Happy, engaged customers are an essential part of building a successful SaaS product. Listening to and responding to customer feedback is a critical element to keeping your customers happy and engaged. A customer feedback loop is the process that you use to manage this customer feedback.

So what exactly is a customer feedback loop? A customer feedback loop is defined as a simple and repeatable way to understand the process of gathering, managing, and analyzing customer feedback through six stages: Collect, Consolidate, Organize, Prioritize, Act and Follow-up. 

By implementing a Customer Feedback Loop, you can find out what your customers think of your product, what points might be causing friction, what new features matter most to your users and how to best incorporate their feedback into your product. In this post, we’ll cover the benefits of using a customer feedback loop, how a customer feedback loop works and ways to improve how you capture feedback.

 

What are the benefits of using a Customer Feedback Loop?

There are many benefits to implementing a customer feedback loop. Your customers’ feedback is an invaluable resource that will help your team better understand your customers, their needs and help you to more quickly build the best product that you can. While some ideas and features may seem like a perfect solution, users don’t always embrace or engage with new features as expected. An effective customer feedback loop also shows your customers that you value their opinion, demonstrates that you’re constantly working to make your product better, and increases customer engagement and satisfaction.

By implementing the right process and tools to manage a customer feedback loop, you’ll ensure that customer feedback becomes a competitive advantage, rather than a burden that your team struggles to keep up with.

 

How does a Customer Feedback Loop work?

An effective customer feedback loop includes six key phases that we’ll cover below.

 

1. Collect customer feedback

Although there are a number of different channels and tools that can be used to collect product feedback, we find it helpful to categorize the different types of feedback as either proactive or reactive. The best user feedback programs will adopt a collection of efforts across both of these different approaches.

Proactively collecting product feedback means that you are actively soliciting feedback from your users and customers about their experience with your product, rather than waiting for them to reach out to you. While there are many different ways of getting feedback proactively, the most common and accessible include user interviews, usability testing, focus groups and surveys.

Collecting feedback from your users right in your app is one of the most natural ways to engage your users during their use of your product. We see much higher engagement rates and higher quality responses when feedback is collected this way.

Reactive product feedback is any feedback that comes unsolicited. This feedback will usually be one of a few types – requests for something new, requests for improvements to an existing feature or a report that something is broken. You may also receive general sentiment feedback, for example someone who is unhappy with their overall experience with your company.

Channels for this feedback include other customer-facing teams within your company (e.g. sales and support) and the channels that they manage, as well as social media. Feedback may also come through an in-app system that allows users to submit feedback or specific feature requests. Other reactive feedback may not come directly to you. Customers and users may post feedback on online forums, review sites (e.g. G2 Crowd) or on their own social media accounts.

Rather than routing all of this reactive feedback to your frontline support team, ask your customers what type of feedback they have and then route it directly to the team that it’s most relevant to. This creates a better customer experience and is more efficient with your teams’ time.

2. Consolidate the feedback

With user feedback coming from all of these different sources, how do you make sense of it all? The next step is to consolidate all of your feedback into a single system of record. We’ve interviewed hundreds of companies about their customer feedback process and found that most of them have feedback sitting in two or more systems. This makes it impossible to get a holistic understanding of what your users care most about. By consolidating all of your feedback in one place, you can begin to make sense of it.

You can use spreadsheets, CRMs or project management tools to collect this feedback. But as your volume of feedback grows, a dedicated feedback management system is a much better solution.

3. Organize the feedback

The next step in the customer feedback loop is to organize all those different pieces of feedback in a way that’s more meaningful. To better understand the pervasiveness of certain feedback, you first need to be able to sort pieces of feedback together based on similarities.

We recommended first sorting by ‘Feedback Type’. In Parlor, we have five different categories: Request, Insight, Friction, Praise, and Bug. Using these categories helps your team organize and validate the impact different types of feedback will have on your business. This way you can route feedback to appropriate teams, rather than having your support team manually sort and direct feedback that may need more immediate attention.

Once feedback type is determined, the next step is to combine similar pieces of feedback together. Often many users are asking for similar things, but they use different language to describe that thing. A tagging system allows you to easily group similar pieces of feedback together so your team can begin prioritizing features and updates.

4. Analyze and prioritize the feedback

Now that your user feedback is all in one place and you’ve classified it in a way that helps you better understand it, the next stage in the user feedback loop is to understand which feedback is most important. You can look for which feedback is most pervasive, that is, which is most commonly requested. Or you can segment your customers and users into personas, such as high value customers, and see what feature requests are most common within that group. By integrating with your CRM, you can see which pieces of feedback represent the most recurring customer revenue or open opportunity revenue.

This structured, quantitative approach for prioritizing feedback addresses one of the biggest points of contention that we’ve seen across teams that we’ve interviewed. Often customer teams feel that they have a very good idea about what customers really want, and what will be most impactful to the business. But product teams feel that they know what’s most impactful in the product roadmap, and that customer-facing teams are sharing anecdotal feedback. The quantitative, systematic approach to prioritizing feedback addresses that disconnect and makes sure that you’re investing resources in building the most impactful features.

5. Act on the feedback

The next step in the customer feedback loop is to act on the prioritized feedback. With a clear understanding of what matters most to your users, your product team can now confidently prioritize their roadmap, knowing that they’ll be working on the most impactful features. During this process, the product team can continue to engage with users who requested specific features in order to validate concepts or feature previews. This process ensures that the first release of new functionality most closely matches the needs of your users.

6. Follow-up with customers who shared feedback

The final step in the customer feedback loop is to release new features and celebrate by thanking the users who shared their feedback. You can communicate the new product updates and announcements right inside your product experience, and use this opportunity to get early feedback (starting the next iteration of the customer feedback loop) on how well your new feature resonates with your users. Announcements are also a great way to help your customers adopt those new features into their existing workflow.

Of course, it’s right in the name, but it’s important to remember that the customer feedback loop is a continuous cycle. As you collect feedback on the new features that you’ve just released, continue to collect additional feedback about other parts of your product experience. By using the customer feedback loop to continuously improve your product, you’ll provide a much better experience to your customers, keeping them happy and engaged.

Continue to improve your feedback collection process

The customer feedback loop is one of the most important tools that you can use to improve your product, increase customer happiness and engagement and ultimately, grow your business. This is a bit meta, but you should also continuously improve the process of how you collect feedback and manage your customer feedback loop. What parts of the process are working well today? Which aren’t? 

Are you getting the right kind of feedback from the right customers? If not, consider using more proactive and more targeted feedback collection methods to increase the quantity and quality of feedback you’re getting. Creating customer personas such as enterprise customers, new users or free tier users will help you better target feedback collection and better understand the implications of the feedback that you receive.

Is your feedback consolidated into a single system of record so that you’re able to gain an understanding of all feedback, regardless of channel? Is that feedback organized in a way that helps you extract meaning and actionable insights? If it isn’t, check out our ultimate guide to feedback management.

Finally, do you have buy-in and alignment across all of your teams? Make sure that each team understands just how important a strong customer feedback loop is to your customers’ happiness and the health of your business. Share the insights and impact from your user feedback loop across the team to reinforce just how important it is.

Conclusion

We hope this overview has helped underscore just how impactful a customer feedback loop can be and how to get started implementing a customer feedback loop for your customers and your product. Parlor makes this process easy for you by creating a single system of record for your customer feedback and user needs. By curating a culture of collaboration with your users through Parlor, you’ll be sure to delight and increase their lifetime value for your business. Check out our website or book a personalized demo below!