What is closed-loop feedback?
Put simply, “closed-loop” customer experience is when you are able to respond directly to customer feedback.
Closed-loop feedback, or closing the loop, is the practice of following up with customers who have fed back to you. Rather than just treating feedback as useful data, companies who practice closed-loop feedback see it as the start of a conversation with the customer that can yield further benefits for both sides.
Instead of just collecting feedback, you’re acting on it.
The goal of closing the loop is to provide a positive customer experience, whether that means resolving a problem effectively, acknowledging praise or suggestions, or answering a customer’s questions. It’s an opportunity to demonstrate to your customer in a direct and personal way that their feedback is important and you care about the outcome.
Closed-loop feedback isn’t just about preventing unhappy customers from becoming detractors – it’s equally useful to follow up with neutral customers and turn them into promoters. Some businesses use closed-loop to follow up with promoters too, motivating happy customers and inviting them to share the product or service with a friend or join a customer advocacy program.
Learn more about Qualtrics closed-loop feedback system tool
Why use closed-loop feedback?
Closed-loop feedback has been generating the interest of marketers and customer service professionals, since it delivers some significant benefits both long- and short-term.
Better customer relationships
While an unhappy customer might start to ring alarm bells, the most successful companies see it as an opportunity to resolve the complaint and keep the customer loyal. Customer loyalty is valuable, since it builds not only the customer lifetime value, but your brand equity.
In fact, 70% of consumers said they would be more likely to do business with an organisation again if their complaint was handled well the first time. Customers who feel heard and know that you will take action on their behalf are more likely to be loyal, because they feel recognised and valued.
Better employee experiences
When you give front-line employees the power to resolve customer queries and take action on a customer’s behalf, they’re likely to feel happier at work and more satisfied with what they can achieve. As your brand loyalty increases, they’ll interact with more and more happy and trusting customers.
Closed-loop feedback can also provide opportunities for employees to learn and improve. Cases that come to light in closed-loop systems can be used as a basis for training and best practice development, showing by example how to deliver great customer experiences.
Better revenue
Strong customer relationships and positive customer emotions translate into healthier revenues. When customers feel appreciated, they are willing to pay up to 16% more for products and services, according to research from PwC.
Get more experience data in the future
When your customers know that you prioritise listening to feedback and acting on it, they’re more likely to offer it to you in the future. With more feedback data from your customers, you’re better able to build a great customer experience program.
How to build a closed-loop system
To do closed-loop feedback well, you need to prioritise collecting customer feedback. This could be via surveys, intercepts or contextual feedback modules like buttons that you provide on your sites and apps, or by listening to feedback that customers provide spontaneously, like reviews and ratings (your own or on third-party platforms) social media comments or conversations with your contact centre.
You also need a platform that supports and enables closed-loop feedback. As well as baseline CRM functions, you need the ability to identify and track follow-up conversations and link the right people to the right cases at the right time. A ticketing system is often the best choice.
How do you close the loop?
To do closed-loop feedback effectively, you need to be:
- Timely – you need to act on the feedback shortly after it’s provided, taking the customer’s cue and picking up the dialogue. Delay, and your response may seem irrelevant, odd or confusing.
- Accurate – you must have a clear, specific idea about the customer’s relationship with you to date and the events that led to their feedback. If you misunderstand what’s happened or offer the wrong kind of follow-up that doesn’t connect with their experience, you’re unlikely to enhance the relationship.
- Proportionate – different customers will have different needs. Tailor your response depending on the size of the purchase, the nature of the customer relationship to date and how the interaction leading to the feedback played out.
What to look for in a closed-loop tool
To help you respond quickly, accurately and proportionately, a closed-loop system requires a few essential components:
- Ticketing – This is the alert system that immediately and automatically flags negative responses and raises a request in your system, letting your team know that you have an unhappy customer. You should be able to set up the thresholds, such as a negative or neutral NPS score, so you control what types of comments are fed into your closed-loop system.
- Case management system – this allows you to track the ticket all the way through to resolution and should allow you to assign tickets to the right team members and to monitor progress of each one. The best systems also allow you to set and track targets – for example, you may set a target requiring 85% of all complaints to be resolved within 24 hours – so you always know how your customer service team is performing.
- Integration – The most useful system will allow you to catch and act on negative experiences wherever and whenever feedback is generated by the customer. That means good integration – across your CRM system, contact centre tools and CX management program, and across the listening posts and feedback systems you have in place, including third-party sites and apps.
Learn more about Qualtrics closed-loop feedback system tool
Integrating your closed-loop process in your CX program
In order to run closed-loop effectively, it needs to be fully integrated with the rest of your program – which usually means it’s run on the same software platform as your feedback and analysis or it’s set up so you can easily transfer data back and forth between the two.
Having a single integrated system allows you to set up automated alerts and actions that carry information through to wherever it’s needed. So when a customer gives a negative score for something – say, for example, they rated you ‘6’ on your NPS survey – your system automatically creates a ticket requesting follow up.
A deeply integrated program also allows you to delve deeper into a customer’s problem and perform root cause analysis or spot trends in your customer feedback, looking at feedback data in context with the rest of your experience management program.
For example, you might see that a particular demographic or location is consistently triggering a ticket. You can then dive into your data to find out why, helping to solve the problem and reduce the load on your customer service team.
Going beyond your CX program
If your organisation is using a CRM system, it’s a good idea to link it to your case management system too. This can usually be done through an API to pass data back and forth between platforms.
By integrating with your CRM, you can make sure your people have all the relevant information at hand at the right time. So when you’re resolving a complaint, customer service agents have all the background information on the customer. And when a member of your team next contacts that customer, they can access information about the previous complaint too.
Start closing the loop
You can follow up on feedback and turn detractors into promoters with automated ticketing, tracking and case management with Customer XM. Built on a single, powerful collection, analysis and action platform, it allows you to address issues quickly to improve the experience for your customers. With integrations into Salesforce, Marketo, Tableau, and many more, it gives you a single view of your customers to make case management simple and effective.
Original Research: Understand the ROI of customer experience in 2021