Feedback Loop

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Feedback Loop

What is a feedback loop?

A feedback loop is a constant process where you listen and talk to your customers, then make changes based on repetitive evaluations. It means starting from a place of humility, knowing there is always room for improvement.

If you have a successful feedback loop, it means you’ve created a culture where learning, growing, changing, and curiosity are a central part of your growth strategy, and no one relies on assumptions or hunches when making decisions.

It comes down to two simple things:

  • Asking for feedback
  • Acting on it

When you’ve created a feedback loop culture, it impacts the entire company, not just the product or marketing – it becomes the way you operate your business.

Every feedback loop works in a minimum of four stages. In the first stage, input is created. In the second stage, the input is captured and stored. In the third stage of the feedback loop, the input is analyzed. And during the fourth stage of the feedback loop, the insights gleaned from the analysis of the feedback are used to make informed decisions.

feedback loop
Source: UseResponse

What is the difference between positive and negative feedback loops?

Feedback loops can be positive or negative. Here is how they are different from each other

Positive feedback loops

A positive feedback loop in business is when a company uses employee complaints and criticisms to improve the work environment, company operations, or internal functions and processes. This can include formal interviews – onboarding or exit interviews – or surveys with multiple choice and/or open-ended questions. Or it can be informal, allowing employees to offer regular complaints or post/write them anonymously.

When it comes to discovering information that can make real, positive changes for a workplace or business functions, it should be noted that, however uncomfortable to hear, criticisms and grievances usually offer the most useful insights. It’s important to send regular surveys to customers or let your employees know that feedback is always welcome and make it clear there will never be any retribution for offering negative input.

The positive feedback loop is closed when employee complaints are addressed and change enacted. And, as a result, you’ll see an increase in employee well-being, employee retention, improved processes, and ultimately, increased profits.

Negative feedback loops

A negative feedback loop in business focuses on customer complaints. It uses customer feedback from surveys, social media, emails, chatbots, and more, to implement changes and improve products and services – ultimately benefiting the customer and the business.

In fact, a recent survey of leading product managers says that over 50% of their new products and features are motivated by customer feedback. No one knows your product or service better than your customers, so it’s important you listen to what they’re saying and close the loop by letting them know that you’ve implemented changes or have at least considered their complaints.

Negative feedback loops help build products and services directly to the needs of your target audience to improve the overall customer experience and increase customer retention.

Customer service, for example, is extremely important to customers, with 32% of consumers saying they would leave a company after just one bad experience. When you use automatic analysis techniques, you can follow regular customer service complaints in real time to implement changes right away.

A negative feedback loop benefits businesses because customers feel appreciated and are more likely to champion your products and services for years to come. And decreased customer churn, of course, greatly helps your bottom line.

Customer feedback can come from internal CRM system data, surveys, social media comments, online reviews, and more. It’s all useful data! Read on to learn how to create a feedback loop.

What are the main steps involved in implementing a feedback loop?

There are three main steps involved when implementing a feedback loop. You’ll need to:

1. Gather feedback – from customers or employees

You can send regular employee and customer satisfaction surveys or NPS surveys. Online survey tools, like SurveyMonkey and Typeform are easy to set up, customize, and implement – in emails, on your platform, or in-store. Alternatively, you can invest in 360 feedback software for collecting feedback from multiple sources.

Data from emails, chatbots, and CRM systems can also be useful, and you already have it right at your fingertips.

Monitoring employer review sites, like Glassdoor, can be helpful to find anonymous employee evaluations of your company, or simply let your employees know that all feedback is welcome.

As for customer feedback, social media listening allows you to find customer comments about your brand from Twitter, Facebook, YouTube, and all over the web.

2. Analyze your feedback – Tools that work in real-time for immediate results

When you’re working with open-ended responses, this is known as unstructured data or qualitative data.

Unstructured data is harder to analyze because it can’t simply be formatted as numbers and percentages, but it offers much more valuable insights.

It used to be, you’d have to analyze all that data by hand – a tedious and time-consuming process that oftentimes wouldn’t even produce consistently accurate results. Fortunately, recent advances in natural language processing (NLP) allow you to automatically structure and analyze unstructured text data.

3. Act on it – apply your results and close the loop

Put your results into practice and close the loop. Use your results to improve products and services. Using aspect-based sentiment analysis, for example, if you’re constantly finding Negative comments on social media about your Pricing, it’s possibly something you should consider changing.

The final step in the feedback loop is notifying your customers or employees that you’ve implemented changes or have at least heard their gripes. This can often be the most important part of the process because, even if you don’t implement changes, it’s simply human nature to want our voices heard. Otherwise, customers and employees may just feel like they’re interacting with a blank, stone monolith.

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