What is Closed-Loop Customer Experience Management?

What you are about to read will likely see you respond in one of two ways – shaking your head at the folly of some companies or cringing at the realisation that your own business may be just like them. You see, research and advisory group Gartner conducted a study of what companies do when they receive customer feedback and what it discovered is both heartening and heartbreaking.
Probe Blog | What is Closed-Loop Customer Experience Management?

The heartening aspect was the number of organisations that collect feedback, with 95% of companies taking the time to ask customers what they think of their service. Unfortunately, that is where the positive news ended because the subsequent results of the survey highlighted how few companies took the next step of using that feedback to their best advantage. The study found:

  • Only 45% alerted their staff to the findings
  • Only 35% made decisions using the insights
  • Only 10% deployed and improved processes on the basis of the findings and
  • A mere 5% informed customers of the changes they had made.

In a world where 93% of people are more likely to be repeat customers at companies with excellent customer service, it beggars belief that so few organisations are taking full advantage of what their customers are telling them. Feedback is nothing without action and the question you should be asking yourself right now is simple – are we closing the loop when we receive feedback?

What is Closed-Loop Customer Experience?

The Customer Experience (CX) age has well and truly arrived, with research showing that a positive CX has replaced price and product as the main brand differentiator for the modern consumer. From inspiring people to recommend a product or service to others or make another purchase themselves, positive customer experiences are game-changers for businesses and the need to create more of them should be a priority for all executives.

And so we come to the importance of closing the loop.

Closed-loop CX is all about responding to customer feedback in a bid to further understand and elevate their experiences and obtain insights to inform your own long-term customer experience strategies. While no one enjoys receiving negative feedback from customers, truly successful companies are those that see it as an opportunity. If a complaint is handled well the first time, consumers are more likely to do business with an organisation again. It shows them that their feedback is not only valued but the company cares about their experience.

Closed-loop CX is also not only about negative feedback. It is equally important to respond to neutral and positive customers as they are the most likely to become brand promoters who will share the product or service with their peers or join customer loyalty programs. The key is customer experience does not start and stop with receiving feedback but is an ongoing process that requires dedicated focus.

Why Closed-Loop CX Matters

Closing the loop on customer feedback is crucial for a variety of reasons including:

  • Financial Benefits: with PWC finding that 32% of customers stop doing business with a brand they love after one bad experience, failing to address consumer concerns can be a costly exercise. It is impossible to guarantee every customer experience will be overwhelmingly positive but one thing every company can control is how they respond to negative feedback. Closing the loop on feedback can identify why a poor experience has unfolded and allow staff to address the concerns so they do not occur again. With an Accenture Strategy study revealing US brands lose about $1.6 trillion every year due to poor customer service, every effort needs to be made to turn negatives into positives.
  • Customer Relations: responding to customer feedback is simply the right thing to do. Closing the loop is a key step to making customers feel valued. Whether sharing unprompted feedback or responding to a survey request, they have taken the time to let you know about their experiences and the least you can do in return is let them know their opinion matters. Doing so also allows your company to stand out from the crowd. With organisations overwhelmingly failing to close the loop, customers recognise those that go the extra mile.
  • Better Systems: closing the loop is not just about addressing individual customer experiences. Developing processes and systems that best capture and process feedback helps companies refine their overall CX strategies, with the potential for collaboration across a diverse number of teams and departments. Customer experience can not be left to one person or unit. It requires an all-of-organisation approach, from the CX team that analyses collective feedback to front-line staff that share what they have learned from closing the customer experience loop. The potential for closed-loop CX to unite employees for a common purpose cannot be understated.
  • Reputation Management: closed-loop CX can play a pivotal role in avoiding minor criticisms turning into major headaches. With modern tools such as social media putting immense power in the hands of customers, it is essential brands do all they can to ease customer concerns before they feel the need to publicly attack a company. Identifying poor experiences early and ensuring that staff reach out to aggrieved customers as soon as possible can play a huge role in maintaining a positive reputation and public image. With the immediacy of social media, the window to mend a fractured customer relationship is getting smaller, hence why every effort needs to be made to close the loop with speed.

How to Improve Closed-Loop CX Management

Now you know the importance of closing the loop on customer feedback, it is time to explore several steps to ensure you do it well.

  • Be Strategic: resources are finite in any organisation and that is why CX leaders need to be mindful of the best places to direct their energy when it comes to closed-loop feedback. While it is tempting to address every piece of criticism that comes your way, as a starting point it is best to focus on feedback that has been collected shortly after a customer has completed a transaction or event. This ensures the experience is still fresh in their minds. Furthermore, feedback that does not have a clearly defined purpose or required action can be a lower priority.
  • Be Extensive: every customer is unique and that means having a variety of options for them to proactively provide feedback and for you to solicit it. From phone calls and online comments to in-store suggestion boxes and distributed surveys, do all you can to source feedback from as many customers and use as many platforms as possible.
  • Be Organised: employing a quality case management system will ensure you can track a customer complaint or comment from receipt all the way to resolution. This style of system can assign ‘tickets’ to the right team member and ensure their progress is monitored, with the best systems also allowing managers to set and track targets (eg: 80% of all complaints need to be resolved within one day).
  • Be Tech-Savvy: with an extensive range of automation platforms on the market to suit all budgets, there is no excuse for companies not to be using such technology to their advantage. Automated responses ensure customers receive an immediate acknowledgement that their emails or feedback has been received, while automated workflows can be designed to ensure a ticket gets created in real-time whenever a customer provides a low rating or negative comment. This then allows a customer service agent to place an immediate priority on reaching out to the customer with relevant insights to address their concern. Such technology is crucial to helping companies turn bad reviews or negative feedback into positive experiences as quickly as possible.

Who Cares Wins

A wise man once said: “Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.” This concept lies at the heart of closed-loop CX management. Closing the feedback loop not only benefits the customer involved but helps facilitate a better experience for future consumers and inspires pride within staff who value being part of an organisation that not only seeks feedback but does something about it.

Closing the feedback loop allows customers to resolve their issues directly with staff who are prepared for the conversation, in turn making them feel more valued. The insights those agents bring back to the company are also pivotal in helping optimize the organisation’s CX design for future customers.

As previously stated, feedback is nothing without action. Closing the loop in real-time needs to be a priority for all companies as it helps create happier customers, grow revenue and enhance reputation. From measuring perceptions at all points of a customer journey and making it as easy as possible for them to provide feedback to automating CX workflows and reporting tangible goals and results to staff, the time to develop, deploy or enhance your own closed-loop customer experience needs to start today.

Given the increasing importance of CX across all sectors, tap into a wealth of data from trusted sources that show why there has never been a more important time to focus on customer experience – and how you can deliver it.