Customer feedback plays a crucial role in any successful organization. As a result, it’s important to embrace customer feedback rather than to fear it. This blog will discuss why customer feedback is so important and why a community is the best way to get it.
But before we dive in, a word from the wise:
“Smart companies embrace the conflicts that make communities thrive.” - Harvard Business Review
Are your customers happy? How do you know?
Customer feedback provides you with critical information about whether or not your customers are happy with your products or services. Without feedback, it’s difficult to know whether you’re meeting customer expectations and whether or not they’re feeling satisfied.
In fact, not collecting feedback is one of the biggest mistakes a business can make if you want to be the best you can be. And if you don’t want to be the best, well, you probably shouldn’t be working in business.
Why Customer Feedback Is Important
The truth is, 77% of customers will view your business more favourably if you ask for and accept customer feedback.
Without feedback, your chances of improving customer retention are drastically reduced since you ultimately don’t have the knowledge necessary or know-how to keep your customers. Here are some reasons why getting feedback is so important:
Unhappy customers will spread the word about you
If your customers aren’t happy, statistics show that the average person will tell at least 15 people about their experience with you.
Negative feedback is aimed at making the experience better for others
When customers leave negative feedback, 73% of them do this so that you can improve and your future customers can have a better experience.
Most customers leave because they feel like you didn’t care
Most of your future profits will come from your current customers
The fact is, 80% percent of your future profits will come from just 20 percent of your existing customers.
In case you need more convincing, let’s take a closer look at the 3 main reasons why feedback is so important.
1. Feedback improves customer retention
Customer retention refers to the ability of a business to retain its existing customers. It’s the measurement of how many existing customers a business is able to keep at the end of a given time.
In other words, improving customer retention means reducing customer churn.
Feedback is the best way to do this since it helps you proactively identify mistakes before they happen.
As you can see in the chart below, there are a number of reasons why customers will leave a business. The top reasons are, (1) customers feel like they aren’t being treated well, and (2) they are dissatisfied with the product.
What this shows us is that feedback is more important than ever since “not treated well,” and “dissatisfied with product” are both incredibly broad, and as such, can indicate a number of different issues, for instance:
How do you customers feel like they aren’t being treated well? Do they feel like they’re waiting too long for support? Do they feel like your customer service reps are rude? Do they feel like they aren’t being valued with rewards and incentives?
Why are your customers dissatisfied with your product? Do they feel like they often experience technical issues? Are there elements that they would like you to implement? New features they wished you had?
Feedback is what will help you get to the bottom of this. You need to provide your customers with a space for proactive feedback, and once you figure out the answers to these questions, your retention is more than likely to improve.
2. Feedback improves customer engagement
Customer engagement refers to the engagement of your customers with your brand and with each other about your brand. It’s the processes that a business puts in place to build and develop these relationships and form a bond with their customers.
It’s really about making customers feel like they are a part of something, that their opinions are desired and valued, and that they are helping to contribute to the brand that they love.
Customer engagement is something that every business should strive for since it’s extremely beneficial. Results of customer engagement include, but are not limited to, the following benefits:
Developing customer loyalty
Finding brand advocates
Creating hype around the product
Decreasing churn and increasing retention
Connecting with your customers in a personal way
Now that we know why customer engagement is important, we have to ask ourselves, “how do my customers want to be engaged?” Well, the simple answer is to just ask them - ask them what they want and what could be done to improve their experience.
Give them a platform to tell you, a platform for them to speak and be heard. Customers will be more engaged with a brand if they feel like the brand wants to get their feedback and improve.
3. Feedback improves products and services
By this point, it goes without saying that feedback is central to improving your product or services, and if you aren’t always striving for improvement - what are you doing?
Customer feedback can not only help improve your products and services, but it can also help with future product development down the road.
At the end of the day, businesses shouldn’t fear feedback, especially negative feedback, because it helps shape your product and services to suit the people who actually use it. Accept the challenges that negative feedback presents and take action to improve!
Community as the Best Way to Collect Customer Feedback
Now that you understand why you shouldn’t fear feedback, but rather embrace it, let’s touch on the best way to get this feedback.
You might be thinking that the best and most standard way of collecting feedback is distributing surveys. Well to this I’d say, it doesn’t hurt, but there are more effective ways. There’s actually a ton of stats to backup the fact that surveys aren’t the way to go anymore:
72% of customers say that surveys interfere with their website experience
80% of customers actually abandon their survey before it’s complete
2% of customers will actually take your survey
Don’t worry though, there’s a better alternative. And it’s what the best of the best are doing to get feedback and customer insights: community.
Stats show that 86% of Fortune 500 companies use community to provide insights into their customer needs.
While we could just take this by face value and follow the pack leaders without doing our do-diligence, it’s important to understand why community is the best channel to gather customer feedback. It’s really all about examining the customer of today and knowing what drives them.
Customers want everything on their terms
The customer of today demands self-service options where they can find answers to their questions and provide feedback on their terms. Much like their demand to get service 24/7, they also want to be able to provide feedback 24/7, whenever they see fit.
Let’s take a look at 2 important statistics about the modern customer and what it means for businesses:
90% of customers expect organizations to have online self-service support options
73% of customers want to solve product or service issues on their own
What this tells us is that online communities are all but necessary to satisfy these needs, and that you, as an executive, should care about community. It will not only make your customers happy to have this option, but it will also provide them with a good place to leave feedback, on their terms!
Businesses are successfully using community
Feedback via an online community isn’t just a one-way street for your customer; businesses are continuing to learn the value that community brings in terms of data. According to Potion Social Software, companies that launch a branded community platform are seeing incredible value:
of companies say they turn to their community for product development
of companies say that they use their community to conduct market research
of companies state that the community has improved their decision-making
In the end, getting feedback is one of the most important things a business can do to ensure the longevity of the company and increase customer retention. A community provides you with the ability to get this feedback in an environment where you can collect it, analyze it, and put it to use.