It’s easy for companies to be passive about collecting customer feedback: Send out a survey. See which customers are unhappy. Try to fix the problems. Repeat in six months. Pretty straightforward, right?

The flaw in that plan is that an effective customer feedback loop doesn’t focus only on the interests of your best customers, your problem customers or even your unhappiest customers – it needs to focus on ALL of your customers, with the end goal of customer retention.

The four phases of feedback

You likely already have systems in place to collect customer feedback. However, a closed customer feedback loop is the most effective way to take your customers’ experiences and use them to improve your team, your company and ultimately, your customer relationships. The closed-loop system has four phases: experience, feedback, learning and sharing.

  • The experience phase is the initial interaction between company and customer. You provide your customer with a product or service, and the customer either has a satisfactory experience, or finds it lacking.
  • This is the phase most companies are familiar with: You provide your customer with a pathway for feedback, usually by sending a digital form in which you ask the customer to rate his or her experience in a series of agree/disagree statements and to provide other written comments.
  • But wait, you’re not done yet. Now it’s time to initiate a follow-up call with the customer (if the customer is open to such a call) with the goal of learning more about the customer’s feedback and any problems in the relationship that the survey might have revealed.
  • Lastly, take all of the information and data compiled during the previous phases and use it to educate your team, while reinforcing your core customer service values in the process. Your team will then use this new information to improve future customer experiences. Then you start over with the experience phase, ideally going through the cycle with every customer at least once per year.

Using your loop

Developing a system to collect and address customer needs can go a long way toward helping companies reduce customer complaints, uncover opportunities and get more out of their customer relationships. That’s why a feedback loop is a key step in the customer engagement process.

Without this loop in place, you’re essentially winging it when it comes to customer retention. And that’s exactly what your competitors are hoping for.