Written by Abby Herriman

Published on MarTech Advisor

All businesses exist to serve their customers’ specific needs. The best businesses go beyond customer demographics and dig in deep; they gather all the information they can about their customers via focus groups, web surveys, pilot programs, product testing and other instruments. They put themselves in the shoes of the customer to get to know the actual person behind the persona. They understand what really drives an individual’s need or desire for a product, and how that individual perceives the world.

Customer feedback provides a window into this world that is incredibly valuable. Feedback helps businesses successfully tailor their offerings to meet the changing needs of the marketplace.

But the feedback businesses receive—solicited or unsolicited; positive, negative, or somewhere in between—is useless unless organizations act upon it to improve customer experiences. Businesses must use customer feedback to figure out what is influencing experiences and making customers feel a certain way; create solutions based on that information; and then monitor the effectiveness of those solutions after implementation.

This process involves asking a few questions — and pursuing strategies that answer those questions.

Why Did Something Happen? Conduct a Root Cause Analysis

Sometimes, companies get lucky and customers give explicit information about a failure or defect, or about a fantastic customer service experience. In other situations, companies may need to dig into CRM or tracking systems to try to match customer feedback with touchpoints along the customer journey to see where things went wrong.

If the experience is negative, it might be time to perform a root cause analysis, which can help businesses get to the true nature of the problem. A root cause analysis uses techniques such as the “five whys” technique: digging through multiple processes or systems to find the real cause of failure.

For example, a customer gives negative feedback about ordering on a company website. She tried to order a product that appeared to be in stock on the site, but was out of stock when it was placed in her cart. The first “why” may be a technical question: why did the glitch occur? But a root cause analysis forces businesses to look deeper. Maybe there is an issue with product forecasting, or with live chat support on the website.

An Ishikawa, or fishbone, diagram can be helpful in determining the root cause of the problem that ultimately led to the customer service failure. This type of technique works well because it takes away the tendency to blame one factor or person for a failure or defect in the system.

Interestingly, a root cause analysis is just as important to perform when a company gets great customer feedback. It is critical to find the root cause of successes along the customer journey so that they can be repeated.

How Do We Fix The Problem? Customers Drive the Solution

The worst solution a company can implement is one created in a vacuum, without the input of a single customer. All feedback – negative and positive provides companies multiple opportunities to improve.

Customers should be at the heart of all of the solutions designed to fix the problems uncovered by negative feedback. When companies receive negative feedback, they should first implement a “quick win” solution to immediately fix what’s broken and begin to repair the relationship with customers. As businesses work to get to the root cause of the problem, they should consider rolling out longer-term solutions that will result in revenue gains or retention increases, such as engaging with customers proactively via Twitter accounts dedicated to customer care or through customer loyalty programs.

Ideally, organizations can implement a council of engaged customers from each segment of their market to give feedback on a regular basis, not just when a failure occurs. This council can then be tapped to test communications, co-develop or pilot new products and solutions and answer survey questions on a regular basis. These customers can also serve as a brand’s greatest advocates by helping other potential customers learn about an organization and its offerings. Great examples include Disney’s Moms Panel and the My Starbucks Idea social media program.

By implementing a regular consumer council, businesses have valuable customers and specific journeys to draw from when implementing changes. Then, organizations can look at the big picture and create a road map for improvement based on consumer needs and feedback.

How Are We Doing? Creating a Culture That Welcomes Feedback

A company’s reputation is built on the combination of its operations (backstage) and how it is perceived by customers (frontstage). When things are humming smoothly along backstage and customers are giving positive feedback both to the company and outwardly on social media, companies can feel more secure about their reputation.

Monitoring both backstage and frontstage performance is important and can be done through performance dashboards. These can be used to gather data about internal and external operations and perceptions, providing a truly complete picture of how things are going.

Dashboards give businesses the ability to track customer feedback and the subsequent changes the company implements based on that feedback. Simple dashboards can track internal company metrics, such as response time to customer service questions. More complex dashboards can integrate customer feedback data gathered via post-call and web surveys.

If businesses have specific employees or teams designated to monitor and respond to customer feedback, dashboards can be a handy way to track and communicate team actions. Tracking responses to feedback is critical; companies can use the dashboard to work with data in aggregate to identify trends. They can also ensure that every piece of communication receives an answer.

Consider what can happen when a company doesn’t take time to acknowledge feedback. I recently took time out of my day to email the creators of one of my favorite apps with a small complaint. I did not receive a response—no automatic email reply, no “we’re working on it,” no “thank you for taking the time.” Just radio silence. The next day, I discovered that the company had once again published something related to what I had initially contacted them about. They had apparently ignored my complaint and, in ignoring my complaint, made it clear they didn’t value my input. As a result, I’m now looking for a replacement for my one-time favorite app.

Feedback acknowledgment doesn’t have to be a grand gesture. Sometimes, a “10 percent off your next purchase” coupon is appropriate. Other customers will feel satisfied by simply receiving an email from the company thanking them for taking time to give feedback.

But some form of acknowledgement is important because it closes the feedback loop and adds a positive experience on an individual customer’s journey map, which is different for everyone. Consider the customer who hears a friend talk about a product for the 50^th time, and then buys the product herself, gets great service, and posts about her experience online. She may have had a unique need or experience with the product, making her customer journey different from her friend’s journey – but it’s still a positive journey because the company she purchased from took the time to get to know her and listen to her story.

Those stories are the keys to brand loyalty, and they are told through a customer’s experiences and feedback. They help businesses determine what happened with a customer, how to address issues in the short and long term, and create a winning, customer-centric culture.