Customer Feedback: Understanding Its Benefits, Methods, and Tools

In today’s business world, customer feedback is a crucial component in shaping the success of a company. It is a method of gathering information from customers about their experiences with your product or service. This information is then used to improve your offerings, identify areas that require attention, and gain insights into what your customers want and need.

There are various methods and tools for collecting customer feedback, ranging from online surveys and focus groups to social media monitoring and customer service interactions. With the help of modern technology, businesses have more opportunities than ever before to connect with customers and gather their opinions.

But why is customer feedback so important? By actively listening to and addressing customer feedback, businesses can improve customer satisfaction, increase brand loyalty, and ultimately drive revenue. Additionally, gathering customer feedback can provide valuable insights into the competition and industry trends, giving companies a competitive edge.

In this blog post, we will explore the various benefits of collecting customer feedback and the different methods and tools available to do so. We will also discuss best practices for analyzing and utilizing customer feedback to drive meaningful change within your business.

What Is Customer Feedback?

Customer feedback refers to the information, opinions, and insights shared by customers about their experiences with a product, service, or brand. It is a critical component of any successful business, as it provides valuable insights into customer preferences, needs, and expectations.

Effective customer feedback can help businesses identify areas for improvement, enhance customer satisfaction and loyalty, and gain a competitive advantage in the marketplace. Feedback can be gathered through various methods, including surveys, focus groups, social media, and online reviews.

The Customer Feedback Loop

A customer feedback loop is a crucial component of any successful business strategy, aimed at improving the quality of your products or services based on your customers’ input. This loop is built on the principle of constant interaction between your business and its customers, enabling you to gain valuable insights into their preferences and needs. By soliciting customer feedback, you can gain a better understanding of what aspects of your product or service resonate with your customers and what areas require improvement. This information can be used to enhance the overall customer experience, make necessary adjustments to your product or service, and strengthen customer loyalty.

Your customer feedback loop can be broken into four stages:

  • Gather: Getting as much feedback as possible.
  • Segment: Organizing your feedback into relevant groups to get a consistent story
  • Analyze: Looking for new information about where customers dropped off, where they were the most engaged, and how things have changed since your last round of feedback.
  • Act: Make changes that can streamline processes and improve your product.

Implementing a customer feedback loop is how you’ll drive positive change within your offerings.

Importance of Customer Feedback

Without customer feedback, your company may never know whether customers are getting value out of your product or service offerings. And without knowing if they’re getting value, the product and go-to-market teams won’t know if they’re nurturing loyal customers or be able to measure customer retention and customer health.

5 Benefits of Customer Feedback

Here are five reasons why customer service is essential for your business:

1. Provide a better user experience

Today’s marketing is heavily based on a user’s experiences with products, services, and brands overall. By focusing on providing the best customer experience at every touchpoint, clients will stay loyal to your brand. And the most effective way to give them an amazing experience is to ask them what they like about your service and what should be improved.

“Customers’ salient experiences with the company heavily influence their long-term switching behavior and reflect the true drivers of loyalty.”


2. Improve products and services

Customer feedback provides insight into what’s working well about your product or service and what should be done to improve the experience. You might have the best expertise in your market or industry, but your professional knowledge will never be more valuable to business performance than customer insights.

Customer opinions help you ensure that your offerings meet their expectations, solve their problems, and fulfill their needs.

3. Measure customer satisfaction

Customer satisfaction and loyalty are crucial factors determining a company’s success. It is directly linked to several benefits, including increased market share, lower costs, or higher revenue. There’s an undeniable connection between customer satisfaction and business performance, that helps ensure that your clients are happy with your products and services.

The best way to determine if you meet your customer’s expectations is to gather their feedback and opinions. Using rating-based product feedback survey questions, you can easily estimate the level of satisfaction and consequently predict your company’s financial condition in the future.

4. Prevent customer churn

Customer feedback is an opportunity to prevent customer churn and foster long-term relationships with them.

Unhappy customers need a little extra work – pick up the phone and call them, hone in on their pain points, and strive to provide an effective solution. Checking on them regularly and showing you care goes a long way in building a healthy business relationship and ensuring customer retention.

customer churn rate

5. Make data-driven decisions

Customer feedback is one of the most reliable sources of data used for making business decisions. Taking their suggestions into consideration may reveal where you should allocate your money to get the highest return on investment.

For instance, you might discover that further product development is not necessary in your case; instead, you should focus on promoting your brand to get bigger exposure.

Customer feedback is a valuable source of such data, but the key is to learn how to listen to it and translate it into actionable takeaways for your business.

7 Most Effective Customer Feedback Methods

There have never been more options available for how to collect customer feedback. Companies can collect customer feedback proactively or passively, and both methods provide insights that take your product offerings to the next level.

Here are the seven most effective ways to collect customer feedback:

1. Surveys

Online survey tools often come in the form of a feedback button or email invite and have become increasingly popular since the emergence of website feedback.

In the past, surveys were well-known for their tendency to include a long list of questions. Today, they are becoming shorter and shorter – which makes them less of a hassle for respondents who simply don’t have the time or energy to fill in an entire survey.

Tips for writing a customer feedback survey:

  • Ask questions that help you understand your customers.
  • Write thoughtful open-ended questions.
  • Create consistent rating scales.
  • Avoid leading or loaded questions.

With Whatfix, you’re empowered to create targeted, in-app user surveys to gather customer feedback and insights, without the need for development support.


2. Contact forms

Contact forms are one of the easiest ways to gather candid customer feedback. Because it’s a support channel for most companies, you can use each interaction as an opportunity to gather feedback. To maximize the likelihood of hearing back from a customer, be sure to set clear expectations, organize the form appropriately, and send personalized responses.

Tips for creating contact forms:

  • Add context to the contact
  • Optimize for mobile
  • Make mandatory fields clear
contact form

3. Usability tests

For usability testing to bring valuable insights to your company, it requires more upfront planning. With a clear strategy, you can uncover challenges that customers don’t realize they’re facing and actionable insights that make their experiences better.

Tips for conducting usability tests:

  • Create solid testing scenarios
  • Identify success criteria
  • Test early and often

4. Customer interviews

Reaching out to customers directly opens up conversations that otherwise wouldn’t happen.

Qualitative stories from customers bring color and nuance to quantitative feedback (data). These personal experiences help a team understand the feelings behind customer decisions and the community response to a company’s brand or decisions.

When you conduct customer interviews, you create the opportunity to challenge false assumptions that developed over time.

Tips for conducting customer interviews:

  • Start an open-ended dialogue
  • Get more specific as you go
  • Practice active listening
customer interview

5. Social media

Social listening can give you access to a pool of candid feedback from customers. Direct comments or mentions on social networks aren’t the only way to collect customer feedback. There are many other networks including built-in polling tools.

Tips for managing social media feedback:

  • Set up a dedicated handle for social media customer support
  • Create social media guidelines
  • Be proactive
4 Simple Strategies For Excellent Customer Service On Social Media

6. In-app feedback

In-app feedback tools are used to provide a shortcut to submit feedback to app users. With the in-app feedback process, users can rate or submit the feedback directly from the app screen.

Whatfix’s in-app feedback surveys make it easy to gather feedback and insights from users in real-time.

Tips for gathering in-app feedback:

  • Make the feedback widget discoverable
  • Leave room for open-ended feedback
  • Send push reminders

7. Onsite activity via analytics

Analytics reveal what customers don’t know about how they use your product. Especially if you sell a digital product or service, you benefit from leveraging analytics to understand how users interact with your company.

For example, if you offer self-service support content as a form of customer service, you could see the number of people visiting each article. If one article has an 0:09 average time on the page and an awful bounce rate, you know something isn’t sticking about your messaging. Reporting tools give you insights about failed searches, most frequently visited pages, and more you can improve your customer’s self-service experience.

Tips for using onsite activity analytics:

  • Automate reports
  • Determine appropriate performance metrics
  • Use campaign tracking codes

4 Customer Feedback Best Practices

Customer feedback can reveal how customers use your product or service and expose opportunities for improvement in your business. With the right processes in place for collecting, managing, and using customer feedback, you can save time, collect better data, and use those insights more efficiently.

As you work on a strategy for customer feedback management, consider these four best practices.

1. Use the right tools

Customer feedback management tools may include a number of features to help create, administer, and collect feedback. Make sure that the software you’re using makes sense for the feedback that you want to collect.

For example, if your goal is to collect between 50 and 100 responses answering a simple NPS question, you may only need a simple form and an integration into a spreadsheet. A system made for collecting and quantifying thousands of responses probably isn’t necessary.

However, if you plan to send out more complicated surveys, other tools for formatting, sending, and organizing your responses can help you save time. The right tools can even help you automate this process.

2. Implement changes quickly

Once you’ve gathered customer feedback, be ready to take action and make changes. Drill down the customer feedback into actionable insights and start implementing them. The best way to approach them is by priority and volume.

A features page showing a 404 error is a higher priority than a popup that covers the content. You should first address the issues that are preventing your customers from getting the most value out of your product. Then you can address the high volume, common requests you received.

3. Communicate changes to customers

Once you make improvements based on customer feedback, let your customers know. This is your chance to highlight how good you are at giving your customers a voice in their experience with your business.

4. Track behavior and performance

Keep track of the trajectory of your customer feedback over time. Ideally, you want to see an increase in satisfaction as issues are identified and addressed. Take note of negative spikes and focus in to uncover the underlying causes.

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