Dec 1, 2022


Min Read


Divya Kandwal

How to build the perfect closed-loop feedback system

Customer Experience management

closed loop feedback

customer experience management program

You decide to start a customer experience management program. You select a CXM vendor and start collecting feedback. You analyze it and discover useful insights. And then what? How do you ensure that the insights you gain will be used effectively to boost growth? The answer is- by designing a closed-loop feedback system. In this article, we’ll breakdown-

  • Why is it essential to close the loop on customer feedback?
  • What are the components of a good closed-loop feedback system?
  • Steps to build a comprehensive and scalable closed-loop system, and
  • How to close the loop with all customer segments- Promoters, Passives, and Detractors

What’s a closed-loop feedback system?

Have you even answered a survey with suggestions only to never get a response from the brand? Or worse, only to receive an automated ‘thanks for filling the survey’ in return? Feedback often gets lost in the black hole of customer data. A closed-loop feedback system prevent this from happening. 

Closed-loop feedback simply memes ‘reacting to customer feedback’. This includes-

  1. Responding to customer feedback (be it positive, neutral or negative)
  2. Resolving their issue, and 
  3. Demonstrating to customers that you have taken their feedback on board

In short, closed-loop feedback is a practice of showing your customers that their feedback is important to you in a direct and personal manner.  

Why is it essential to close the loop on customer feedback?

As we’ve said before, 

Customer Experience Management is not a data-collection exercise.

The goal of a successful CX program is to discover useless insights and use them to grow. A closed-loop feedback system ensures that action is being taken on customer feedback. 

Closing the feedback loop turns insights into action. It also single-handedly improves trust and loyalty. Trust is one of the most important yet elusive currencies in CX. people buy from brands they trust and they trust brands that listen and respond to them. Unsurprisingly, 

  • 83% of customers agree that they feel more loyal to brands that respond and resolve their complaints. (Khoros)
  • 71% of consumers (age 16-24) believe that a quick response from a service team can drastically improve their customer experience. (Comm100)

Closed-loop feedback is a non-negotiable element of a good customer experience program. A closed-loop feedback system helps in-

  1. Reducing churn
  2. Improving overall reputation
  3. Identifying root causes
  4. Increasing retention and revenue

1. Closed-loop feedback reduces customer churn

Mistakes are inevitable. But how you respond after a customer has a bad experience with you decides whether they’ll stay or churn. As per Salesforce Research

If the company’s customer service is excellent, 78% of consumers will do business with them again after a mistake. 

Reaching out and solving customer issues directly makes them feel heard and inspires trust. 

2. Closing the feedback loop improves brand reputation

When you ask customers for feedback, you set an expectation that you will use that feedback to improve your service/product. Consistent failure to acknowledge and use that feedback leads to customers feeling cheated and mistrusting you. You also lose out on a ton of valuable insights that could have improved business growth.

Customers- both happy and angry are vocal online. On social media, they rant about brands they hate and praise brands that make them feel special. If you don’t close the loop on bad feedback, you risk your online brand reputation. On the other hand, following up with happy customers can earn you positive word-of-mouth and online referrals. 

3. Closed-loop feedback system helps in discovering root causes

No matter how well-designed your feedback survey is, it is impossible to determine root-cause if you don’t follow up with customers. A closed-loop feedback process uncovers additional information about emerging issues that is often missed in a traditional NPS survey. 

4. Close the feedback loop to increase retention and revenue

As we all know, companies now compete mainly on the basis of customer experience. A closed-loop feedback system improves experience from the ground up. Directly following up with a detractor and resolving their issue improves the probability of them staying with your company. Similarly, checking in with promoters- who are already happy with you- gives them a final push to recommend you to their friends and family.

Now that we know its importance, let’s talk about how to build a closed-loop feedback system. 

Two essential parts of a closed-loop feedback system

Every closed-loop system consists of two main parts-

  1. A ticketing system

This is an alert management system that raises tickets when negative feedback comes in. this system must be flexible enough to allow you to set up thresholds, such as - 

  • a low NPS score 
  • triggers for certain words in comments like ‘fraud’, ‘angry’, etc.
  1. Dashboards to manage tickets

Real-time dashboards that allow you to manage tickets, and assign them to the right team members. 

Pro-tip- Before selecting a CXM vendor, check if their solution has both these features. 

A step-by-step guide to set up a comprehensive, scalable closed-loop system

Step 1- Find a metric and distribution method that fits your need

The first step is to select what metrics you want to use at which touchpoint. Here are some common CX metrics you can consider-

  1. Net Promoter Score or NPS- This measures loyalty based on how likely your customers are to recommend you to others. This is a good indicator of the overal relationship of a customer with a brand.
  2. Customer Effort Score or CES- It measures how easy it was for a customer to transact with you. It’s mostly used after an important interaction, such as sale, service, etc. 
  3. Customer Satisfaction Score or C-Sat- This measures how satisfied your customers are with your product or service. 

For a high response rate, distribute these surveys through your customers preferred communication channel. Email, WhatsApp, In-app surveys, and SMS are the most common distribution channels.

Your CXM vendor will guide you in the selecting the appropriate metrics, channels, and touchpoints.

Step 2- Set triggers

The next step is to set triggers for when you want to receive automated alerts from the system. Here are examples of some common instances.

  • When the overall NPS score drops below a certain number
  • When a high value customer gives a bad rating
  • When a new customers gives a bad feedback
  • When customers use words like ‘cheat’, ‘angry’ in their comments
  • When your CXM program (AI) predicts that a customer is about to churn 

These triggers are based on your goals, industry, customer base, and so much more. They are unique for each company. 

Step 3- Create workflows for alerts you want to receive

Once you have selected when to receive triggers, you need to map what you’ll do after you receive them. This is what workflows are for. 

Numr CXM is extremely flexible when it comes to the workflows you can configure. You can create workflows for any situation you wish to receive alerts for such as

  • When a new customer is onboarded
  • When a high value customer gives a low score
  • When a new customers gives feedback for the first time,
  • Lack of response, etc.

The next step is to decide who these alerts should go to.

Step 4- Decide how you will close the loop for the workflows you have created 

Once you receive an alert, you have 24 to 48 hours to act. Depending on priority and urgency, each workflow is assigned to a different person with different escalation modules. For instance, the store managers can be responsible for higher-level tickets while the frontline can take care of smaller customer issues.

Pro-tip- Make sure that these workflows are set up in your own CRM system. Select a CXM program that can deeply integrate with your CRM so that the trigger action data flows back into the CXM system. This would empower your CXM vendor to predict churn and customer behaviour in the future since they would already have the historical data from the escalation handling. 

Step 5- Monitor cases in real-time on dashboards

The last step is to monitor open tickets, closed cases, speed of resolution, satisfaction with resolution from role-based dashboards. To make sure you’re on top of emerging alerts, schedule daily team huddles. You could even create a kanban board for action planning. Discuss urgent or high-priority tickets and the actions you’ll take to resolve them in the daily huddle. This will also create a customer centric culture within the company.

How to close the loop with NPS Promoters, Passives, and Detractors

A common mistake people make when building a closed-loop feedback system is forgetting about promoters and passives. We get it. Detractors are the angry customers with the highest probability of leaving. While detractors should be your priority, promoters and passives are also important. Here’s how you can follow up with them.

  1. Engage with Promoters

Reach out to promoters to learn what went well so that you can replicate those experiences for other customers. Since they are happy with you, they’ll often spend more time giving feedback. 

You can also make them feel more valued by granting them early access to new features/ products and engaging them in a referral program.

  1. Follow up with Passives

One interaction is all it takes for passive customers to turn into promoters or detractors. Ensure that they convert into promoters by asking them questions around what would make them love your product/service. Not only will they feel heard, you’ll be able to uncover crucial insights to improve your product, service, or CX strategy.

  1. Close the loop with Detractors

Follow up and resolve their issues quickly (whenever possible) to ensure they don’t churn. Closing the loop with detractors also allows you to uncover large-scale issues that might harm your brand.

Close the feedback feedback- Turn insights into action

A good customer experience starts with talking to your customers, understanding their issues, and solving them. Increasing loyalty and reducing churn both depend on how effectively you can close the feedback loop. An effective closed-loop feedback system sets you up to win by ensuring that customer feedback is always at the centre of your CX strategy. 

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