What is a feedback loop? How to harness insights from customers and employees

Positive experiences with your company lead to happier employees and satisfied customers. But how do you improve these experiences if you don’t know how your audience truly feels? 

Collecting customer and employee feedback can give you a clear pathway toward improvement. A continuous feedback loop will provide data, insight, and objectives that you can use to streamline customer and employee experiences.

As you respond to feedback and take action, you’ll deliver winning customer experiences (CX) and repeatedly demonstrate to your employees why your business is a great place to work.

A feedback loop is the process of getting feedback, responding to that feedback, putting it to use, and getting feedback again. This circular process turns input (feedback) into output (actions and further feedback) for your business. As a loop, the changes you make based on feedback will likely inspire new feedback in the future.

Feedback can be a powerful tool that allows you to identify problems with your business and remedy them. For example, the bus transportation company Greyhound received feedback that customers were dissatisfied with the restrooms at one station. Yet, regular checks revealed that all bathrooms were clean. 

By diving into the data, Greyhound uncovered that the women’s bathroom was being closed for cleaning for 45 minutes during the busiest part of the day. Reading and responding to feedback allowed Greyhound to act, radically increasing customer satisfaction. 

Feedback can be positive in the form of compliments or negative in the form of critiques. Regardless of the sentiment of the feedback, you should always aim to close the loop. Listening to your customers, acknowledging their opinions, and communicating the actions you’ll take based on their feedback helps demonstrate that customer feedback is important to you. 

Equally, after implementing a change, remember to clearly communicate the steps you’ve taken to your audience to show you’ve done what you promised.

You can find feedback loops in every area of a business. From creating a better environment for employees to building better services for customers, feedback loops are a useful strategy.

Feedback loops come in many different formats. What sets them apart is who is providing the feedback and what changes you’ll make based on that feedback. 

Here are some common types of feedback loops in business environments.

The customer feedback loop is a strategy that customer experience teams use to improve your business's services, products, and experiences. This type of feedback loop involves regularly collecting customer feedback and enhancing your company based on those suggestions.

It’s important to collect feedback regularly when creating effective customer feedback loops. Frequently engaging with your customers can give your business a clearer understanding of how they feel about their journey with your company. By using customer feedback loops to act upon feedback, your organization can:

How to collect feedback for a customer feedback loop

To create a customer feedback loop, your business first needs to collect customer data. Three leading ways of collecting customer feedback are focus groups, market research, and of course surveys.

Focus groups bring together people who represent your target market for a discussion about your product or customer journey. This approach allows moderators to have a more personal discussion with respondents, allowing them to gain feedback in real-time and monitor customer sentiment through conversation.

Market research pulls from public data and industry insights to trace consumer behavior. You can also conduct internal customer research by using surveys.

Here are some examples of surveys you can use in the customer feedback loop:

These customer experience surveys comprise the pillars of a successful Voice of the Customer (VoC) program. 

Collecting data from customer surveys, focus groups, and market research will give you the input you need to begin a successful customer feedback loop.

An employee feedback loop is a strategy that businesses can use to streamline and improve the employee experience. Satisfied employees are typically more productive and experience fewer turnovers will stay with your company for longer. You can use employee feedback to find improvements your workforce wants to see internally.

There are numerous benefits of using an employee feedback loop:

Just like in the customer feedback loop, surveys are a great way of getting employee feedback. Particularly, employee Net Promoter Score® (eNPS) surveys measures how your employees feel about working at your company. They give insight into the overall satisfaction and loyalty employees feel.

The eNPS will help your business identify areas where you could improve the employee experience and make your workforce happier.

Related: Winning strategies to attract, engage, and retain talent using surveys

A feedback loop is inherently cyclical, relying on the continuous exchange of feedback and acknowledgment from customers and businesses. Just receiving feedback isn’t enough. It’s equally important to follow up on this feedback by outlining the actions you’ll take based on your customers’ comments. 

Responding to feedback demonstrates to those who provide feedback that their input is valued and actively used in your business. Acknowledging these comments help inspire customers to leave more feedback. Equally, the changes you make to your products or services based on feedback will generate further changes that your customers can comment on in the future. 

Feedback leads to feedback, which leads to more feedback. But only when you close the loop! 

Here are some of the benefits of closing the feedback loop.

Closing the feedback loops allows you to establish a trusting relationship between your company and your customers. When someone gives you feedback, leaving the loop open can lead to uncertainty on their part. They don’t know if you’ve seen the feedback, let alone have taken actions based on it.

Closing the feedback loop by sending out steps that your company will take or insights into the data will help show your audience that their opinions are important. Over time, constantly responding to feedback and implementing action plans to improve your problem areas will help build trust in your business.

Closing the feedback loop shows a great deal of responsiveness. Responding to comments and taking actions that prove you’re listening to feedback shows employees and customers you’re committed to improving.

Responding to the feedback loop can also help to differentiate you from your competitors. While most companies will ask for employee and customer feedback, a much smaller percentage will actionably use this data to bring about change. 

By closing the feedback loop consistently, your brand will seem reliable, credible, and customer-focused. It can also provide the evidence employees need to feel supported and inspired at your company.

Over 52% of customer experience professionals want more investment in customer feedback programs. This is hardly surprising, considering customer feedback loops can be a powerful tool to improve customer satisfaction. 

Your business can take a holistic approach by soliciting feedback across various points in the customer journey. Improving each area over time streamlines the customer experience and boosts satisfaction rates. 

Source: The state of CX: Emerging trends, challenges, and opportunities

Customers aren’t the only ones who benefit from closing the feedback loop.

Internally, demonstrating that your company is taking action to improve the employee experience can greatly boost employee satisfaction. When your workforce feels you have their best interests at heart, they’ll engage more with their work. Employee engagement can lead to a range of benefits, like improved productivity and efficiency, so this is a win-win for everyone.

Additionally, happier employees lead to happier customers, so everyone wins when you close the feedback loop.

How you close the feedback loop will change depending on the kind of feedback you receive. You’ll send a different response to a customer that’s extremely pleased with your services to one that detailed a problem you need to solve.

Let’s explore how to close the feedback loop depending on the feedback context.

Customers or employees that leave positive feedback will likely feel pleased to hear from you. Responding to them will serve to increase their satisfaction with your company. These conversations are some of the easiest, as you’re entering the discussion with both parties feeling positive.

When closing the loop on positive feedback, you can ask them to take their feedback even further. For example, you can give clear instructions about how to recommend your business to a friend. Alternatively, you could ask them to write up a review of their experience with your business that you can use as a case study.

Use personalization where you can when responding to feedback. Addressing your customer or employee by name and touching on details they included in their comments will help show them you’ve been listening.

Here is an example of how you could respond to positive feedback:

"Hey {Name}!
I’m X from Company Y. Thanks for taking the time to give feedback on your customer experience. We’re happy to hear that you found the customer support welcoming and friendly. Did you know you can get an additional 3 months of service for free when you recommend us to a friend? If there’s anything we can do to help improve your experience, don’t hesitate to reach out!"

Neutral feedback doesn’t show your company in the best light, but it also doesn’t find any fault with the experience you offer. For customers who find themselves in this neutral ground, you have the opportunity to brighten their experience and win their loyalty.

If the customer’s feedback includes areas that you can improve upon, your best course of action is to reply to them and show you’re implementing changes based on their feedback. A response acknowledging their issue and outlining the steps you’re taking to remedy it will help boost customer satisfaction.

Where possible, try to gather more information from your customers. Especially if they haven’t left a clear recommendation for improvement, you can use the following message to follow up on neutral feedback:

"Hello {Name}.
I’m from Company X, and I just read through your recent feedback on your experience with our business. Thank you so much for taking time to leave feedback! Are there any areas we could improve on to help make your experience with us even better? We’d love to hear from you again. Thanks!

Negative feedback is the type of response that is most delicate to respond to. However, this form of feedback also gives you the biggest opportunity possible to wow your audience and convert someone into a fan of your brand. 

When closing the loop on negative feedback, you should acknowledge their experience, ask for more details, and be candid. If you can’t implement an instant solution to resolve their frustration, at least demonstrate how your business is working to provide a remedy over the coming months.

Where possible, focus on solutions and getting more details. Here’s an example of a response you can use to respond to negative feedback:

"Hi {Name}.
I’m X from Company Y. I’ve read your recent feedback on our pricing. We take your concern seriously, and while we believe our billing structure reflects the quality of our services, we understand that these prices aren't right for everyone. I’m happy to let you know that we’re introducing a more economical pricing band this summer. Until then, here’s a coupon that will give you a month’s trial of our product. Please let us know if there’s anything we can do to improve your experience!"

Feedback loops are an invaluable way of improving employee and customer experiences. Collecting feedback, turning it into actionable steps toward improvement, and then explaining those actions to your audience will win their favor, improve satisfaction rates, and supercharge your CX and EX programs. 

Find out more about customer and employee feedback with SurveyMonkey. 

Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.