What is a Feedback Loop & How Do They Work? (+ Examples)

What is a Feedback Loop?

Companies that produce customer-centric strategies often find themselves leading the competition. They put their money on customers’ feedback and consider them during product design and marketing processes.

However, brands need to come up with an impeccable feedback loop to never miss out on acknowledging positive or negative opinions customers share, especially across public platforms.

To help you make the most of this opportunity, we recommend you read through this extensive guide, figure out what is a feedback loop, and more importantly, develop a strong foundation of feedback loops.

So let’s cut to the chase and get started, shall we?

Table of contents
What is a feedback loop?
Why are feedback loops important?
How does a feedback loop work?
What are negative feedback loops?
Negative feedback loop examples
What are positive feedback loops?
Positive feedback loop examples

What is a feedback loop?

A feedback loop is precisely how the term sounds — a loop that facilitates communication between customers and companies. In other words, it is a process that allows customers to leave feedback and companies to acknowledge them.

In technical terms, you may address a feedback loop as a process in which system outputs are fed back into the system.

In a business environment, feedback loops are important as it helps companies use customer or employee feedback to develop better services or products.

Let’s dive deeper to understand why companies should double down on feedback loops.

positive feedback, negative feedback

Why are feedback loops important?

Customer feedback loops are essentially mutual causal interaction in which both customer and brand impact each other. There are several reasons you should address customer feedback and develop a solid feedback loop in today’s market.

Now that you understand what is a feedback loop, here are a few benefits you may consider.

1. Strengthen existing customer base

Building a reliable feedback loop helps companies maximize the LTV (Lifetime Value) of the existing customers. As you retain more in the existing customer base, there will be less pressure to find new clients.

2. Build better relationships

Customer engagement is a huge trend in modern-day marketing as most online marketing platforms are built to help brands and customers come closer.

Feedback loops facilitate maximum utilization of such platforms and help companies get to know customers’ needs and expectations.

3. Generate trust and loyalty

When brands use customer feedback as a central element of their product and marketing strategies, several opportunities open to create long-term business-customer relationships and gain market trust.

4. Reduce negative feedback

As you contemplate and work on more and more feedback customers leave, you will eventually hit a point where you will experience a significant reduction in customer complaints.

5. Helps with future planning

Feedback loops, when developed properly, keep companies in check, help with market research, and prevent wishful or delusional thinking. In other words, these help brands let users decide which product to launch and which product to scrap.

6. Capture more market

Companies that are closer to their user base often gain more market share. This is because they have a better idea of the issues customers face, what they expect out of their products or services, and which part of the process they like the most.

7. Showcase professionalism

Feedback loops give companies a solid opportunity to showcase their professionalism and generate a strong online reputation. Not just that, it helps brands leverage word-of-mouth marketing — the most effective form of marketing there is.

positive and negative feedback

How does a feedback loop work?

Now that you are well-acquainted with what is a feedback loop, it’s time we move on and learn how it works. To keep things simple, you may divide the entire process into three crucial stages. Let’s discuss them in detail.

1. Information gathering

The very first step to making a feedback loop work is to gain as much information as you can from a customer, especially one that has recently purchased and used your product or services.

Most of the time you will have to request feedback. Other times, customers will leave unsolicited feedback.

How will you record customer feedback? Well, you may ask customers to fill out a survey form or just connect with them personally to throw some secondary feedback-related questions at them.

You may ask both open-ended and close-ended questions depending on the kind of answers you receive from the customers.

2. Information analysis

The next step in the feedback loop process is to put the feedback in order and analyze them carefully. Once the data is collected, it’s time to divide it into positive and negative feedback (we’ll discuss this in a moment).

In other words, you are trying to make sense of the information collected in the first step.

Analysis helps companies decipher customers’ perceptions, expectations, and experiences regarding how their brands, products, and services work.

In this stage, you should be looking for patterns, facts, and conclusions which will help turn data into meaningful information. The job is half done after this stage.

3. Implementation

No, it’s not the time to kick back and relax. We are headed to the most important part of the feedback loop process — implementation. In this stage, you will have to determine how to respond to customer feedback.

Companies will use this step to communicate with customers and the internal teams — making sure the events leading to positive feedback are repeated and the ones leading to negative experiences are avoided.

You may use automation to address simpler issues which helps focus on priority cases. The idea is to use or implement the learnings of customer feedback loops in the quest to improve customer experience and employee satisfaction.

Once completed, you may consider the feedback loop closed.

negative feedbacks, negative feedback loop

What are negative feedback loops?

While we won’t suggest you aim to generate negative feedback for your company, these certainly help stay grounded and understand the gaps in your customer experience design process.

Indeed, these are not ideal to receive. But, negative feedback can drive major improvements in your products and services.

So, negative feedback mechanisms are not bad in general. You will be dealing with customers’ complaints and grievances and using them as constructive inputs for the design process.

When addressed properly, negative feedback loops can make customers feel valued, respected, and cared for. Let’s learn about negative feedback loops through these examples.

Negative feedback loop examples

Example 1. Bad customer service

What should you do when a customer, disappointed with your product, contacts customer support only to experience further incompetency in your CX process? Here’s a negative feedback loop you should use in this case.

  • Tell customers why it is taking time to resolve issues through customer support (peak season, long queue, or more).
  • Offer compensation in the form of discounts or another purchase.
  • Let the customer service department know of this issue.
  • Resolve the problem by adding more customer service channels.
  • Update the customer service hub to show that issue has been resolved.
  • Notify customers about the negative feedback trend and the changes you have made to resolve the issue.

Example 2. Buggy product

What would you do if a customer complains about receiving a buggy or faulty product, especially when the bug is entirely new to you? Here’s the negative feedback loop we recommend you follow.

  • Acknowledge the complaint by offering compensation to the customer in the form of a discount.
  • Create a service page on your site that will address this very bug or issue and provide solutions.
  • Let product developers know of this issue and demand solutions.
  • Once you have the solution, notify your customers about this negative feedback trend and show that you have resolved the issues. Moreover, ask customers to leave more feedback to help you serve them better.

positive feedbacks, positive feedback loop

What are positive feedback loops?

Constantly improving each aspect of your business is quite a challenging task. The positive feedback loop continues to figure out the processes that are functioning just fine.

We suggest generating as many positive feedback mechanisms as possible to help affirm the effectiveness of your existing customer journey.

A positive feedback loop lets brands know which processes to recreate more often to deliver excellent customer experiences.

Let’s learn more about positive feedback loops through these examples.

Positive feedback loop examples

Example 1. Supportive customer service

How will you respond to customers that find your customer service representative really helpful and the entire customer experience excellent? Here’s a positive feedback loop mechanism that will help you address such positive feedback.

  • Find out if the trend relates to just one service agent or the entire team.
  • Connect to the team accordingly and congratulate them on performing well.
  • Collect feedback from the team or agent and update the customer representative training process to help other agents perform better.
  • Develop a reward system or scheme for agents that receive positive customer feedback.
  • Let your customers know of this positive feedback trend and highlight the customer service agents (people behind the good work) through social media posts/stories.

Example 2. Products help solve problems

How will you respond if customers find your products or services useful and claim that they helped resolve certain customer issues? Here’s a good example of a positive feedback loop we suggest you follow.

  • Connect with the customers and ask them to make more useful suggestions.
  • Add these customers to a customer-driven research panel for future use.
  • Let product developers know about the feedback and encourage them to further improve the solutions.
  • Let the customers know of this positive feedback trend and that you’d like to receive more constructive feedback to help you serve them better.

Final thoughts!

While you develop a feedback loop for your company, it’s crucial that you implement the best practices such as delivering proper feedback acknowledgment, choosing the right channels to receive feedback, leveraging automation, feedback onboarding, and more.

We mean, what is a feedback loop without the best practices? After all, these will help add feedback loops to your existing customer experience or CX design process.

We believe that such an outside-in approach eventually puts your customers in the driving seat of the whole process — maximizing customer satisfaction. Finding it hard to develop a feedback loop for your company?

Why not use one of the simplest feedback solutions in the market? Get started with your own customer feedback loop today, only with JustFeedback!

Did you find this post helpful? Let us know in the comments. Also, don’t forget to check out other informative posts on the blog!

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