What Makes Customers Loyal?

Recognition of their ideas and problems.
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Listening to Customer Feedback

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We often hear stories about organizations who go above and beyond to exceed customer expectations. From accepting a return at a department store that didn’t even sell tires to simply providing unexpected cookies, we see stories shared across the country that become unforgettable in people’s minds. These moments happen because an organization exceeded customer expectations. When we are able to do this, we create reputations that attract more customers and talented workers.

Customer service in some form is usually a core value or principle for most organizations. Whether the primary focus is to provide a service, like in education, or to sell a product, customers expect to have a good experience and additional support when needed. Service is a differentiator between an organization and its competitors, again, whether price is a factor or not. To be an organization that generates and retains loyal customers, we place a high value on service. As a result, we listen to customer feedback and analyze that information for opportunities for improvement. We can’t improve what we can’t understand, therefore we listen.

improve with customer input

Brands that have a reputation for delivering an exceptional customer experience are continuously looking for opportunities to better understand that experience and anticipate their customer’s needs. Listening to customers and involving them in brand decisions allows an organization to gain a different perspective about the experience and uncover valuable blind spots and gaps. In turn, customers feel like their opinion matters to the organization and that we care about serving them. Asking for feedback, listening, and involving the customer increases customer loyalty.

Since as early as 2008, LEGO has recognized the importance of involving customers to generate new ideas. Their online community innovation platform, LEGO Ideas brings together passionate customers from around the world to explore, submit, and evaluate new ideas for LEGO kits. People actively participate in the creation of successful LEGO products all the way from the first idea through end development. The LEGO Ideas community has around 1.5 million members who have submitted more than 33,000 project ideas, including 30 that have been produced. This community gives LEGO fans a way to feel like they are part of the brand and communicate directly with the company.

Lego isn’t alone, the logistics and shipping company, DHL, has also discovered that its customers want to help think about how to improve their business. DHL’s innovation is customer focused by bringing together customers and employees through hands-on workshops to share best-practices and create value. As a result of the customer co-creation innovation workshops and other activities, DHL has improved inventory and warehouse picking efficiency by 25% and customer churn rate has decreased and revenue from new services/products has increased.

In addition, a recent report from Hitachi Europe found that 58% of businesses have piloted co-creation projects to help them innovate, and 51% say that co-creation has improved their financial performance. Whether or not an organization is seeking to add new products or services, a focus on the customer’s perspective and opportunities for improvement can help us identify critical gaps, and better provide an exceptional experience to those we serve. When we continuously listen to customers, and improve the customer experience, we bring the value of service to life.

4 steps for listening to customer feedback

Time is valuable for you and for your customers. The easier it is to provide feedback to an organization, the more likely a customer will be willing to do so. If providing feedback takes too long or is too complicated, we may receive fewer responses and miss the chance to collect valuable information.

  • Use short surveys that can be completed in less than five minutes.
  • Ensure surveys are optimized for mobile devices, and accessible at the customer’s convenience.
  • Conduct feedback sessions or focus groups virtually or in-person where attendees can speak freely and a facilitator asks questions and records their response.
  • Collect feedback informally by walking around the organization, talking to customers, and listening to frontline employees who are often closest to the customer.
  • Allow opportunities for people to submit feedback anonymously. People may feel more comfortable and honest without revealing their identity.

When creating surveys or planning focus group questions, carefully consider the words you choose and the questions you ask. There may only be time for a few questions. How can you plan questions that will give you the most relevant information?

  • Know your audience. Is this survey or feedback session being delivered to a specific segment of your organization’s customers, the entire business, or is it about a specific product, service or process?
  • Be aware of how you frame messages and questions. Positive or negative framing in communication can influence the receiver’s decisions and how they feel about the message.
  • Develop open-ended questions that require people to respond with information other than yes or no. Use rating systems rather than multiple choice questions if necessary.
  • Seek to understand the entire customer experience, this begins before a customer contacts or arrives at the organization. First, a person has identified a problem or a need and will need to find information to satisfy that need. Many times, the experience doesn’t end when a customer completes a purchase, there may be a need for continual support or maintenance between the organization and the customer that we can further explore.

Receiving results or feedback is an emotional experience, however, we can’t get better if we don’t know what’s wrong. When we are collecting data in person or reviewing data after feedback has been collected, we work to shift negative, defensive emotions to positive responses to foster improvement.

  • Resist the urge to defend the feedback or react emotionally to the feedback. If you are reviewing results take a break and come back to them later.
  • In person, be careful not to interrupt those providing feedback and to monitor your body language. This will likely take practice, however trust can be broken and feedback may decrease if participants sense the facilitator is becoming reactive or defensive.
  • Focus on listening and understanding before moving to responding and taking action. Humans need time to pause and process information otherwise we are likely to react rather than respond when our emotions are triggered.

When we thank customers and let them know how their feedback will be implemented, they are more likely to continue to give us feedback in the future. If we ask for feedback and don’t use it, they won’t be as motivated to continue to provide feedback.

  • Reach out and thank customers who provided feedback.
  • Communicate back to your customers what changes you made based on their feedback.

There is More to Customer Service than Satisfaction

Think beyond customer satisfaction surveys, which can fluctuate based on emotions, to how the organization can track customer loyalty to determine its value to customers. If customers aren’t returning, or if they are deciding to choose a competitor instead, they may be unhappy with your organization, product, or service. In different organizations, research reveals 60-80% of lost customers reported on a survey that they were satisfied or very satisfied just prior to choosing not to do business again with an organization. Is measuring customer satisfaction really enough to create loyal customers?