Top 9 Benefits of Customer Feedback and Reviews

Customer feedback is crucial to business growth. Yet, most organizations don’t ask for feedback in a way that leads to better business outcomes, let alone leverage the data they receive effectively.  On this page, we’ll break down the different types of customer feedback your business can gather, why it’s beneficial, and how to ask for it, so you can start building a stronger business and gain potential customers with these insights right away.

Definitions and Types of Customer Feedback

Customer feedback is the information that customers provide about their experiences with a business. Many people equate this with a traditional customer feedback survey but, in reality, customers provide feedback in a variety of ways and are continuously doing so, even if your brand isn’t consciously aware of what they’re doing.

There are many types of customer feedback. Moreover, feedback can fit into one or more categories simultaneously. Some examples include:

• Prompted/ Solicited
• Unprompted/ Unsolicited
• Structured
• Unstructured
• Explicit
• Implicit

Prompted Customer Feedback

Insights that you request from your clients are considered prompted feedback. This is sometimes referred to as solicited feedback or direct feedback. For instance, if a customer completes a survey that your business sent him, he’s providing prompted customer feedback.

Unprompted Customer Feedback

When customers share their feedback without being asked to do so, it’s referred to as unprompted customer feedback. For example, if a customer leaves an online review for your business and you didn’t ask him to, he’s providing unprompted customer feedback.

Structured Customer Feedback

Structured customer feedback is more quantitative in nature. It provides you with measurements related to the customer experience. For instance, if your survey asks customers how likely they are to recommend your business to friends or family on a scale of one to ten, the feedback is structured.

Unstructured Customer Feedback

Unstructured customer feedback is more qualitative in nature. It provides you with greater insights into why customers feel a certain way or why they behave how they do. For instance, the insights a customer shares during an interview with your customer are generally unstructured.

Explicit Customer Feedback

Feedback a customer directly provides the company is considered explicit feedback. For example, if a customer completes a survey and indicates they’re happy with your products or services, he’s providing explicit feedback.

Implicit Customer Feedback

Implicit feedback is often overlooked. It’s the messages customers give you based on their real-world behavior without necessarily knowing they’re telling you anything. For instance, 67 percent of customers say they’d consider leaving a review after a positive experience with a business, per Bright Local research. Yet, review analytics indicate only 34 percent of them actually do. Equally, a customer may tell your sales rep that they’re not interested in a specific product or service, thus providing explicit feedback. If you’re tracking analytics, you may see the same customer clicking on links about the product. They’re providing implicit feedback that they do have some level of interest. Gathering implicit feedback is helpful when there’s a mismatch or if you want to see if what customers tell you they think, feel, or do, is how they actually behave.

Top 9 Customer Feedback Benefits

Now that you have some background on the types of customer feedback available to your business, let’s dig into the benefits of gathering and using the data.

1. It Can Help You Understand Your Customers Better

The more data you gather, the better you’ll understand your clients. For instance, customer insights can tell you what motivates people to engage with you or to place an order.

2. Your Customers Will Feel Heard

Nearly two-thirds of customers say that businesses need to care more about them, per Qualtrics surveys. Providing them with a platform to provide their opinions is the first step in showing them that you’re listening and care.

3. Handling Reviews Effectively Increases Customer Satisfaction

More than half of all online reviewers expect a response from the brand within seven days of leaving a review per Social Media Today research. By meeting this expectation and addressing any issues revealed in the review, the business can turn a bad experience around and avoid future issues related to the same root cause.

4. You Can Boost Customer Loyalty and Retention

Nearly two-thirds of customers say they’d buy more if businesses treated them better, according to Qualtrics. Following up on feedback fulfills this need, which can contribute to greater loyalty and customer retention.

If you’re actively requesting insights from clients, you’ll also catch signs of disengagement before the client unsubscribes from mailings, deletes their account, or leaves your business. You can then take action to preserve the relationship and reduce churn.

5. Customer Reviews Can Help You Attract New Customers and Boost Sales

Reviews and a strong online reputation improve SEO, which helps your business appear in more online searches and appear closer to the top of the list. In this sense, they help your business be discovered more.

Research shows that a strong online reputation is often the primary factor when someone is deciding whether to reach out to a business too. In all, 98 percent of people read reviews for local businesses, and about half trust them as much as personal recommendations from friends and family, per Bright Local research.

6. Feedback Helps You Improve the Customer Experience

First, it’s important to note that just one in 26 unsatisfied customers will complain, per Huffington Post research. The other 25 will simply leave.  Furthermore, the average non-complainer will share their bad experience with 15 friends. Of those who do review, nearly three-quarters do so specifically because they want to help ensure others have a better experience, per Forbes.

Put that in perspective. The one person who does review represents dozens more who don’t express any concerns and they’re providing feedback because they want you to do better. If you handle the feedback with the care and consideration it deserves, you’re improving the customer experience for all the voices that remained silent.

And, if simply doing better isn’t enough to motivate you, it’s worth noting that 55 percent of customers are willing to pay more for a guaranteed good experience per Huffington Post. Your response directly impacts your bottom line.

7. You Can Gain Valuable Insight into Your Business Using Customer Surveys

One of the most popular surveys asks customers a single question: “How likely are you to recommend this product/ service/ company to a friend or associate?” Respondents are given a ten-point rating scale, with zero being not at all likely and ten being very likely.

This is the basis for a Net Promotor Score (NPS), and it’s often regarded as the best predictor of a company’s long-term growth. Even simple customer surveys such as this provide valuable insights that you can use to spot issues in the customer journey and make improvements that will benefit your business in the long run.

8. You Can Improve Your Products or Services

Real-life application often differs from what business owners envision before launch. Moreover, how people engage with your products and services may change over time. By listening to what your customers have to say, you can continuously improve your offerings to ensure you’re meeting demand. You may also get new ideas that, when implemented, will give your business a competitive advantage.

9. You Can Make More Informed Decisions

Let’s say that you want to expand your business, but you’re unsure if you should improve your core offering to attract more customers and boost retention or if you need to launch a new product to reach new markets. Your customers can shed insights into which path is best.

Or, let’s say that you know your customer experience is lacking. You have a limited budget and can only focus on one thing: the development of your product or hiring additional customer service representatives. Your customers can tell you which is more important to them. They may even tell you exactly what’s lacking in the experience. If it’s a small change with minimal investment, you may discover you can address both areas while staying within your budget.

The applications for informed decision-making are endless as long as you start with good data.

What Makes Customer Feedback Difficult?

With so many clear benefits of leveraging customer feedback, why aren’t more businesses using it to achieve their business objectives? Low adoption and effective usage rates typically come down to one of the following reasons.

The Customer Feedback Loop Must Be Closed

The customer feedback loop consists of four steps:

• Gather Data
• Segment Feedback
• Analyze Information
• Respond Appropriately

Many businesses gather data, but they don’t handle it properly once they have it and even fewer take action.

Improper Administration Can Make Analyzing Difficult

All too often, businesses start with the noble intention to gather feedback and respond to it, but they don’t have a specific goal in mind and don’t solicit the right type of feedback for their needs. For example, they may ask lots of open-ended questions, which is great for understanding concerns. However, it doesn’t necessarily tell the business what to focus on first, and manually culling through written responses is time-consuming.

To avoid this issue, businesses should keep the various types of customer feedback in mind and select the best format to begin with. Additional tools, such as keyword and sentiment analyzers, can also make it easier to assess data.

Inaccurate and Vague Customer Feedback May Diminish Results

Another key issue tied to improper administration is inaccurate or vague responses. For instance, if a question can be answered with “yes” or “no,” this is how most people will respond. Customer questions need to be framed in such a way that they’re easily and uniformly interpreted and encourage complete responses.

Some Customer Opinions May Be Biased

Both internal and external influences will impact how customers respond. For example, customers who read other reviews before responding may start to rethink how good their experience was. Even if something didn’t create major friction in their experience, hearing others recount a friction point may redirect their attention to that issue.

The way you frame customer questions makes a difference too. For instance, “Please rate our product” is not the same as “How satisfied are you with our product?” The latter is a leading question that assumes the customer is satisfied.

If steps aren’t taken to solicit feedback in a way that minimizes bias, any insights gained are questionable at best.

Customers Can Become Frustrated for Many Reasons

When customers are asked to provide feedback too often, providing feedback is time-intensive, or a survey doesn’t provide any insights as to how much is left to complete, customers may experience what’s known as “feedback fatigue.” You can often tell this is happening because customers stop providing helpful feedback, don’t answer questions fully, skip survey questions, or refuse to take surveys altogether. Keep requests to a minimum to avoid this.

Another major concern is that customers may still feel unheard after completing a survey. To avoid this, surveys can contain spaces for additional written feedback at the end, and businesses must be mindful of closing the feedback loop.

How to Ask for Customer Feedback

There is no singular best way to request customer feedback. What works for one business, audience, or concern may not work for another. Instead, follow some general guidelines to establish the best method for your situation.

Start with a Purpose or Goal

Your goal or purpose will be the basis for most decisions going forward. Consider whether you want to:

• Gauge Overall Sentiment
• Improve the Customer Experience
• Better Understand the Needs of Your Customers
• Eliminate Friction Points in the Sales or Onboarding Process
• Find Ways to Strengthen Customer Relationships and Loyalty
• Uncover Ways to Increase Sales
• Or Something Else

Choose a Method

Your goal will determine the best method for gathering feedback. For example, NPS can be used to get a general pulse check on the health of your business and relationships, but it’s not going to help if you’re deciding which product features people value most.

• Email Surveys
• SMS Surveys
• Social Media / Review Sites
• In-Product Surveys
• Website Pop-Ups
• In-App Surveys
• One-on-One Interviews
• Focus Groups
• Panel Research
• Operational Research (implicit feedback such as website analytics)

Decide on Questions

Ensure questions provide you with the data you require, be it qualitative, quantitative, or both, and take care to avoid biased questions.

Segment Your Audience

People may have drastically different opinions of your company or service based on the products they use, how long they’ve been a customer, how long it’s been since they last ordered, and other factors. While it’s generally best to ask related groups the same questions, it’s also helpful to ask qualifying questions or segment audiences in advance, so it’s easy to slice the data after.

Increase Buy-In

People with strong opinions about the company on either end of the spectrum are more likely to respond to your requests, but you’re going to want a balanced view. Give people a compelling reason to respond, such as a discount, small reward, or entry into a contest for a large prize.

Also, ensure you’re reaching out to people via their preferred method. Letters, email, SMS, website or app pop-ups, and more can all be effective channels.

Lastly, ensure people know what their commitment is in advance. You’ll get more responses if your call-to-action is “Take a 3-Minute Survey to Be Entered in a Drawing for a $100 Gift Card” compared to “Please Take a Quick Survey for a Chance to Win.”

How to Handle Positive and Negative Customer Feedback

Once the replies start rolling in, it’s important to follow up to close the feedback loop.

How to Handle Bad Customer Reviews

• Address the customer personally and thank them for their time.
• Apologize for the poor experience and empathize with the customer.
• Take responsibility for any issues that were within your control.
• Correct the issue and let the customer know that you’ve done so.
• Request another chance to provide them with a better experience in the future.

How to Handle Good Customer Feedback

• Address the customer personally and thank them for their time.
• If possible, reward the customer for providing their insights.
• Ask them to provide more feedback. For example, a customer who left positive remarks internally could be asked to leave an external review.
• Encourage them to follow through with secondary feedback if they don’t do it on their own right away.
• Offer them related services that they might find equally beneficial.
• Share positive customer feedback with your team. It’s fantastic for morale! You can also share testimonials on social media, your website, in emails, and across other marketing channels to build trust and increase sales.

Support Your Initiatives with Debt-Free Funding

Customer feedback initiatives can help you accelerate growth and build a stronger business. But, if cash flow issues prevent you from acting on the feedback, you might as well not be asking for it.

Invoice factoring provides immediate cash for your B2B invoices, so you’re not stuck waiting weeks or months for payment. The customer pays the balance when they pay their invoice. There’s no debt for you to pay back and you’re free to move forward. If this sounds like the solution your business needs, contact us for a complimentary rate quote.