No substitute to real-time meaningful feedback
A prompt response to surveys communicates the message that the firm really does care about the customer
If your inbox is like ours, it’s probably full of customer surveys—from airlines, hotels, online merchants, etc. Chances are you will never fill them out, and with good reason. They typically ask for a few minutes of your time but end up taking 15 to 20 minutes. Worse, you never get an acknowledgment beyond an automated thank you. You have no way of knowing whether the company actually read your survey, thought about the issues you raised and took action. Where’s the incentive to invest your time?
Contrast that all-too-typical experience with one that Raj had a while ago. As he was leaving a store of a leading Indian retailer without making a purchase, he was asked to fill out a survey on a tablet. The survey had just a few questions, including the ultimate one: Based on this experience, how likely would you be to recommend us to a friend or family? Raj keyed in the score he felt the company deserved at the time—five out of a possible 10.
The next day, Raj got a call from the retailer’s dedicated customer feedback team. The executive asked if he would spare a few minutes to discuss his feedback. Raj explained that he was looking for a specific blazer in size 44, but his size was not in stock at the store. He also said that the store staff searched for the blazer in other stores in the city, but couldn’t find a suitable one. The executive took down a few more details and promised that she would convey this to her merchandising team. Given the real-time nature of the communication between the customer feedback team and the merchandising team, the blazer was located in another city within 24 hours, and requisitioned. The team then updated the store manager, who let Raj know that the blazer would be with the store in two days and he could either pick it up at his convenience or have it shipped to him for free.
Look closely at what happened here. Raj’s response to the customer survey didn’t disappear into a black hole. Instead, an executive called back, understood his needs and addressed them quickly. Crucially, the retailer closed the loop, almost as if it was a reflex built into the organization. Closing the loop turned Raj into a far more satisfied customer and made him feel that the feedback was worth his time. Globally, leading companies such as Apple Inc. and Charles Schwab Corp. have built in velocity to contact every customer who gives them a negative rating or registers a complaint—within 24 hours. The prompt response communicates the message that the firm really does care about the customer.
But the effects of closing the loop don’t stop there. The retailer shares the feedback with other parts of the organization—sales, customer care, marketing, product development and operations. This provides immediate, compelling reasons for these employees to up their game and come up with innovations that will enable a superior customer experience. This helps the retailer learn faster than the competition, which translates into a competitive advantage.
Closing the loop with customers, as in the case of the retailer above, is a central element of the Net Promoter SystemSM. Net Promoter leaders close the loop with customers at three different levels—with frontline employees, mid-level managers and senior executives. In the case of frontline employees, sharing direct customer feedback can enable them to identify processes and policies they need to address as a group. For instance, in one of Allianz’s European health insurance operations, feedback suggested that unexplained delays were a big source of customers’ frustrations. So a group of reps and supervisors implemented a process solution, which led to a double-digit increase in the claims unit’s Net Promoter scores (NPS) and a significant rise in renewal rates.
Sharing customer feedback directly with mid-level managers can help avoid poor trade-offs. In the absence of a steady flow of feedback, they often tend to focus on departmental goals and shunt customer experience to the sideline. Take the case of Logitech International SA, the Switzerland-based computer accessories maker. Sharing customer feedback helped designers understand a couple of key drawbacks with the MX5000 keyboard: for one, customers found its LCD screen hard to read. Designers were able to address these in the next model.
It is also important for companies to close the loop directly at the senior executive level. This is particularly relevant today with markets and technologies changing faster than ever. With a better handle on the pulse of their customers, executives can make the right strategy and resource-allocation decisions and do this faster than competition. They adapt faster to an ever-changing market, taking advantage of granular learning from successes and failures at the frontline while competitors await their annual market research.
Closing the loop can help put in place a virtuous cycle of customer feedback and action. It not only lets your customers know that you have heard their feedback but also brings their voice inside the organization. Employees see and hear how they are creating or destroying loyalty and what they can do to improve matters. Positive feedback offers the satisfaction of a job well done while negative comments are a source of course corrections and incentives for improvement.
With so many benefits, why doesn’t every company gather customer feedback in this way? To be most useful, customer feedback should be both fast and granular. Ideally comments, reactions and scores should go directly to departments and individuals responsible for the products or services in question, and as frequently as possible. Gathering feedback in this manner is a big task. Companies such as Apple and Charles Schwab have invested substantial resources to create robust feedback mechanisms involving sophisticated IT systems and well-developed processes.
Many companies seem to decide that this investment isn’t worthwhile. In the meantime, however, they continue to clutter inboxes with surveys that are essentially worthless. In our view, it would be far better for them to spend the money to develop effective feedback systems and learn what their customers really want to tell them.
This is the fourth in a five-part series on customer loyalty and advocacy.
Dunigan O’Keeffe, a Bain partner based in Mumbai, leads the firm’s strategy practice in the Asia-Pacific. Prasanna Rajan is a manager in the same office and leads client projects in the region on customer strategy and marketing.
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