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Customer Experience

Closed-loop Feedback: A Comprehensive Guide

Nov 23, 2021

9 mins read

Manisha khandelwal

Closed-loop Feedback: A Comprehensive Guide

I recently bought a very expensive pair of Colorblind Glasses from Pilestone. But they didn’t work! I requested a refund but the app somehow created a replacement request. 

The glasses were picked up. But I didn’t receive any replacement or the money!

I reached out to customer care which I heard was very good. They asked me to wait for a week. After a week, they referred me to some other department. And a week after that, they said that the refund has been processed but it’s the bank’s fault!

I received the money after one call to the bank. But, I am NEVER going to buy from the Pilestone again.

Why?

  • I was unhappy with the way my case was handled.
  • I hate explaining the issue to multiple agents again and again.
  • The agents were untrained. They had no clue what they were supposed to do.
  • No one even made the effort to understand the root cause.
  • It seemed like I was talking to multiple teams from different companies. They kept on dodging my case.

And most importantly, they kept asking me for feedback after every call but no one really wanted to solve the problem!

This is what is wrong with most companies.

I am sure this must have happened with you as well!

They 

  • Either don’t really want to take the feedback.
  • Or don’t do anything with the feedback.

That’s where CLOSED-LOOP FEEDBACK comes in!

What does closed-loop feedback or closing the loop really mean?

Closed-loop feedback or closing the loop simply means taking an action on the customer feedback.

Your customers are talking to you. Taking their feedback is not enough. You need to listen to them to understand their problems thoroughly and do something about them.

closed-loop feedback meaning

But why should you close the feedback loop?

Did you know you get a higher satisfaction from the customers after you resolve their problems than if the failure had never happened?

This is called a Service Recovery Paradox.

And that’s why closing the loop is important.

  • It shows your customers that they are being listened to. And when they feel valued, your retention rate goes up!
  • It allows you to improve your services and products, boosting customer loyalty.
  • It helps you identify the gap or improvements in your product, service, or the CX program.
  • It eventually improves your response rate when the customers feel that their feedback is taken into consideration.

Closed-loop feedback basically helps you identify the gap between customer experience and customer expectations.

Now that you know why we should do it, let’s talk about the how.

How to Close the Loop?

There are three simple steps to close the loop.

Everything to Know About the Closed-Loop Feedback

  1. Listen and understand the customer issues and gather all their feedback on a common platform.
  2. Instantly reach out to the detractors and deep dive into their problems.
  3. Identify and prioritize common customer issues that are causing the most friction.
  4. Share the feedback with the relevant team, brainstorm ideas, and take the required action.
  5. Communicate with the customer about the actions taken.

Types of Closed-Loop Feedback

There are two types of closed-loop feedback.

  1. Inner Loop
  2. Outer Loop

types of closed-loop feedback

Inner Customer Feedback Loop

In the Inner Loop, after receiving negative feedback, the agent or their lead can provide immediate resolution of the particular customer issue.

Scenario:

A customer was trying to generate a refund request but failed. When the feedback form poped they shared their frustration.

After reading the feedback, the product manager instantly called the customer and listened to the issue patiently, generated the refund from their end, and apologized.

And they analyzed if other customers are facing the same issue and informed this glitch to the tech team.

This is called the Inner Customer Feedback Loop.

Why is  Inner Customer Feedback Loop important?

  • It promotes individual employees’ and teams’ learning.
  • It provides autonomy to every employee to make their decisions.
  • It makes the employee feel they are closer to the customer and the company trusts them to take the right decision for the customers.
  • It boosts customer engagement and morale.
  • It results in a happier customer.

Best Practices that make the Inner Customer Feedback Loop successful

    1. Assign ownership to the department heads for whom the feedback is coming.
    2. Instantly share the feedback with Slack or email alerts (or use a feedback platform).
    3. Start with calling people the detractors (and set up an SLA like 48-72 hours for calling them.)
    4. Share positive feedback with every team member to get them motivated ( Everyone loves positive news)
    5. Record everything that has been said. Discuss it in a weekly or monthly meeting and prioritize them for the resolutions.

Key Points to remember!

  • Instantly share the feedback with the team responsible.
  • Coach employees regularly on how to close the inner loop.
  • Define SLAs like 48-72 hours for calling a detractor.
  • Appoint owners of touchpoint responsible for their team to make follow-up calls.

If the head of the department of touchpoint owners cant take an action on the customer issues then inform the customer about it. Be transparent. 

Who should own the Inner Customer Feedback Loop?

  1. Service Team: If the feedback is about the service, agents themselves, or their manager.
  2. Product Team: If feedback is about the product, product managers/UX designers.
  3. CX Team: They are looped in on all kinds of customer issues.
  4. Senior Management: They know all kinds of customer issues and how we are responding to them.

It should be owned by the owner of that department/touchpoint and their teams.

That’s all about the Inner Customer Feedback Loop. But what happens when the agent can’t resolve the customer’s issues on their own? 

That’s where the outer customer feedback loop comes in.

Outer Customer Feedback Loop

When the customer issues require structural improvements, they are escalated to the concerned departments and need approvals from Department heads or even C-suite. That’s Outer Loop.

Scenario

If the refund process is taking too long, then it requires technical changes on the backend.

That is resolved in the Outer Customer Feedback Loop.

While in the Inner Loop all the involved individuals receive the customer feedback and act on it instantly, the Outer Loop is different.  

  • It entertains complex issues that your agents/teams can’t resolve on their own. 
  • It includes issues that require system changes, policy updates, process improvements, pricing, product features, etc. in line with customer expectations.
  • These kinds of issues often escalated across departments, involving senior management and huge investments. 

Why is the Outer Customer Feedback Loop important?

  • It prioritizes changes that employees and teams can’t make on their own.
  • It gives voice to the employees. They communicate customer issues with the management. This drives a cultural change in the organization.
  • The employees feel valued and more involved with their work, it feels they have a purpose.
  • The customers start believing that the organization is truly customer-centric.

Best Practices that make the Outer Customer Feedback Loop successful

  • Gather feedback from the following sources.
  • All the customer data from surveys and inner loop.
  • Common customer complaints raised by the support team.
  • Voice of front-line employees.
  • Find common themes from all this feedback and share them across the departments responsible for taking action on it.
  • Prioritize actions of improvement with the respective teams by answering the following questions.
  • What will be the initiative’s impact on the customers and business?
  • How much effort will be required to implement the initiative? 
  • Create action plans. 
  • Communicate with both the employees and customers.

For instance, Olay has been sharing personalized newsletters to customers who reported issues while opening its cap!

example for the outer feedback loop

Key Points to remember!

  • It requires significant investment. 
  • It typically demands both detailed analysis and a decision to invest resources.
  • It almost always cuts across functions.
  • It identifies, prioritizes, allocates resources, and manages customer-friendly changes.
  • It requires Project Managers to share reports about the progress of improvements with all the teams involved. 

Moreover, one of the most asked questions is what is the difference between closing the loop in B2B and B2C. So, let’s dive into that!

Black Friday Sale - CX Tool

Difference between closed-loop feedback in B2B and B2C

In B2B, product managers to customer success professionals call customers to understand the issues they are facing

They identify the bugs or feature requests for the product improvement and add them to the product roadmap.

However, in B2C, reaching out to the customers is a bit difficult due to the large volume of feedback.

So, here’s what you can do!

How to close the feedback loop in B2C?

  1. Gather all the open-ended customer feedback from all channels.
  2. Identify the common problems with the most negative sentiment or low CSAT/NPS scores
  3. Call 5-10 customers who talked about those trending themes to understand the root cause of it.
  4. Generate ideas, prioritize, and create action plans with your team.
  5. Let your customers know that you’ve listened to them and you are going to take action on it.

Here’s Tanuj Diwan, Co-Founder and Head of Product at SurveySensum talk about it with Aileen Day, CX Thought Leader and Founder of Meraki Solutions in the podcast – Feedback Basics.

Let’s discuss this in detail in our next blog → How to close the loop in B2B and B2C?

In the end, don’t forget that the only point of taking the feedback is if you make use of it.

So listen to your customers, understand their issues, and act on their feedback. 

 

  • Customers talk about their good brand experience to an average of 9 people. But, they talk to 16 people about a bad experience with the brand. – American Marketing Associates
  • It takes 12 good (positive) experiences to make up for 1 negative experience. – Ruby N

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