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Reactive to Proactive: How to Create a Customer Feedback Loop

Published On
February 28, 2023
Read Time
Jay Magdani

As a SaaS (Software as a Service) business owner, gathering customer feedback is crucial to your company's success. It allows you to identify areas for improvement and make necessary changes to your product. Because without genuine feedback, you can’t honestly know if you’re building the right product.

Yet, gathering feedback while building and launching a SaaS product can often be challenging. Here's how you can create a customer feedback loop that is not just a one-way conversation.

The Circuitous Route of a feedback loop

5 Best Practices for Creating a Customer Feedback Loop 

73% of customers abandon a brand after 3 negative experiences. A strong feedback loop nips issues in the bud, helping retain customers.  

Here are a few aspects you must note before creating an effective customer feedback loop: 

1. Identify Your Target Audience

Before gathering feedback, it's essential to understand your target audience by considering factors such as demographics, pain points, and goals. It will help you tailor the feedback questions and channels to the needs and preferences of your customers. 

2. Set Up a Feedback System 

There are multiple ways to gather customer feedback. For example: 

  • Interviews, on-page pop-ups, and surveys collect solicited feedback
  • Reviews, live chat, comments and product mentions on social media offer unsolicited feedback
  • Monitoring customer actions and interactions with the product help gather observed feedback.

Choose the channels that align with your goals and make it easy for your customers to share their thoughts. For example, a survey is the most efficient method to gather feedback on a new feature quickly. In contrast, a focus group is more suitable for better understanding customer needs and preferences. 

3. Engage Your Early Adopters

Your early adopters are a valuable source of feedback and can help you shape the direction of your product. Make an effort to engage with them regularly and encourage them to share their thoughts and ideas through one-on-one interviews, focus groups, or user testing sessions.

4. Bring In Power Users

Most customers who jump ship to another product pick “satisfied” or “very satisfied” in surveys not long before defecting. A way to head off such instances is to involve your frontline in the feedback loop, so they can understand in detail what matters to customers and then deliver it. Another option is to solicit input from power users to shed light on critical issues. 

5. Integrate Feedback into Development 

The route to delighting customers is circuitous. So, once you have gathered feedback, it's essential to act on it. Assign team members to review the feedback regularly to identify patterns or trends. Share the results with the relevant teams and develop action plans to address the issues raised. Decide which feedback to prioritise, starting with the most pressing issues, and incorporate it into your development roadmap.

Although not a SaaS company, Coca-Cola is a perfect real-life example of integrating customer feedback

In April 1985, the brand decided to change the formula of its signature drink. It spawned anger like no other, bombarding the beverage brand with letters and phone calls voicing outrage. Coca-Cola acted on this loud volume of feedback and backtracked, reintroducing the original formula in July of the same year. 

Another example of closing the loop on customer feedback is Dell’s IdeaStorm

Back in the early 2000s, the tech giant faced a lot of backlash from dissatisfied customers. So, it launched a whole website dedicated to reviews in 2007. The responses that received the most attention were then prioritised.

In 2012, it revamped the site to close feedback loops faster.

3 Key Stages in Customer Feedback Loop

1. Communicate With Your Customers

The first crucial step in creating a feedback loop is acknowledging and responding to your customers. It's essential to keep them informed of your changes based on their appraisal and let them know how it benefits them. 

For instance, if a customer is frustrated with using the platform, email them a list of changes and features being introduced to address the issue. 

Or, if a customer feels undervalued, take it as an opportunity to offer a loyalty reward. Don’t just say that you are listening and that their feedback is valuable; show them because that is how you build trust and loyalty. 

2. Measure The Success 

Creating a customer feedback loop is continuously monitoring if it is working. Set up metrics to measure the impact of the changes you've made to the product based on customer feedback. 

This could include increased customer satisfaction, a reduced churn rate, increased sales, or even sentiment analysis to capture positive, negative, or neutral opinions. For example

  • To measure satisfaction for in-product experiences, use a Customer Satisfaction Score (CSAT) survey.
  • A Net Promoter Score (NPS) survey is the right choice to measure customers' loyalty to your product.
  • To understand how easy your product is to use, utilise a Customer Effort Score (CES) survey.

3. Continuously Gather Feedback

A customer feedback loop is not a one-time thing. It has to be an ongoing process allowing you to improve your product continually. Set aside time and resources to continuously and seamlessly collect and analyse feedback.

If you cannot afford a dedicated team, look for an automated solution. Many platforms effectively collect feedback in one place and allow direct customer communication.

Key Takeaways

Low adoption and high churn are good signals of product issues. Nevertheless, they don’t paint a complete picture because the reason why customers leave remains shrouded in mystery. This is why creating a customer feedback loop is crucial for any SaaS business. It equips you to develop a product that meets the evolving needs of its customers and stays competitive.

At Scalix, we help founders get reliable access to critical components like community, capital, customers, and convenience to build sustainable and scalable businesses. 

If you’re a new startup struggling to incorporate a customer feedback loop into your product, contact us today!