Why is customer feedback important? 9 Reasons.

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Most of us have a ‘gut feel’ that customer feedback is good for business. But if pressed, we struggle to go into detail about exactly how feedback helps a business grow.

We’re here to help.

But before we go into the 9 (count them!) ways that feedback improves any business, we need to clear something up: Sometimes we hear people talking about “the benefits of customer feedback”, but what they mean is the benefits of market research. Research is great, but don’t fall into the trap of calling it feedback.

Feedback is giving all your customers a chance to tell you what you need to do to keep their business – and dealing with the individual responses.

Research is asking lots of questions of some of your customers and reporting on the results (for example to influence strategy or inform new product developments).

When we see bad customer surveys, it tends to be because someone with good intentions is mixing up market research and customer feedback.

Finally, before we dive head-first into the benefits, remember that the businesses who see all nine of these benefits have put in a lot of hard work – getting buy-in and training their people – to get where they are today. But they all had to start somewhere.

If you’re not happy with your existing feedback process, use our guides to start improving things – it’s never too early or too late!

Don’t fall into this trap…

Sometimes we hear this ‘benefit’ given as a reason that it’s important for a business to collect feedback. But there’s a huge problem with it.

Benchmarking isn’t a benefit

If you think ‘benchmarking against your competitors’ is a business benefit of customer feedback, then think again.

We know that you’re curious about how the competition are doing. But finding out isn’t going to make you more profitable. What does it matter if you’ve got an NPS score of 20, and your competitor has a score of 50? It’s the direction of travel that’s important. A NPS of 20, up 5 points from last quarter is a much better indicator of future success than a score of 50 which is dropping like a rock.

If benchmarking is your objective, you’ll pretty quickly find yourself breaking the golden rule of making your feedback process 100% customer-centric. The project will become more of a research exercise than a genuine effort to make things better for your customers.

This might bit sound like the worst thing in the world, but it’s the golden rule that lets you reap the nine benefits above. It’s not important to “collect feedback”, it’s important to have a customer feedback process that your customers love.

So you can sacrifice all these benefits in pursuit of benchmarks… Or you could experiment with not pursuing satisfaction benchmarks, and seeing if your organisation ends up better for it. We’ve worked with hundreds of teams who’ve let go of benchmarking, and we don’t know of one who would trade their delighted customers for the "gossip" of knowing how they’re doing against their competitors.

And if you ever feel you need a helping hand around your shoulders, we’re here for you.

Where next?

Dealing with complaints

Complaints are bad, right? Not quite. If you approach them in the right frame of mind, you’ll wish your customers complained more. Learn how.

« Read more

The Golden Rule

If we only had 30 seconds to tell you one thing that would transform your customer feedback efforts for good, for ever, this would be it.

Read more »

Have we answered your questions?

Helping people use feedback better is what gets us out of bed on a morning. No matter if you’re new to this or a feedback guru, you can call us – we’d love to hear from you.