blog posts, social media, or even direct communication with customers who provided key feedback.
Additionally, maintaining a feedback loop is essential – not just telling customers what changes you've made, but also asking for their thoughts on those changes. This helps to ensure that your actions are actually addressing customers' needs and concerns, and it also keeps the conversation going, leading to more feedback and insights.
By following this framework, companies can get early indications of risk, capture valuable product feedback, gain a deeper understanding of their customer's needs, and clearly articulate the value of their services.
Then, a VoC program can foster a customer-centric culture within the organization, as it encourages everyone in the company to listen to, understand, and respond to customer feedback. This, in turn, can lead to higher customer satisfaction, increased loyalty, and better business outcomes.
How you can best utilize surveys when obtaining customer feedback
It’s all well and good to say, “Let’s collect customer feedback.” But how are you actually going to do that? Surveys provide a structured and measurable way of collecting customer feedback, offering quantitative data that can be easily analyzed and benchmarked over time or compared across different customer segments.
Surveys like net promoter score (NPS) and customer satisfaction score (CSAT) are some of the most common tools to collect customer sentiment.
They enable you to:
- Understand specific insights into the customer experience, like product features, pricing, etc.
- Reach a wide range of your customer base, not just the ones who proactively reach out to you.
- Enable you to standardize your collection so every question is asked in the same way, allowing you to accurately compare and collate your data.
Implementing these requires a clear objective, identified audience, and appropriate timing. Additionally, the questions should be clear and concise, and allow for follow-up discussions.
How to design effective survey questions
When designing effective survey questions, consider the following tips:
Be clear and concise
Keep your questions simple and direct and avoid using technical terms that respondents might not understand. Most people have a limited attention span, meaning overly-wordy questions will likely lose your respondent’s concentration. Keep things short and sweet!
Be specific
Following on from clarity, you must also make sure your questions are specific and related to the topic at hand. Don’t try to put all of your eggs (read: topics) in one basket (question). Make sure every question is razor-sharp and related to only one topic. This way, you won’t confuse your respondents and they’ll produce the best answers.
Use a mix of closed and open-ended questions
Variety is well and truly the spice of life. Using closed-ended questions allows for easy analysis, e.g. “On a scale of 1–10, ‘How satisfied are you with our product?’”
On the other hand, open-ended questions give customers the chance to express their thoughts freely, often providing invaluable insights, e.g. “What features do you think our product is missing?”
Walk the fine balance between qualitative and quantitative data
While designing your survey, it's essential to have a good mix of both quantitative and qualitative questions.
Quantitative questions, often closed-ended, will provide hard numbers that can be useful in statistical analysis and be used to compare your new results vs. the historical ones.
Qualitative questions, usually open-ended, will give you more detailed responses. They can offer a deeper understanding and richer insights into how customers perceive your products or services.
NPS and CSAT: What’s the difference?
While NPS measures customer loyalty towards the brand or product, CSAT measures customers’ satisfaction at specific touchpoints.
For example, you might ask a customer, "On a scale of 0-10, how likely are you to recommend our software to a colleague?" for NPS, and, "On a scale of 1-5, how satisfied are you with our new feature?" for CSAT.
Depending on the scores obtained, customers can be segmented into “promoters,” “passives,” and “detractors” for NPS. For CSAT, your categories are “high,” “neutral,” and “low.” This segmentation helps you understand who to focus on and how to approach them for improvements.
The implications of NPS and CSAT scores
You’ll find a good NPS score to be anything above 0. A great one, above 20. Anything above 50 is amazing. However, the goal should be continuous improvement based on feedback.
CSAT scores, on the other hand, need to be evaluated against the organization’s goal. A high score (4-5) indicates high customer satisfaction, while a neutral score (3) signals indifference. A low score (1-2) is a warning sign that requires immediate improvements.
Sandeep Singh Bhara
How can surveys drive revenue through actionable insights?
Understanding and properly interpreting NPS and CSAT scores can truly empower CSMs to drive revenue, and save or expand accounts.
This happens in two major ways:
- Retention and account recovery
- Expansion and upselling opportunities
1. Retention and account recovery
Firstly, NPS and CSAT scores can act as an early warning system. Detractors or those expressing dissatisfaction (low CSAT scores) indicate accounts that may be at risk. CSMs can leverage this information to engage these accounts proactively.
This might involve getting to the root of their dissatisfaction, resolving any issues they're experiencing, and taking steps to improve their overall experience. At the end, being proactive is the best strategy against churn.
2. Expansion and upselling opportunities
On the other hand, promoters and those with high scores are your satisfied, loyal customers. These customers are more likely to be open to exploring additional products or services.
Identifying these customers gives CSMs the opportunity to introduce them to upsells or cross-sells, effectively driving revenue growth. Also, these customers are more likely to advocate for your company, potentially leading to referral opportunities.
The importance of scaling customer feedback
As your business expands, managing growing volumes of customer feedback can be challenging. Here's how you can scale your customer feedback processes:
- Automation: Utilize technology to automate survey distribution, reminders, data collection, and analysis.
- Categorization: Group similar feedback together to identify common themes and prioritize responses.
- Regular reporting: Implement a routine of sharing feedback insights across your organization.
- Cross-department collaboration: Share feedback and collaborate on responses across all relevant departments.
- Training: Regularly educate your team about the importance of customer feedback and how to handle it effectively.
- Iterative processes: Continually review and refine your feedback processes to align with your growing business.
Parting words
The following phase by Stephanie Berner, Global Head of Customer Success at LinkedIn Sales Solutions impacted my career a lot:
“Clues lead to patterns, patterns lead to insights, and insights lead to actions.”
Listening to your customers and acting on their feedback is not just a choice. It's now a necessity for customer success.
