Customer Feedback Management — Transforming Insights Into Actionable Strategy

The companies we work with care deeply about their customers, and it shows. This is especially true when updating the UX of a site or overhauling knowledge base content. However, customer feedback management is often overlooked.

Companies either believe they know their customers so well that they don’t need to formalize the feedback loop, or they’re collecting a lot of feedback but lack the tools to analyze it effectively. That’s why a structured approach to managing feedback from customers is essential. Below, we’ll discuss the approach we recommend for recording and acting on customer feedback. We’ll also share helpful channels to monitor and best practices to follow.

What is Customer Feedback Management?

Customer feedback management (CFM) is the process of sourcing feedback from customers via multiple channels to guide company decisions and improve the customer experience.

At its core, CFM is a customer-centered approach to doing business that uses customer feedback as a means to deliver better service experiences and products. It’s helpful to visualize customer feedback management as a loop that includes the following steps:

1. Ask — solicit customer feedback.
2. Categorize — sort feedback into separate groups.
3. Act — share feedback with relevant parties and develop solutions.
4. Follow-up — Follow up with customers to gauge the effectiveness of your efforts.

You can use feedback tools at each stage of the loop. This can be particularly useful if you’re dealing with a large volume of data.

Now that you understand how customer feedback management works, let’s talk about the types of feedback. There are two distinct categories to consider — direct feedback and indirect feedback — which we’ll discuss below.

Types of Customer Feedback

Direct customer feedback comes from explicit requests sent to customers. For example, we might ask customers to complete surveys post-purchase or leave reviews. Indirect feedback, on the other hand, is given but not explicitly requested, such as social media posts, comments, or even product returns.

Other types of customer feedback include:

• Product or service sales.
• Support tickets.
• Technical issues and bug reports.
• Requests for product or service walkthroughs.
• Customer complaints.
• Suggestions.

With the feedback gathered through CFM, we can work cross-departmentally to identify key customers, streamline improvements, and increase revenue.

Customer feedback management is not just about finding ways to keep customers satisfied. It’s also about turning negative experiences into opportunities for positive engagement. After all, more than half of customers will switch to a different brand after just one negative experience.

Customer Feedback Management — Turning Insights Into Actionable Strategies

Before moving forward, let’s examine the differences between a customer complaint and customer feedback. This distinction is crucial when building your feedback collection strategy.

A complaint is typically shared after a customer experience and is, by definition, negative. On the other hand, customer feedback can be solicited before, during, or after an interaction. This information can range from bad to good or even neutral.

Customer complaints often stem from product or service issues, a lack of empathy in interactions with support staff, or inadequate responses to reviews or appeals for help. Conversely, customer feedback can include praise, suggestions for improvement, or comments on the effectiveness of a service interaction.

Companies must remain sensitive to the power of customer complaints, as dissatisfied customers are more vocal than satisfied ones. In fact, 56% of customers don’t complain at all—they simply switch to another brand without saying “goodbye.”

The unfortunate reality is that most complaints go unreported, meaning publicly aired grievances represent just the tip of the iceberg. This is why we advocate strongly for structured feedback collection in any company—you don’t know what you don’t know.

Why is Customer Feedback Management Important?

Feedback management offers several key benefits:

• Reduced churn.
• Increased revenue.
• Improved products and services.
• Stronger customer relationships.
• Data about key customer groups.

We’re all about growth, and while acquiring new customers is valuable, retaining existing ones is even more critical. A 2022 research study found that ecommerce brands lose $29 for every customer they acquire—a 222% increase in just eight years.

Customer Feedback Management Channels

No matter what you sell or how customers buy, there are numerous avenues to gather customer insights. Below are some of the most common feedback management channels:

• Focus groups.
• Customer interviews.
• Surveys.
• NPS (Net Promoter Score).
• Third-party reviews.
• Email.
• Live chat.
• Text.
• Social media.
• In-product requests.

In the past, focus groups and customer interviews formed the backbone of most customer feedback management efforts. These methods still hold value, especially for gathering qualitative information about specific products or aspects of a company.

However, things have shifted primarily to digital channels. We find that more companies are focusing on digital avenues because they cost less to analyze, and the data is easier to synthesize at scale.

For example, Net Promoter Score (NPS) surveys make it easy and affordable for businesses to automate feedback collection. These surveys help companies understand how customers feel about their brand overall. While different software platforms score results differently, all NPS surveys measure customer loyalty.

Live chat, text, and email are among the most direct feedback tools. With the increasing digitalization of customer service experiences, people expect quick and efficient communication when issues arise.

Let’s not overlook third-party review sites and social media platforms. These channels provide organic insights where customers air grievances or discuss their favorite brands without solicitation. If you’re new to feedback management, we recommend starting with review sites and social media to gauge sentiment.

Customer feedback management is also vital for showing customers that their satisfaction matters. People leave companies for many reasons, but two-thirds of consumers who feel a brand cares about their emotions are likely to become repeat customers.

Get Started with Customer Feedback Management

We’re strong advocates for implementing customer feedback management in a way that aligns with your brand’s unique needs. If you’re new to CFM, start by examining your existing channels, even if it’s just your social media presence or activity on review sites. From there, explore how you can aggregate the data to uncover valuable insights.

As you advance, we recommend experimenting with new channels and formal feedback collection mechanisms. Don’t overlook the power of software to automate your processes—it can save significant time and help streamline your efforts. You’ll be amazed at how a structured strategy can enhance strategic decision-making and drive meaningful improvements.