5 Reasons "Closing the Loop" on Customer Feedback is Hard to do

In practice, it turns out that "closing the loop" with customers who provide feedback is often a challenge.


In this post, we hope to provide some insights on why.

Some data from our recent survey:
87% of respondents chose "customer loyalty /satisfaction" as the #1 (75%) or #2 (12%) priority for their customer feedback.

• 74% say "closing the loop" is "Critical" or "Important" for their business' success.
• 54% rank "prioritizing customer feedback for follow-up action" as their Top or 2nd biggest challenge with respect to "closing the loop" with customers.
• 44% rank "determining the appropriate type of follow-up to provide" as their Top or 2nd biggest challenge with respect to "closing the loop" with customers.

Clearly, survey respondents believe their customer relationships are key to being successful. Yet, they often report struggling with using customer feedback to generate relationship improving actions. We think there are several reasons for this, some which are institutional and some more practical. Our thoughts follow.
5 Reasons "Closing the Customer Feedback Loop" is a challenge.
Five contributors to customer feedback not being employed optimally for improving customer relationships.

• Corporate hierarchies. Known as inhibitors of information exchange. Information flows up the hierarchy from analyst to manager to executives. When it flows back down the hierarchy, it's usually in summary form and attached to some new Standard Operating Procedure. Hierarchies tend to remove the individual, actionable, components of customer feedback. And they also add a timing element the process that inhibits relationship improving action taking. It takes time for information to flow up and down the hierarchy, which often delays or makes irrelevant subsequent actions.
• No centralized "Ownership" for customers. Enterprises often organize around functions like accounting, marketing or operations. Customer feedback collected by these business functions tends to be "silo-serving" and not necessarily about the broader enterprise need to holistically understand the customer relationship. Information collected within silos often stays there, or is presented in such a way as to make it difficult to interpret and act on outside the silo.
• Out of context data. For example, many enterprises - and especially those with automated CRM platforms - collect much of their customer feedback based on transactional surveys. To conserve resources they try to measure customer relationship quality using the same survey and process. Data collected in this way is often biased by the transaction. Even worse, "ownership" for action is often unclear when the feedback is not about a transaction. Out of context data is also a characteristic of silo based customer feedback.
• Customer survey processes and platforms that are not designed for "loop closing". Many organizations use web-based survey tools that are not designed to enable "loop closing" and when deployed make it needlessly challenging. These tools often lack embedded analytics, mechanisms to identify customers, necessary workflow automation, etc.
• Management practices. Perhaps the biggest challenge of all. Most organizations don't currently align management incentives with customer relationship quality. Therefore customer relationship is always subordinate to other operational metrics, as well as typically being "someone else's" problem.

What you can do to implement "Closed Loop" Customer Feedback processes:
Some of our thoughts....

1. Be sure to look at customer relationship in a broad context.
2. Establish executive ownership for the customer relationship.
3. Choose a customer relationship metric like: Loyalty, Satisfaction, etc.
4. When designing your customer surveys, plan for "loop closing" based on combinations of response and customer profile attributes.
5. When planning for loop closing activities - determine internal ownership for the various types of loop closing activities that you will undertake.
6. Use a survey platform that enables and facilitates the necessary analytics and workflow your loop closing activities will require.

Many firms need help establishing a "Closed Loop" Customer Feedback process. It's what we do at QuestBack, so if you'd like help please call us.

"Closing-the-loop": Critical for Success, but hard to do

Closing-the-loop on customer feedback is considered "Critical for Success" by many people in customer facing roles. Yet, in practice it seems to be difficult to do effectively and consistently.

A couple of statistics from our recent survey:

• 87% of our respondents chose a relationship metric - "customer loyalty/satisfaction" as the #1 (75%) or #2 (12%) priority for their customer feedback.
• 74% say "closing the loop" is "Critical" or "Important" for their business' success
• 16% say they "always" close-the-loop on relationship feedback

Organizations seem to be particularly challenged with "closing-the-loop" effectively on relationship feedback. We think process issues are inhibiting effective follow-up on feedback and we infer from the data that two process issues are contributing factors:

- Connecting customer feedback with other customer data: i.e. Profile data, Customer value information and "Responsible internal actor" information.
- Determining an action to be taken on customer feedback, then routing the feedback data to the "Responsible internal actor" for action.

When we examined these issues some thoughts occurred to us about why they might occur:

• Many businesses collect customer feedback centrally via one or two internal departments, very often product marketing or customer support. But, "loop-closing" activities must be performed by other departments (Sales, Marketing, Shipping, Accounting, Etc.).
• Often, data collected is not designed to facilitate a "closed loop" process (i.e. market research), may have a very specific type of "loop-closing" process attached (closing a support case, for instance) or requires a decision from another department prior to loop-closing actions taking place.
• Relationship feedback in particular seems to suffer from these challenges, as its a simple matter to insert a satisfaction or loyalty question into a multitude of surveys. But, based on the feedback provided, complex to "close-the-loop".

In our opinion, solving these "Loop Closing" issues begins with a better planning process. When feedback is solicited a process with ownership for follow-up should be defined for each key piece of feedback collected. And, mechanisms should be employed that facilitate getting feedback data to the correct internal actors in a timely fashion. This is especially important in the case of relationship feedback, where "Closing-the-loop" is often not only respectful, but is a known driver of higher customer loyalty.