Customer feedback is one of the most difficult things to manage; it can come in a dozen different formats, across a dozen channels, from a dozen different people. And forget sifting through all of it, trying to prioritize one piece over another and turn it into actionable insights. But, as impossible as it seems, managing this customer feedback in a coherent and streamlined way is actually one of the most important things you can do for your company. Inefficient handling of customer feedback can result in unhappy customers, higher customer churn, and inferior product developments and business decision making.

Lucky for you, we’ve spent a lot of time working with product and customer teams from SaaS companies across the globe to put together a comprehensive guide on best practices for customer feedback management. We’ll help you understand what it is, how it works, and why it’s crucial to your company’s success. Stay tuned.

What is Customer Feedback Management?

Customer feedback management organizes both proactive and reactive feedback from every channel into a single system of record where it can be analyzed and used to increase customer satisfaction, improve your product, and reduce churn. 

Why Is Customer Feedback Management Important?

Don’t yet see the value of managing customer feedback? Here are some stats to convince you: it can cost you anywhere from 5x to 25x to acquire a new customer than to retain current customers, and the #1 most common source of new leads is referrals. Keeping your customers engaged and in the customer feedback loop with what you’re working on is key to keeping them satisfied with your product, and the best way to do that is to listen to their feedback and incorporate it into your product. 

Proper customer feedback management can help you:

1. Improve Your Product

The people who know your product best are the people who are using it day in and day out; your customers. As much as us product folks don’t want to admit it, they’re often the ones who will have the best ideas for how to improve your product because they’re the ones who are going to benefit from it getting improved. By prioritizing what your customers are requesting for your product, you can guarantee that you’re creating something that people are going to get value out of and you’re bettering your product.

2. Validate Your Product Roadmap

One of the hardest things about building a product roadmap is deciding which items to prioritize. How am I supposed to know what’s going to have the highest business impact, or what’s going to benefit my customers the most? Proper customer feedback management can help you validate ideas you already have in your roadmap by finding out which items resonate most with your customers. Understanding what your users want can help you nail down a product roadmap and decide what to build next for a more successful customer journey.

3. Get a Pulse on Customer Satisfaction

A great benefit of customer feedback management is being able to get a better idea about what your customers are happy with and what they feel is lacking in your product. No one has tested your product better than your customers, and they’re able to provide honest, unbiased product feedback about what’s working and what isn’t. If the general consensus is that most users are satisfied with your product, then you can probably focus on adding additional functionality that will enhance the customer experience. But if you find out through their feedback that the majority of your users are unhappy with your product, it may be time to take a look at what you’ve got and figure out why it isn’t resonating with your customers.

4. Reduce Customer Churn

If customers feel like their feedback is being ignored, they’re going to skip town to find a product that they feel resonates better with their ideas and needs. Engaging with your customers, and incorporating their feedback, if it aligns with your roadmap, is a great way to ensure they stick around for the long haul, and the key to doing this is having a proper system to manage all that customer feedback. 

Customer Feedback Types

Customer feedback can typically be sorted into two different categories; proactive feedback and reactive feedback. Proactive feedback is information actively gathered from your users, like sending out an in-moment survey. Reactive feedback, then, is any information that a user sends in on their own volition, such as submitting a feature request or bug report.

Reactive Customer Feedback

Reactive customer feedback is any type of feedback that comes unsolicited. This type of feedback can typically fall into one of three categories; requests for something new, requests for improvements to an existing feature, or a report that something is broken. This includes feature requests, feedback received through live chat, bug reports, and reviews of your app left on third party websites, social media, or app stores. You may also receive general sentiment feedback, like if someone is unsatisfied with your product, but that typically will only come if you reach out to your customers asking for their thoughts.

While you certainly shouldn’t ignore reactive feedback, it’s important to consider the context in which it was received. This type of unsolicited feedback helps provide insights worth considering or pursuing, but it should be validated in a larger context before being acted on. Your product roadmap shouldn’t be driven by a request from a particularly influential salesperson, nor your CEO’s latest idea. Sure they should certainly be thoughtfully considered, but you should validate these inputs using proactive feedback collection methods, which we will cover shortly. In other words, you should never overreact to one single piece of feedback, particularly if it’s unsolicited. 

Proactive Customer Feedback

As opposed to reactive feedback, proactive customer feedback occurs when you are actively soliciting feedback from your users and customers, rather than waiting for them to reach out to you. While there are many different proactive methods, the most common and accessible include user interviews, usability testing, focus groups and customer surveys ( like NPS or Feature Fit Index).

1. NPS

We’ve all seen NPS in action (“How likely are you to recommend this product to a friend?”), and it’s commonly used to gauge your customers’ overall perception of your company. And while NPS may not be the best way to measure the success of a product, it can be a very quick and cost-effective way to get a read on customer satisfaction with your product. You won’t get in-depth data from NPS about exactly what your customers are happy with and what they feel is lacking, but it’s a convenient way to just get a pulse check on overall satisfaction with your product. Then, once you’ve got an NPS score to go off of, you can start doing a deeper analysis of who isn’t happy with your product and how to go about fixing it to better ensure customer loyalty.

2. In-app surveys

In-app surveys are one of the easiest, fastest, and most natural ways to proactively collect feedback from your users. If a user just finished exploring your new feature, send them a survey directly inside your product asking what they think about it. The experience will be fresh in their minds so you can get reliable analytics, and it’s convenient because they don’t have to even leave your product to provide their thoughts.

An important thing to note with in-app surveys is that it’s all about timing. You don’t want to send out an NPS survey to a customer who is currently struggling with your product, or a 60 day check in survey if they’ve only been a customer for 30 days. Nailing down the timing of in-app surveys will be the key to getting the most accurate and actionable results.

3. Customer interviews

Most teams, at one point or another, will conduct customer interviews as part of their feedback collection strategy.  Interviews are a more free form format than, say, a pre-set survey, and can often allow the customer to elaborate on points that they aren’t able to clarify through other means. This format often allows for a more in-depth format that can range from the broad value of the product to specific feedback on individual product features. Because the conversation is happening in real time, the interviewer can ask the user to clarify responses to questions or go into greater detail on particular areas of interest.

There are some challenges with interviews, regardless of if they are virtual or in-person. This type of feedback collection can be a very time-consuming way to gather feedback, both for the product team and the users who participate in the interviews, so they’re not the most scalable collection method. This makes it difficult to gather enough data points to ensure that the feedback is representative of your broader user population.

4. Focus groups

Focus groups are a way of gaining feedback similar to interviews, but at a larger scale. For earlier stage companies, focus groups will likely be composed of individuals that are representative of their ICP (ideal customer profile). For larger companies, it’s possible that their focus groups will be made up of existing customers, often their highest paying or VIP customers. Focus groups are great for several reasons; it allows for deeper detail and the ability to hold a face-to-face conversation (even if it’s through virtual video conferencing) can allow for more meaningful questions and immediate clarification on certain topics. 

However, focus groups can be extremely costly and time-consuming, and there’s only so many people you can include. You’ll be able to reach a wider audience with asynchronous feedback collection, like in-app surveys, but you’ll likely get more meaningful responses through in-person channels, like focus groups or user interviews.

5. Usability tests

Usability testing is where you want to observe the user going through a specified set of tasks to see how easily they are able to navigate the tasks. There’s a myriad of different methods for usability testing including usability benchmarking, lab studies, A/B testing, clickstream analysis and more, but we won’t go in-depth on all of those now.

Like with focus groups and customer interviews, usability testing can be costly and time-consuming. But they’re a great way to test new functionality in action and see how it resonates with customers in real time. Though not as scalable as something like surveys, usability tests can provide great insights into exactly how customers are interacting with your product.

Four Step Customer Feedback Management Process

The feedback management process can be broken down into four steps: collect, validate, prioritize, and communicate. Most companies nowadays stop after the collection stage, and just let the feedback sit uselessly in an Excel sheet. But following these four steps will help bridge the gap between customer and product teams and unite everyone around satisfying the needs of your users. Let’s walk through the process.

1. Collect

The first step to managing the customer feedback process is to actually collect customer feedback, including both proactive and reactive feedback. As we just covered, feedback collection can come in a myriad of ways, from unsolicited feature requests to NPS surveys to user interviews. As each different kind of feedback has its own merits, it’s important to collect a wide variety of customer metrics. If you’re focusing all of your efforts on solely NPS survey responses, you’re not going to have very in-depth information to go off of, and if you’re only focusing on conducting user interviews, you likely aren’t going to get enough data points quickly enough to make decisions. You need to have a balance of feedback collection methods in order to have a well-rounded pool of data to pull from. 

Once you’ve collected all your customer feedback, everything needs to be coalesced into a single system of record in order to move on to the next step; validation.

2. Validate

Validation is a crucial stage that often gets overlooked and is the root of many of the issues that we see across companies. One of the biggest challenges in managing feedback is the pure volume received by teams on a daily basis. Customer success and support teams are inundated with bug reports and feature requests that they can’t fix, and product teams are handed anecdotal requests and one-off suggestions that don’t help them decide what to build next. This is why having the proper feedback management tool is so important. We recommend grouping feedback into similar buckets and organizing it into a manageable system; it helps each team understand what is most important to their users and what will have the biggest business impact.

Both proactive and reactive feedback can be considered a “piece of feedback”. This can be bug reports, feature requests, NPS results, comments, survey responses; regardless of where it came from, which team collected it, or what the feedback consists of, we can generally define everything coming from a user as “pieces of feedback”. 

Now, let’s get even more granular. We can sort “pieces of feedback” into 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. Once you define each piece of feedback, you can group similar feedback together into different feedback buckets. Several requests and insights about a live chat integration in your product can be grouped together into a singular user need titled “Live Chat Integration”. This helps your teams visualize the overall needs that pop up across the highest priority population, or largest user population, which will help you in the next step.

3. Prioritize

Alright, so you’ve collected all your feedback, you’ve organized it into distinct categories and you can see which users care about which items. Now comes the step of deciding which of these themes or needs to pursue next. What’s the most pressing issue? What is going to bring the highest business impact? What is going to satisfy your most unsatisfied customer? 

Depending on your company and your product, the item you should prioritize is going to differ based on which one of these questions you need to answer first. If your product is heavily reliant on just a few VIP users, you will want to prioritize fixing the issues that impact them the most. But if you’ve got a large user population with relatively similar characteristics, you may want to focus on the item that impacts the largest percentage of users.

4. Communicate

The last stage in the feedback management process is arguably the most important. If you’re doing all this work behind the scenes to incorporate feedback from your customers yet they don’t know what you’re doing, why you’re doing it, or if their thoughts have been heard, then there’s really no point. Communication with your customers throughout the entire process is key to taking, what we like to call, an empathetic approach to feedback management.

Constant communication throughout the feedback management process can be broken down into four different types.

1. Notification of receipt

The very first point of contact you’re going to have with your users is a notification of receipt. Essentially, this is just a confirmation to your users that you have received their request or their report and that it is being evaluated by your team. This is a step that often gets brushed aside by companies that don’t see this as important, but even just acknowledging that you’ve heard a customer’s request can assuage their concerns and satisfy their needs (for now).

2. Notification of progress

Once you’ve acknowledged that you’ve received their request, it’s important to update your users on the status of the item that they requested as it moves through your pipeline. Is your team now considering working on the item they requested? If so, you need to let them know. Even just a quick notification ping stating that their item has been moved to consideration is enough to let them know that you haven’t forgotten about them or their feedback. If you’ve decided to not move forward with building the item they’ve requested, it’s important to let them know that as well, along with even a small note as to why. If the item they requested is being considered, you should send them a quick notification every time the item progresses to the next point.

3. Transparency of current/upcoming priorities

In tandem with notifying users of the status of the item they’ve requested, it’s important to keep them updated on things you’re working on, even if it’s not something they’ve requested. This makes life easier for you and better for your users in a variety of ways: it pacifies users who want things that aren’t being prioritized because they start to understand the value of the other things you’re focusing on at the moment and it builds anticipation of all the things coming down the line.

At the end of the day, users are people too. If you aren’t focusing on something they’ve requested at the moment but you’ve explained why and you show a list of the other exciting things you are focusing on instead, most users will be satisfied with that. They just want to know that you’ve heard their request and that you’re working on things that will improve their customer experience. If you show them that, the vast majority of your users will be satisfied.

 4. Announcement of completion

The last type of communication in this process is arguably the most exciting. You’ve heard their request, you’ve prioritized it on your roadmap, you’ve built it out, and now it’s finally live in your product! This is where you should be sending educational materials, instructional guides, how-to videos, or FAQ sheets to help users adopt the new functionality and show them how to access it. 

This is just a quick overview of the entire feedback management process, and by no means covers every detail or shares every best practice. If you’d like a more in-depth look at the entire feedback management process, we’ve released a step-by-step feedback management guide with everything you could possibly need to know.

Use Parlor to Manage Customer Feedback

As important as it is to have a streamlined system for managing customer feedback, it’s not that easy to accomplish, particularly if you don’t have a proper feedback management tool in place to help your team. Overhauling the entire system is scary, and will likely take some convincing, but at the end of the day, it’s well worth it to keep your customers satisfied, engaged, and loyal and to keep your product up to date with the most impactful improvements.

Parlor makes this process easy for you by creating a single system of record for customer feedback. We’ve updated our system at Parlor so that your team has more flexibility for organizing and prioritizing the actionable feedback you receive on a daily basis. As customers dive deeper into your product, you can report on long-term behaviors and send additional product surveys to key user personas, using their feedback to guide product development. By curating a culture of collaboration with your users through Parlor, you’ll be sure to delight customers and increase their lifetime value for your business.

Conclusion

Product feedback is almost constantly pouring into companies. Properly managing and categorizing those individual pieces of feedback is essential to creating a system of record that your team can use to validate your product efforts. By listening to your users, you can begin improving your product and prioritizing the features that are going to have the biggest impact on your business.