Why Customer Feedback Fails

With it so easy to collect customer feedback these days you’d think most companies would have an excellent “read” on their customers.  Unfortunately, that doesn’t seem to be the case (in my consulting practice).  While the increase in customer contact points (a.ka. listening posts) such as blogs, social media sites, online communities, and word-of-mouth have increased the quantity of customer feedback, many companies struggle with what to do with all this feedback.

We can understand part of the problem by looking at the results from a study investigating company usage of customer feedback by Respond (now part of CDC), which showed that:

  • 95% of companies collect feedback
  • 45% alert their staff
  • 35% use insights gained from the feedback
  • 10% deploy a change or improve processes
  • 5% tell customers they used their feedback

So what we have is a lot of activity (collecting feedback) but very little in the way of outputs (changes or improvements).  It is disappointing to see how few companies actually tell customers they used their feedback.  Maybe that is because they did so little with it.

So why so few outputs from customer feedback?

There are several reasons, and unfortunately none of them are as easy to solve as it was to collect the feedback in the first place.  Some reasons that come to mind are:

  1. The feedback mechanisms are poorly designed at the outset and deliver very little in the way of actionable insights.  Referred to as drowning in data, but starving for information.  Often times multiple tools that collect data at different customer touch points are inconsistent in their language rendering the data confusing.  Useless information is collected that only adds complexity to the interpretation of the data.
  2. There is no process outlining what to do with the data once it is collected.  There is no clear owner of the data, there is no accountability to make improvements based upon the feedback, and there is no mechanism to track improvements.
  3. Probably the most important, is the company itself does not have a culture of valuing customer feedback. I once had a CEO tell me that if a customer contacts him directly that his processes have failed!  He did not want to talk to customers directly, and as a result he now had a significant customer relationship problem on his hands.  Part of a healthy customer-centric culture is having clearly understood mechanisms for integrating customer feedback into employee compensation programs.

None of these are easy fixes, but if you truly are a customer-centric company you need to put customer feedback at the heart of your business.  To make sure it all works, keep it simple, make it all consistent, and make it part of your culture.  To accomplish all that you need to do your best to be able to correlate changes in customer feedback (leading indicator) to changes in the way you measure your business (lagging indicator).  If you don’t, make sure there are plenty of flotation devices around so you don’t drown in your data.

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6 Responses

  1. Great post, Paul! I think we have reached a point at which everyone accepts that we need to (and we are) collecting feedback. 95%? That is tremendous.

    Now, we must enter a phase of actually using that feedback. The numbers on 35% and 10% are really something cause me to wonder how these companies hold on to their Customers.

    I wrote a few posts on feedback and also about how you need to be online because if you are not, your Customers are saying anything they want to and you don’t even know it.

    Stop by, I would love your feedback. :)

    http://customerservicevoodoo.wordpress.com/2008/11/25/comcastic-service-via-twitter/

  2. Hi Brandon – Thanks for the comment. If companies are truly customer-centric, they will hang out at the same places as their customers. Like your post, that means Twitter, Facebook, MySpace, etc. It’s easy to monitor what customers are saying about companies. It’s OK to jump in and join the discussion, just like Comcast did in your post. Think about the positive word-of-mouth that type of action generates…

  3. The Huge difference btw data collection and implementation shows that companies are not sure what to do with the data. Whether the feedback is good or bad companies are probably not sure what effected the results and why. I see so many tools that address data collection but that seems to be only a part of the problem.

  4. Good point Chandan. At the heart of the problem is probably poor design. Companies enjoy the aspect of developing customer feedback tools, but don’t do an equally good job of defining what they will do with the data once they have it.

  5. Great post.

    What tools have you found that companies can use to collect and implement feedback?

    Do you have any case studies of companies who does this right?

    Thanks!

  6. Thanks for the comment Beverly. There are many tools that companies can use. Those that do the best job use a variety of sources of customer feedback – from formal survey tools (online, print, phone, etc.), to incorporating customer service call tracking and sales team feedback, to proactive tracking of conversations happening outside the company walls. For tools you can look at vovici.com or markettools.com, for customer service call tracking look to the providers of those tools such as verint or CRM vendors, and for proactive tacking on online conversations you can look to overtone.com. You can check out a case study at http://bit.ly/5AwVT8 and http://bit.ly/5xif6C. Best of luck!

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