Most of us like to think we understand why customer feedback is important for business. But if pressed, we often find it challenging to explain exactly how feedback helps a company grow. That’s where we come in.
Before we dive into our top 10 customer feedback benefits, let’s clear a common misconception up. We often 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.
So, now that’s covered, let’s get stuck into exactly why customer feedback is important for your business…
Customers have a choice where they spend their money. You want them to welcome your offers and promotions, not ignore them.
Understanding why customer feedback is important helps ensure your customers are happy, so your marketing efforts don’t fall on deaf ears.
Don’t rely solely on an annual survey to gauge overall happiness. Make sure you check if each customer is willing to buy from you again. If that sounds costly, compare it to how much you spend in sales and marketing to win a new customer!
Word of mouth recommendations grow your business, and cost nothing.
But, a customer needs to trust you won’t damage their reputation by giving bad service after they recommend you. This is where the benefits of customer feedback really come into play. By collecting and, more importantly, acting on feedback, you can ensure everyone is 100% happy and more likely to recommend you when given the chance.
You can ask customers how things are going face-to-face, and they’ll say ‘fine’, even if that’s not what they’re thinking.
Small niggles can build up over time and make customers more receptive to a pitch from a competitor – it’s better to make the grass always greener on your side by making it clear you always welcome candid feedback.
Encouraging honest feedback not only helps you address minor issues before they become major problems, but it also shows your customers that you value their opinions. This approach will strengthen loyalty by showing you are dedicated to continuous improvement, and are not afraid to hold your hands up when something goes wrong.
Customer feedback benefits go way beyond just making improvements. When you truly understand why customer feedback is important, you can turn those insights into success stories and testimonials - these are the oxygen that your business development teams need to thrive.
When you collect feedback, you have a brilliant source of raw material for your success stories. Depending on how your business runs, you might be able to use unfiltered feedback on your website as reviews (after getting explicit consent from your customers to do so, of course), or you could just use feedback to identify your “super fans”, and pass them to your marketing team as leads to follow up for success stories.
These real stories build trust with new customers and show off your business’s value. Plus, they give your marketing a huge boost and help attract even more customers.
If your business submits competitive bids and tenders for work, feedback has two huge benefits
First, it’s great to have a body of evidence from your current customers that you’re great to deal with. From working with our customers, we know that most feedback you’ll collect is overwhelmingly positive, so it doesn’t hurt to add a sample to any competitive bid.
But more subtly – when you collect feedback, you have all of your current customers, in their own words, saying what’s important about your business to them.
Don’t underestimate the benefits of customer feedback. When your happy customers talk about what they love about your business, it hits home with new clients. This will be very similar to what’s important to the prospective customer you’re bidding to – and expressed in a language they’re familiar with, making your bid stand out even more.
We’ve already touched upon why acting on feedback ensures that customer-by-customer, people are happy to come back, spend more, and refer their friends.
But what’s harder to quantify, and equally important, is the cumulative effects of all this goodwill.
When lots of customers are fans of your brand, unexpected things happen. The whole is greater than the sum of its parts. When many people are aware of you, and have a ‘good feeling’ about your brand, unexpected business opportunities start appearing more often… And your team start feeling better about where they work.
The best time to try selling something new is when customers are happy with you.
Recognising the benefits of customer feedback and having an open dialogue with your network allows you to not only hear any issues customers have, but also resolve them. If you’re going the extra mile for your clients, yes, they will be happy, but you’ve also created a solid ground for trust, making them more likely to consider cross-sell and up-sell opportunities you present to them.
Getting praise and sharing customer feedback with your team can give your staff a real boost. It gives them confidence that business is on the right track, they’re doing a great job, and peace of mind that another customer account is secure.
Every time a customer gives praise, someone in your business feels like a hero. This is one of the great benefits of customer feedback. It not only pumps up your team, but also builds a culture where everyone wants to keep getting better. When employees see how their hard work makes customers happy, they stay more engaged and motivated, which can take your business to the next level. It’s a win-win, both internally and externally.
Receiving verbatim comments from customers means there’s nowhere to hide. All the training courses in the world are no substitute for lessons learned through personal experience.
A tough comment can feel raw, but as long as you learn from it and put things right, you’ll never make the same mistake twice. And it’s easier for the feedback to come from a customer than a colleague, because the person receiving the feedback knows there’s no agenda.
One of the biggest benefits of customer feedback is that it helps you truly understand your customers. By using feedback surveys, you get to dive deep into what your clients think, feel, and want. It’s like having a backstage pass to their thoughts!
When you know your customers inside and out, you can tailor your products, services, and marketing efforts to fit them perfectly. This not only makes your customers feel valued, but also boosts your business. You don’t have to guess what your market might want or react well to, you already know - because you’ve done the background work. So, don’t just guess what your customers want—ask them! Understanding why customer feedback is important and actively seeking it out can give you the insights you need to stay ahead of the competition and keep your customers coming back for more.
If you think benchmarking against your competitors is a 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 ten 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.
Understanding why customer feedback is important is a company’s secret weapon. It allows you to truly know your customers, keeps them happy, and can even boost your sales and team morale.
If you’re not happy with your existing feedback process, or need some guidance, we’re here to help. Use our comprehensive guides to start improving things - it’s never too late!
If you’d prefer to chat to one of our experts, simply book some time in our diary. We’re happy to help and share our knowledge, whether you buy from us or not. Let’s work together to make the most of your customer feedback and take your business to the next level!
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