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Why is everyone talking about closed loop feedback system? Why you should too!

Mathew Maniyamkott

Mathew Maniyamkott

9 min read

Getting feedback from customers is usually about collecting a bunch of data, usually just for market research and not always do you find companies making changes based on the feedback that is received, which makes it an open loop system. The outcome of such an exercise is not necessary to make changes because of which there is no improvement in the present situation. But if you use a closed loop feedback system, you are more prone to making changes based on the feedback received.

When you have a solid closed loop feedback system, you put yourself in a position to create an extraordinary experience for your customers.

In fact, when customers agree to take a survey, they usually expect that you will make improvements based on the grievances they have aired in the feedback. When businesses don’t do this, they are usually dejected because their opinion is not being valued enough to create a change. If you are business, then using a closed loop feedback system can be a game changer since feedback is considered closed only when follow-ups are made, and a customer’s request is acceded to in such an exercise.

What is meant by closing the loop?

Closing the loop can be described as responding to customer feedback, which is something that does not happen when you take open-ended questions. Closing the loop ensures that the customer’s inquiries are acted upon, thus satisfying them. An open loop system is essentially where there is no action taken based on the feedback that the customer gives which doesn’t contribute much to the end customer but these kinds of feedback responses are usually used to find out the ‘numbers’ associated with their brand.

Example of a closed loop feedback system:

Let’s say you purchase a product online and it is not necessarily satisfactory as you expected. The company that you purchased from sends you a feedback survey to ask if you liked the product they delivered. You rate them based on what you thought about it while also listing in detail about how it could have been better. The next day you get a call from their customer service representative asking you about the issue you faced. They give you ample details as to what went wrong and how they are planning to rectify it in the next two days. Within the next two days, your issue is resolved. All of this was made possible because they not only asked for your feedback but also acted upon the comments that you made.

Why is it important to close the loop?

When you have a solid closed loop feedback system, you put yourself in a position to create an extraordinary experience for your customers. Not closing the feedback loop might lead to a loss of trust among your customers who were expecting some sort of reaction to the feedback that they give.

A business must realize that when a customer gives feedback, they have opened a channel of communication. It is your responsibility to respond to the feedback with appropriate messages. Only when you close the communication is the feedback loop closed. The feedback that you get from your customers can contribute to actions that improve the customer experience of all your customers which will increase the number of positive responses that you get from your customers. Closing the feedback loop consistently will put you in a position where you are making small improvements to your business which will eventually make all the difference.

The intention of a closed loop feedback system is rather simple: to solve issues and thus close the loop.

Here is how closing the feedback loop increases your brand value:

1. Increases brand loyalty

When you go to your customers and chat with them to get feedback from them, you not only get results that you can use to improve your service but it also adds a new dimension to your relationship with the customer. People who have already been loyal to you will trust you even more and will be vociferous supporters of your brand and will also spread the word about you. Customers who had been wronged earlier will most likely stick with you or at least keep you as an option.

2. Sets up a direct line to correspond

One of the biggest complaints that a lot of businesses face is that it is not easy to get any of their issues resolved when they run into any trouble while using the product or are looking to chat with the customer service. It will be a huge relief for your clients because most businesses make it extremely difficult for its customers to reach them directly.

3. Solve product issues early

The best part about asking feedback from your customers is that they have used your product and are more likely to run into issues which you might have left unnoticed. When you close the loop with your customers, you are naturally solving all the issues that irritated your customers.

4. Identifies the customer

To follow up in a personal way, you need to know who your customer is and what their responses were. Closing the feedback loop would ensure that you commit to doing this by knowing their details. The business can take care of the customer with the details provided and if you have the requisite resources, then you can also provide personalized attention which can create a lot of difference in terms of a customer’s perception about your brand.

5. Creates a customer-oriented design

One of the best things about keeping an open eye in solving customer’s issues by closing the feedback loop is that it becomes a part of your culture when you keep doing it consistently. When this is practiced regularly, it becomes a part of your company’s processes, something as natural as filing the taxes.

6. Find areas where you are good at and where you lack

Closing the feedback loop puts you in a position where you are continually improving and educating yourself as well as your customers about the brand and finding areas in which you are lacking, either in terms of service or the product itself. A better understanding of what your customers think about your product, the features that you offer and so on can give you insights on the trends that will follow as well as the usual issues that your customers face.

 With the right system to close the feedback loop, you can also increase sales for a more positive feedback.

7. Creates an action-oriented system

The intention of a closed loop feedback system is to solve issues and thus close the loop. This is achieved by asking questions to the customer based on the initial feedback given. A traditional feedback system usually emphasizes on factors that affect the company while a closed-feedback loop system is designed in such a way that it measures things that the customers care about.

8. Deliver leads to salespeople in real-time

A Harvard Business Review study says that contacting the lead within the first hour were 7 times more likely to go to the next stage in the sales cycle. The study even says that average response time for follow-ups were usually 42 hours and that 23% of the companies never responded. Collecting feedback is the first step in your attempt towards closing the feedback loop and if your marketing department is integrated with other departments, then there are higher chances of closing a new sale if you follow up immediately. This is the kind of advantage that closing the feedback loop will do to your brand.

9. It thinks long-term

A closed loop feedback system, while taking care of immediate issues, it is also good to ensure long-term results because there is a 360-degree evaluation that happens, thanks to it. A closed loop feedback system makes it a point to ensure that internal issues are solved immediately which causes problems to the customers in the first place. A closed loop feedback system ensures that there are immediate results that are possible because the root of the problem is focused upon.

10. Automation makes it easy

Ensuring that a prompt follow-up happens is one thing that you should take care of. There are times when it is impossible to respond to all the inquiries, this is where automation comes into effect. The faster you respond to your customers, the more you can impress them because swift action is what they are expecting. A closed loop feedback system will automate the process of collecting feedback and making sure the issues are segmented into different categories and are responded accordingly.

Essentials to build a closed loop system

There are three main components in creating a closed loop feedback system. They are as below:

Creating a ticketing system: In a ticketing system, every time a customer raises a request, these comments are fed into a CRM where they are assigned to a customer service executive. The customer service executive tries to solve the issue of the customer by performing various steps. You can use platforms such as Salesforce which will manage all the customer details and relationships.

Case Management: Here, the ticket is tracked all the way to its resolution and each of these is monitored and made sure they are assigned to the right team members as well. You can also have goals where at least a percentage of the issues are resolved within one hour or so. These are benchmarks that you can use to satisfy your customers as well as fasten the response rates. It pays to have all the information about the client in a single place, including their NPS since it makes it easy to communicate in the subsequent conversations.

Account Managers: If you can afford to have an account manager for each client, then you can ensure that each customer is personally responded to, and if they have issues that need to be sorted immediately, then you can act on them accordingly. There can be a lot of account managers and the best ones will be graded on how fast their resolution rates are.

Contacting the lead within the first hour is 7 times more likely to go to the next stage in the sales cycle. Harvard Business Review study

How to create a closed loop feedback system?

When you have a lot of customer feedback responses coming your way, it might be a little tough to handle all of them. Without the closed feedback loop system, no questions or issues posed by your customers will go unnoticed and you will even strategically make improvements.  There are some ways using which you can close the feedback loop, some of them are here to consider.

Step #1: Come up with a strategy

The reason why we ask you to come up with a strategy for devising a closed loop feedback system is that there are many ways you can approach it, most of which depend on your business goals. You need to know which are the areas that have the greatest impact on your revenue. If there are a lot of comments that are positive when you send out a feedback survey, you need to find out which are the features of your product or part of your service that your customers appreciate more and work on strengthening them more. If there are very few customers who have given you negative feedback, then you should take the time to respond to each of them to know what irked them with your business enough to leave a poor rating.

Also, find out some of the common themes that you find in your feedback surveys, from both positive and negative type of feedback and use them to reach conclusions. You should analyze feedback that you have received from different time sets to understand if there are metrics that changed in the feedback.

Find out if you can find innovative ways to close the churn that happens because of the negative experience that your customers face. Understand the risks that you face if a lot of customers leave you for a competitor, put money into closing the feedback loop so that you can retain more customers. Create actions and offers which are personalized enough to solve the issues that your customers face.

Step #2: Create workflows to close the loop

Sure, there are separate apps that you can use and finally integrate them to create the desired result in closing the feedback loop. You can also use an online survey tool like Survey Sparrow which can be integrated with various other tools thus making the process of closing the feedback loop all the more easier.

Step #3: Include all customers

There are times when you have customers who do not leave any feedback, but if you can use the right tools, you can close the loop for them as well. Find out the customers who responded and find out what were their key motivations in using your product. Knowing such details can help you gauge what kind of customers are the ones who didn’t respond to the feedback survey.

Telling your customers about how you solved issues for customers (like a testimonial) who responded will be a huge boost for the ones who didn’t respond as they will realize that they have missed out on getting some changes done. Closing the loop is a critical strategy that you always need to commit to doing. In fact, some of the strategies should revolve around closing the feedback loop on automation while doing other activities in a step-by-step process.

Step #4: Collect feedback at all touchpoints

A business should realize that each customer interaction point can be a problem area if not properly developed and handled. Use trackers to find out the changes that you have made at all these interaction touchpoints. While it is your responsibility to make sure that you make changes for the overall experience of your customer, you also need to be careful about the experiences of your customers at these touchpoints which can be easily ignored.

Conclusion

Companies around the world know that is extremely expensive to find a new customer compared against keeping the existing clients. Companies have begun to invest in providing exceptional customer experiences by implementing programmes to maximize the satisfaction of the customers. As we have mentioned in the article, if there is one area where businesses have struggled, it is the aspect of closing the feedback loop.

The most that a survey respondent (also a paying customer) gets back is a ‘Thank you’ for spending their time on the survey. But there is so much that you can do with the data that you receive as a part of the feedback. In fact, there is a lot that a business ‘should do’ with the data that they get directly from their most important stakeholder- the customer.

By closing the feedback loop, you are not only retaining important customers but creating a way to make sure that they are charmed enough to stay for a longer time. With the right system to close the feedback loop, you can also increase sales for more a  positive feedback.

Mathew Maniyamkott
Mathew Maniyamkott

Guest Blogger at SurveySparrow

Regular contributor to various magazines. Passionate about entrepreneurship, startups, marketing, and productivity.

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