Why you need customer feedback to boost your business

HRG Insights
Sep 18, 2017 · 6 min read

What is customer feedback?

Customer feedback refers to a consumer’s opinions about a business, product, and/or service. It encompasses their engagements with the brand, and even ideas to improve branding and customer experience.

According to Walker Information, customer experience will overtake price and product as the key brand differentiator. Thus, in order to adapt to customer’s expectations, companies must engage actively with customer, and gain and work based on their feedback.

Customer feedback in the digital era

Over the course of the last three decades, much has changed about how businesses interact with customers. With direct access to the internet, everyone has become a lot more connected; there is a direct line of communication between brands and their consumers. Customer feedback can be given on any platform at any point of time.

There are various ways to engage with a customer to gain their feedback. The most popular method, of course, are surveys, which can be done both online and offline. These make the customers feel like their voice is being heard, and that the brand values their business.

Yet another way are through reviews. Websites like Yelp and TripAdvisor allow customers to leave reviews about their experiences and recommendations of businesses. By taking into account both positive and negative reviews, businesses can retain good practices and improve on flaws pointed out by customers.

A large number of studies show that brands that put their customers’ needs first are the ones that achieve more customer loyalty and higher profits, as compared to those that don’t. Thus, it is important to stay on top of the game by obtaining and acting on as much customer feedback as you can, as even bad feedback will stay on the platform forever.

When it comes to negative reviews, it must be noted that only 4% of dissatisfied customers come forward (Understanding Customers, Ruby Newell-Legner). This means that if you aren’t getting a lot of negative reviews, it just means that you aren’t surveying enough people. And it’s dangerous because 91% of the remaining 96% unhappy customers are likely to not come back to your business.

Thus, it is vital for businesses to act on negative reviews immediately and resolve the problem, as about 70% of unhappy customers whose issues were resolved in their favor said they would return to purchase from that company again.

Thus, it is important to satisfy customers by following up with them regularly, and good feedback, too, will stay on the platform forever. According to research by Ernst & Young, 80% of consumers believe peer recommendations, but only 14% trust advertisements. As convenience and price are playing an increasingly large role in purchase decisions, it is possible to instantly compare prices through apps like Red Laser, which affect impulse buys. For a brand to get through to a customer, there needs to be a high degree of personalisation.

With the advent of new techniques of obtaining data, and the rise of behavioral sciences, technology and data are changing the way brands interact with consumers. Digital communication has also brought in an abundance in data. Through the integration and analysis of multiple data sets, and by using the right channels, brands can gain actionable insights and take strategic decisions to help their businesses grow.

Why is customer experience so important?

Customer experience refers to all interactions a customer has had with a brand. In order to give feedback, a customer relies on their experiences and interactions with a brand. Thus, in order to retain or gain customers, a brand needs to offer top-notch service.

  • Customer loyalty is a key point of differentiation from competition. Providing good consumer experience ensures that a consumer only wants to do business with your brand. Additionally, it also helps with customer referrals; a good customer is likely to discuss your brand in relation with the experience and service they were provided.
  • A consistent customer experience across all touchpoints, which meets the brand’s standards is bound to make customers happy. Focusing on customer satisfaction (which further leads to customer retention), not only leads to stronger customer relationships, but also leads to an increase in revenue and sales.
  • A satisfied customer is always willing to try new products/services offered by a brand that has provided them good experience. If this experience remains consistent, they are even likely to buy something expensive from the same brand, as it becomes a brand they trust.

Why do you need feedback?

Customer feedback helps you find out where you stand with regard to customer experience, and how you can improve on it. Additionally:

  • When giving feedback (surveys or review sites), customers provide information on specific product/service issues. By keeping these in mind, companies can improve upon their product and ensure that with such changes, new customers are gained.
  • As aforementioned, customer satisfaction plays a major role in customer experience and feedback. Feedback can give insight into how a brand can create a better customer experience. Additionally, customer satisfaction helps in customer retention. The probability of selling to a new customer is 5%-20%, while the chances of selling to an existing customer are 60%-70% (Marketing Metrics). Thus, if one can satisfy customers, the retained customers can help increase revenue. By taking feedback from customers, brands let customers know that their opinions are valued. By working on the points given by customers, brands ensure that their relationships with these customers gets stronger. The customer becomes an advocate for the brand, bringing in new customers, thus lowering the cost of new customer acquisition and increasing profitability.
  • Customer feedback is a form of market research, while provides tangible data. By analyzing the responses and reviews by customers, brands can identify common areas of satisfaction and improvement. Through this, they can keeps the areas of satisfaction consistent, and ensure their customers stay happy. By addressing the points of improvement as soon as possible, businesses can create a working plan for the future. Based on the working plan, said businesses can figure out which divisions of the company need more or less staff members, funding, and even create a strategy to improve employee morale.

Case Study: Apple

No company understands the importance of customer feedback more than Apple. Having ranked second in 24/7 Wall St.’s Customer Service Hall of Fame, 83% of those surveyed reported a positive customer experience with Apple.

Using NPS (Net Promoter Score), Apple follows up with customers who have bought their products or those that came into the store, and ask them for feedback about their experience. By analyzing the responses provided by customers, Apple follows up with those leaving negative reviews within 24 hours, and addresses their issues.

When Apple first started this process, they saw that some of the detractors they called actually started purchasing more products after the follow up, which led to additional sales of $25 million in the first year.

Thus, by analyzing their NPS surveys on a daily basis, Apple understands what its customers expect from the brand and tries to ensure they meet these expectations. This has led to Apple becoming the go-to choice of its customers and has helped bring in additional revenue, helping it become the tech giant it is today.


Customer feedback is an important part of any business. It gives a brand insight into the expectations of its customers, and ways to manage and improve on those expectations. It also provides the business on ways to improve the offered products and/or services, in order to provide a customer experience that brings in and retains happier customers.

When a brand does not take the consumer’s needs into account and only focuses on the numbers, it leads to outcomes that don’t work well with customer retention, satisfied customers who in turn bring new customers on board.

With decreasing attention spans, it is important to ask customers questions that are shorter but more engaging. Larger-than-life expectations, combined with the increasing use of online and mobile channels for interactions with other customers have made it very difficult for brands to provide a positive consumer experience successfully.

But, by reforming the programs and using tools like surveys and mystery shopping, brands can move forward and keep up with its customers. To that end, creating a comprehensive strategy by rethinking the way operations are done within the company may provide an end-to-end plan and operating model to achieve these goals.

Hope Research Group

Hope Research Group

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