How to Improve CX with Closed Loop Feedback? (2024)

Closed Loop Feedback

You thought collecting the customer feedback data and conducting extensive analysis is the end of the job?

Too soon. That’s just one part of the process.

The other part is providing acknowledgment or updates to the respondents or customers — something that only adds to the excellent customer experience you offer.

Creating an effective and organized closed-loop feedback system is a necessity you just can’t afford to ignore.

After all, it helps brands get to terms with the target audience’s expectations and make customers feel cared for.

In this extensive guide, we will help you understand the ins and outs of a closed-loop feedback system and how you can leverage it for competitive advantage.

Let’s get started!

Table of contents
What is closed-loop feedback?
Importance of closing the loop on customer feedback
How to build a closed-loop system?
What a good closed customer feedback loop looks like?
Best practices for closed-loop feedback

What is closed-loop feedback?

Almost every company surveys its customers by sharing questions or queries targeting their recent interactions.

The surveys help companies understand the efficiency of the interaction and whether or not customers achieved their objectives.

However, once the survey results are collected, it is the responsibility of the brand to respond to the customers’ survey feedback.

The process allows them to understand the feedback in an in-depth manner, figure out the issues customers faced, come up with viable solutions, and let the respondents know that their feedback has been collected and used to improve customer experience.

A closed-loop feedback system is the core of every customer experience management strategy and is critical to ensuring proper action to boost customer satisfaction and reduce churn rate.

customer feedback, closed loop system, customer journey

Importance of closing the loop on customer feedback

Why is closing the loop on customer feedback critical to business success? Well, companies that fail to close the loop on feedback generally experience a churn of 2.1 percent every year.

What about the companies that do close the loop? Such companies have reported a decrease in churn rate by a minimum of 2.3 percent!

Let’s discuss the several ways closing the loop on customer feedback can help your business in 2024.

1. Improves customer satisfaction and CX.

Closing the loop gives companies the opportunity to show customers that they care about customer satisfaction.

Remember, customer loyalty is directly proportional to the quality of your customer experience strategy.

The easier customers find it to interact or do business with your company, the more they will be loyal.

While customer feedback helps identify the issues in your business processes, it’s your responsibility to acknowledge the time and effort customers put into writing the feedback.

When you close the loop, it shows that you acknowledge the feedback and care about what customers have to say.

2. Helps determine root causes.

In our earlier posts, we discussed the strategies companies can implement to improve their NPS scores and build better CX systems.

But, no matter how great your NPS scores are or how many questions you ask, it is quite unlikely to figure out the real issues in your business operations.

When you close the loop, you give your CX team the opportunity to dive deeper and identify the root causes of the issues.

In other words, closing the loop is an effective way to reveal additional information about the recent business-customer interaction.

3. Improves survey response rates.

Modern-day customers are brilliant at discovering patterns in how businesses function.

When companies execute closed-loop feedback systems and respond to customers’ feedback, the customers realize that the company considers their feedback.

How can you show that you will act on the feedback? Close the feedback loop, simple! When you do that, customers will know that you respond to their feedback.

Seeing the pattern, they will be more than willing to share feedback next time you share the survey. This way, you will be able to generate more revenue for your business!

4. Makes the most of promoters.

Promoters are customers that score you high on NPS surveys. When you already know the NPS score promoters leave, you can strategize to capitalize on their satisfaction with your services. How are you going to do that?

Well, while promoters will always return and do more business with you, you should use the closed-loop feedback system to make them leave positive reviews and testimonials or refer your company to new customers.

In other words, you can use the closed-loop feedback system to boost your brand reputation on social media and search engines. You can also bring the promoters on board for case studies or collect their input for product development.

5. Reduces customer churn.

An open-loop feedback system will only push your customers away.

In other words, if you ignore the feedback or do not acknowledge or resolve it, chances are customers will feel that you wasted their time by making them respond.

A closed-loop feedback system ensures that the feedback does not fall through the cracks. Hence, it helps resolve issues at the source and reduce customer churn.

6. Boosts company revenue.

A closed-loop feedback system makes it easier for businesses to resolve issues in customer experience, especially if the issues are present at different levels of the buyer journey.

Your business will thrive if your customers are happy. And customers will stay happy if you hear what they have to say.

If you don’t, customers will leave negative reviews on public portals.

We shouldn’t have to tell you the significance of word-of-mouth. It’s very powerful and can make or break your company’s revenue projections.

feedback system, negative feedback, positive feedback

How to build a closed-loop system?

Now that you are well-acquainted with how a closed-loop feedback system functions, it’s time we discuss how to build one ourselves!

So, how can you use closed-loop feedback to stay connected with the customers? You just can’t stop the process at data collection.

You will have to report back to the respondents while you sort and analyze the data.

Moreover, companies will have to figure out which respondents made the most mark on the improvements brought in their products and services.

Let’s understand how to build a closed-loop feedback program that helps with business growth.

1. Make decisions based on the feedback received.

What’s the first step in a closed-loop feedback process? It’s quite obvious — collecting the feedback!

But more than that, it is collecting the feedback in a way that helps generate accurate data. After all, accuracy will help companies understand their customers’ expectations better.

Some of the most used feedback collection survey types are Net Promoter Score surveys, Customer Satisfaction surveys, and Customer Effort Score surveys. You may also use other types of surveys that involve thumbs up and down, smiley faces & more.

But, that’s just one part of the process. You will also have to figure out ways you can send or distribute surveys to the customers. We suggest you choose from email, website, in-app, special links, and QR code surveys.

Once you determine the above two and choose the right performance metric, it will be easier to manage real-time customer feedback.

2. Ensure you prioritize the detractors.

The next step in the process of closing the loop is putting attention on detractors. In our previous articles, we discussed how NPS survey respondents can be distributed into promoters, passives, and detractors.

Detractors are the customers that are least likely to recommend your brand to their family and friends. These are the customers that are most likely to spread negative information about your brand everywhere.

This can impact your market reputation. Once you figure out the detractors, it’s important you reach out to them in a more personalized way.

Set up special “Thank You” pages that help mitigate the situation with the detractors, i.e., for customers that respond with the least score. Make them feel cared for!

3. Don’t forget to engage with promoters.

Once you put the fear of a negative reputation away, you can focus on promoters. Who are promoters? These are customers that are extremely satisfied with your products and services.

Promoters are essentially customers that are cheerleaders for your company and are willing to share positive feedback with their family and friends.

Therefore, it is important that you engage with the promoters and encourage them to spread positive information about your brand or act like brand ambassadors.

You can ask the promoters to write a testimonial or review for your brand.

Did you know that almost 92 percent of consumers consider online reviews and testimonials while making an informed purchasing decision?

Remember, closing the loop with the happiest customers is extremely important for your CX program’s success. Make them feel valuable!

4. Follow up with passives.

What about the passives? How should you treat them while closing the feedback loop?

Passives are essentially customers that are neither happy nor dissatisfied with the customer experience your company had to offer.

These customers often lead with a neutral assessment. Does a neutral assessment hurt your company’s reputation? Well, they don’t unless you are willing to address the passives!

Passives are not impressed with your services and products. But they are not unhappy either. Therefore, engaging them with another interaction can potentially push them towards being a promoter.

After all, closing the loop will help companies build trust. Your customer experience strategy should focus on turning more and more passives into promoters!

customer data, closed loop systems, customer feedback

What a good closed customer feedback loop looks like?

What are the factors that determine the success of a closed-loop feedback process?

As a business owner, you should be on top of the factors and characteristics that render the feedback process successful.

Here we have shortlisted a quick checklist you can implement if you are clueless about your closed-loop feedback system.

Let’s discuss it in detail, shall we?

1. Always begins by setting targets.

Closed-loop feedback systems are goal-oriented. Setting the targets is crucial to a good closed-loop process as it pushes the company to close the loop quickly and improve retention rates.

This in return ensures the chance of generating positive responses from customers.

We suggest you focus on two main targets — 1) covering a large percentage of survey respondents to close the loop with, and 2) closing the loop at a higher speed.

2. Measures the results and impact.

A good closed-loop feedback mechanism helps companies measure the impact of their actions. Remember, you can check certain factors to see if your closed-loop feedback is working.

You should first check if the number of responses or the overall response rate is increasing. Secondly, check if your NPS score is increasing.

Did you know the NPS scores can increase by an astounding six points if you close the feedback loop effectively?

Lastly, you should check for an improvement in sales.

3. Prioritizes agility.

Speed is key if you intend to create a successful closed-loop feedback system. The faster you respond, the faster you will be on your way to resolving the issues.

You should make sure you don’t respond to customers weeks or months later. Such late reactions can make customers angry and can prove to fuel the fire.

A good closed-loop system prioritizes fast response as it goes a long way in impressing customers. One of the most effective ways to do that is by creating automatic alerts for the feedback!

4. Encourages non-responsive audience.

A good closed-loop feedback system is one that brings all the customers on the same page.

How does it do that? Well, it does that by not ignoring customers that don’t respond to the surveys.

Whenever you end up conducting an NPS survey, make sure you send emails or newsletters to all your customers (including the non-responsive ones) explaining how you intend to improve your products, services, and overall customer experience.

This will encourage the non-responsive audience to partake in future surveys.

Best practices for closed-loop feedback

By now, you must have got an idea of what you can achieve with a closed-loop feedback system.

But, how can you make the most of the existing closed-loop feedback process? It’s important that you follow the best practices involved in improving closed-loop feedback systems.

Here are some of the best closed-loop feedback best practices we highly recommend —

1. Respond quickly to customers.

You should respond to the customer feedback ideally within 24 hours. Ensure a prompt and professional response while closing the feedback loop. Also, make sure customers leaving negative reviews are tracked and quickly connected to by a customer support representative.

2. Put a clock on recurring issues.

Remember, customers will not interact with your brand if they see that you don’t change or rectify issues. Therefore, make sure you track the responses and the work being done to improve the customer’s experience.

We suggest you invest in a customer experience management platform to stay on top of customer feedback.

3. Focus on passives and detractors.

Promoters might not provide you with much information about the customer experience. But passives and detractors will do that without fail. Therefore, you should focus on passives and detractors and make sure you hear them.

Also, put your best effort into resolving their issues as only this can turn them into promoters.

4. Choose the correct communication channel.

Are you using the right communication channel to respond? Indeed, phone calls are the best way to get personal with the respondents and make a solid impression. But this is quite a time- and effort-intensive task.

We suggest you try responding through email. Make sure you clearly communicate the progress and overall plan to customers.

5. Closing loop on all levels.

The closed-loop feedback system shouldn’t just be the responsibility of your customer service team. Indeed, they are well-trained and equipped to get the job done.

But we suggest you engage all the departments and levels in your company to respond to the customers. This is a sure-shot way to reduce unnecessary churn.

6. Review the system quarterly.

We highly recommend you review the closed-loop feedback system every quarter to check how the system helps you with key decision-making. Review the system’s performance and share the report with the customers via email.

Explain to the customers how you intend to capitalize on the feedback received for a major improvement in customer experience strategy.

Summary of closed-loop feedback system!

You have successfully reached the end of this extensive closed-loop feedback system guide. We are certain that you have developed a keen understanding of the closed-loop feedback process and how to implement it for business success.

It’s time to apply the information by coupling them with the best practices we shared above. After all, it is important to create an efficient closed-loop feedback process!

Companies that invest in a closed-loop feedback system find it easier to stay connected with their customers and make tremendous improvements in their products and services. And all of this leads them to develop a stellar customer experience.

It’s time for you to close the loop on your customer’s feedback! Did you find this post helpful? Also, don’t forget to check out other informative posts on the blog!

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