The role customer feedback has in decision-making
There was an interview back in 1999 where a journalist was asking a CEO about his business strategy, trying to show him how ludicrous the plans were. But the CEO kept answering with two words that defined the entire interview: Customer obsession.
Once the interview ended, the CEO went and focused all his attention on customer obsession and designed the systems in his company to provide the best possible customer service.
And 20 years after that interview, that CEO is the most successful businessman in the world, Jeff Bezos, and the company he was leading at the time that obsessed with customer satisfaction was none other than Amazon.
Amazon changed many things during its 25 years of existence, but if there is one thing that they didn’t change, the one thing that they bet their future one, it’s customer obsession.
“We start with what the customer needs and we work backwards.”, Bezos would say.
And getting to this level of customer service means talking with your customers, collecting their feedback, and innovating on their behalf. Even though this seems like common sense, as we will see from the data ahead, it’s not common practice.
Common sense is not common practice
A recent study by HubSpot found out that 42% of companies don’t survey their customers or collect feedback. It’s no wonder that customers believe that companies don’t understand their needs, pains, and problems.
The phrase “we put the customer first” feels so inauthentic when only 12% of customers believe a company when they claim this.
So it’s no wonder that businesses today have problems with customer loyalty— it’s quite challenging to keep your customers when you don’t understand them. And the customers changed as well— their needs have changed, their standards were raised, and their ability to forgive brands after a mistake was diminished.
A recent study done by PwC found that one in three customers said that they would walk away from a brand they love after only one bad experience. That’s a whopping 32% of customers who would walk away from a brand after just one bad experience. And the worst thing is that most brands wouldn’t even understand why that happened because they wouldn’t know what had caused the bad experience.
That’s why companies need to get the four core demands of the customer right:
- Helpful employees
- Friendly service
All four of these demands are crucial to the customer, each hitting over 70% in importance to them.
So how do we change this?
By implementing a better human experience using the newest technology. Because the companies who succeed at customer service are the ones that combine the human touch and technology.
Care about human experience and use tech to make it happen
The first thing to change is the entire mindset regarding customer feedback. Feedback isn’t collected to have the data and sit on it— you obtain it to use it.
And the way to change that is two-fold.
The first way we collect feedback is by running micro surveys— it’s a one-click feedback mechanism that shows you how the customer feels about using a product or service.
It can be as simple as creating three emojis, one for each category, that represents the experience:
- Green smiley face— good experience
- Brown/yellow neutral face— average experience
- Red frowning/sad face — lousy experience
As the PwC study concluded, 73% of all people believe that customer experience is an essential factor when making a purchasing decision, and 65% find a positive experience with a brand more influential than great advertising.
Even though there is a limit on what you can get from this type of analysis, you shouldn’t be concerned. Just use a platform that can set up surveys to collect a lot more richer and deeper feedback that shows more data and provides more significant insights.
And if the customers trust you, they will share their data with you. 88% of U.S. consumers share more data with the companies they trust. So the more trust you can build with your customers, the more likely they’ll be open with you and share the data that’s necessary for you to provide the best possible customer experience.
Remember, getting feedback from your customers is about improving your service and products so that you can turn detractors into promoters. Kind of like what Growthabit did when it changed its framework to be more customer-centric.
One way you can set this up is by using Net Promoter Score or NPS. It’s an industry-standard way companies measure customer loyalty.
By collecting feedback and using it to improve your business service or product, you can significantly improve your results, as we can see with the following example of American Express.
American Express Transformation
By optimizing its customer loyalty, American Express managed to increase its customer retention rate by 400%, and they did this by transforming its customer support:
Their customer service before the transformation was a cost center. The mindset could be described with the following question “How much of the company time, human resources, and money was spent there?” But then they changed the way they look at customer service and now, they even call their customer service center “Customer Care Professionals.”
“You’ve got to develop relationships. You can’t do things just in a formal context.”, said Kenneth Chenault, the CEO of American Express. And they did develop relationships with their customers, improving their services, including feedback surveys, and implementing a “first-contact” solution. And nothing shows “customer service” better than when your problem can be dealt with by the first person who picks up the phone.
It’s no wonder they increased their customer retention rate by 400%, but so can you.
In the end, collect feedback and act upon it
Customer feedback doesn’t just mean collecting some data. In essence, it means getting the information necessary to build a great business, make the right decisions, and provide your customers with solutions to their burning problems.
Feedback isn’t a cost; it’s an investment in the future. And by looking at how easy it is for a customer to change brands even after just one bad experience, the pressure for the companies to do well increased.
The first step in lowering this churn rate is talking with your customers and getting the necessary feedback.