Closed-Loop Customer Feedback: How to Drive Real CX Results

Customer satisfaction surveys have traditionally focused on collecting aggregate data. From a market research perspective, this approach makes sense—it’s statistically accurate, high-level, and shows trending data. However, many customers today often feel less than satisfied with this “open-loop system.” They expect that if they take the time to provide personal feedback, the company should take the time to provide personal follow-up.

The answer to keeping your customers happy is simple: close the loop. Closed-loop customer feedback provides businesses with a reliable, structured approach to collecting, analyzing, and implementing the feedback they received from customer satisfaction surveys. 

In this article, we’ll answer common questions businesses have about closed-loop feedback and how it can facilitate a better customer experience. We’ll explore: 

• What is closed loop feedback?
• What are the benefits of closed loop customer experience?
• How does a closed loop feedback system work?
• What are the characteristics of a closed loop feedback system?
• How do you design a closed-loop feedback program?

Let’s get started by first answering the most important question about closed loop feedback: what is it?

What is closed loop feedback?

A closed-loop customer feedback program gives companies the tools they need to follow-up and “close the loop” on each piece of customer feedback. In other words, closed loop feedback is a system in which feedback is provided, the appropriate members of your team see and analyze it, and actions are taken as soon as possible to resolve any problems.

A closed loop feedback system provides businesses with the structure they need to ensure all the data they collect from customers is put to use. These processes can help businesses in two key ways:

• Acting on feedback that requires an immediate response (as is usually the case with negative feedback)
• Uncovering broader trends and opportunities for improvement that warrant gathering more specific feedback from customers 

What are the benefits of a closed loop customer experience?

Closed loop feedback can improve your business’ performance and your overall customer experience (CX). CX consists of all of the interactions you have with customers and the ways which those interactions shape their perceptions of and feelings towards your business. 

Implementing a closed loop customer feedback system can be a significant step towards creating an intentional and constantly-improving CX program. This can bring your business a number of benefits, such as: 

• Increased retention. A closed-loop feedback system is especially effective for helping businesses act on negative feedback in a timely manner. This ensures that those who are at the greatest retention risk have their concerns acknowledged and resolved, showing that your business cares about their experience and will strive to improve it. 
• Improved satisfaction. Customer satisfaction surveys can only help you improve satisfaction if you have a framework for implementing the feedback you receive. By closing the feedback loop, you’ll be able to reach out to customers and enact their feedback in a structured way. 
• Quicker problem identification. A closed-loop system ensures that when feedback is given, it will be followed up on. This can be essential for situations where a customer faced a negative experience with your business, allowing you to quickly identify the problem, get in touch with the customer, and resolve any lingering issues. 

An effective CX strategy and closed loop feedback go hand-in-hand. You’ll have an established framework for acting upon the data collected to not only improve your customers’ experiences but also continually improve your strategies and service over time. 

How does a closed loop feedback system work?

A closed loop feedback system is a cycle that can drive continuous improvement each time a customer provides feedback. Here’s a breakdown of how the process works: 

• Customer provides feedback. After completing various target actions at your business—such as buying a product, receiving help from customer service, or deciding to renew a service—have customers complete a feedback survey. Make sure these surveys are simple and easy for customers to fill out in a manner of minutes to receive as much feedback as possible.
• Technology automatically alerts manager if follow-up action is needed. Use your survey tools to determine which surveys will be flagged and sent to managers for review. For example, many businesses use software with sentiment analysis features to identify negative qualitative feedback and set a threshold to elevate surveys to a manager. The tools you use to send out surveys may vary depending on your business, but consider investing in a program created specifically for CX purposes to make the process as streamlined as possible.
• To resolve a specific customer’s issue:
  • Manager takes appropriate follow-up action. When a customer reports a specific problem they encountered, a manager should be alerted about their survey response. From their, the manager can act to get in touch with the specific customer to resolve their issue. 

• To drive business improvements:
  • Root causes of the problem are identified. If a survey highlights what might be a greater issue at your business, use this feedback to consider the factors that led to the problem. This allows your team to use individual survey responses to drive business-wide improvements.
  • Company makes changes to fix the root causes of the problem. Once you have identified the root cause of the problem, your business can formally enact changes to resolve it. From there, a manager will be able to reach back out to the concerned customer to assure them their feedback has been noted and that the company is taking steps to improve the problem.
• The customer provides feedback. After responding to the feedback, keep the cycle running by collecting more feedback from that stage of the customer journey. This process provides continuous feedback, allowing your business to study how implemented improvement are performing. 

Ultimately, for each survey that starts a feedback cycle, the loop is closed when your team reaches out directly to the customer and/or takes steps to improve that pain point in the customer journey. Both actions demonstrate how a closed feedback loop creates a structure that incentivizes businesses to act on customer survey responses, ensuring they feel heard and have their problems addressed. 

What are the characteristics of closed loop feedback system?

Closed feedback loops have several core aspects that make them distinct from other feedback collection systems. Specifically, they have the following characteristics: 

1. Customer Identification

In order to follow-up in a personal way on customer feedback, a manager needs to know who the customer is and how to contact them. Consider which of your CX surveys, if any, should provide an option for customers to be anonymous. 

By removing anonymity, your managers will have the information they need to provide customers with additional follow-up. This can help your business build relationships with individual customers and collect data about which types of customers are experiencing what problems. 

For example, you may notice many customers are experiencing an onboarding issue that previously did not exist. By identifying the customers and noting that they all subscribed to your service at a specific time, you would be able to resolve the problem more easily by noting when a change occurred that may have impacted the experience of new customers. 

2. Action-Oriented Design

The surveys used in a closed-loop program should only ask questions that can be acted on.

A traditional satisfaction survey will aim to gather measurements for various aspects of the business the company cares about (e.g., staff friendliness, cleanliness, or check-out speed), but a closed-loop customer feedback program will lean toward more open-ended questions that delve into things the customer cares about.

For example, a closed-loop feedback survey may ask members questions such as:

• What could have been to make your experience with our customer service team more convenient? 
• If you have any questions about our products, how would you prefer to contact our team?
• Are there any aspects of the purchasing experience that could be improved?

These questions ask customers to identify specific aspects of their experience and elaborate on potential solutions. While the solutions customers propose may not always be possible for your business, they will still provide insight into how customers think about your business’s services. 

3. Automation

Ensure your closed-loop system is automated to allow for prompt follow-up. Some feedback programs give managers the information they need to take action but only days or weeks later. 

By automating feedback collection and alerting managers when action is needed, you’ll be able to handle critical situations with customers as efficiently as possible. When exploring CX survey tools, review automation features and ensure you can set alerts and send out surveys when customers take specific actions. 

4. Case Management

Asking managers to take action on real-time customer feedback adds new work to their days. A closed-loop feedback program will provide tools to help managers delegate follow-up actions and track the progress of open cases. 

Case management tools make it easy to create transparency around the customer experience and ensure that no piece of feedback gets lost or overlooked.

5. Customer Experience Mindset

Traditional customer surveys often haphazardly throughout the customer journey, providing sporadic feedback to specific teams. By contrast, a closed-loop program is aimed at long-term improvements. 

Closed-loop programs have a customer-centric approach, aiming to solve internal issues that result in customer problems. Rather than tracking specific metrics, a closed-loop system helps businesses make actionable internal changes based on real customer feedback. 

How do you design a closed-loop feedback program?

To create a closed-loop feedback program at your business follow these steps: 

• Implement a CX strategy. Your CX strategy will help you determine when in the customer journey you should request feedback. Consider key touchpoints where deliberate improvements to the experience can be made, such as after a first purchase or an interaction with your customer support team. If you already have a problem area in mind, focus there first.
• Use dedicated tools. While there are a variety of free survey tools available, these can result in data silos, limited customer identification, and few automation options. Instead, research and invest in a CX software solution with survey features designed specifically for a closed-loop feedback program.
• Design surveys to maximize responses. To get the most valuable feedback without turning off customers due to your surveys’ length, consider what your most important questions are and keep your surveys limited to just those.
• Understand key CX metrics. CX metrics work to answer the “why” behind other core metrics, such as retention, satisfaction, and net promoter scores. Also consider how you’ll measure the success of your closed-loop approach, such as by tracking how quickly your team responds to feedback and if feedback notably improves after a change.
• Remove silos that prevent closed loops. It’s not uncommon for businesses to send out satisfaction surveys but fail to act on them due to the information never being relayed to the appropriate team member. Use CX tools to automatically forward your surveys to team managers and create standardized processes for when surveys should be acted on immediately, elevated, or sent to a different team member.
• Automate alerts and reports. You are most likely to close the feedback loop when core processes are automated. These alerts can be set up from CX tools, and they serve to remind team members about new surveys, generate reports, and notify team members of situations that require immediate action.
• Make iterative improvements and re-measure. After each change your business makes in response to customer feedback, prepare to collect additional feedback responding to that change. This will ensure your business continues to make iterative improvements in the right direction. 

Closing the feedback loop at your business can be a relatively straightforward process with the right tools behind you. Your first steps to creating a closed loop program is to assess your current practices to determine how your feedback is currently being used. Then, take note of how well your current software allows you to respond to your surveys.

Investing in CX software can be worthwhile here, as it will provide your business with the initial tools you need to begin building a closed loop feedback program’s framework. Dedicated CX software can provide your business with core features, such as automation options, sentiment analysis, fully customizable surveys, and analytic tools to learn more about your customer journeys.

Learning More

Your closed loop customer feedback program can provide your organization with the framework you need to form better relationships with customers and continue moving forward as a business. Doing so will allow you to make iterative improvements to your business as a whole and retain individual customers by responding quickly to any negative feedback. 

Closed-loop feedback is just one part of a comprehensive CX program, however. To drive results and improve customer satisfaction, explore how close-loop feedback fits into your other CX practices or what CX practices you can develop to make the most of it. 

To help your business learn more about CX, try exploring these resources: 

• What’s a Customer Journey Map? Template & Crash Course. Each step on the customer journey can determine whether a customer stays with your business for years to come or not. Learn how to improve and document customer journeys with this template. 
• What is Customer Experience? Complete Introduction to CX. Customer experience is at the heart of a closed-feedback loop. Discover what CX is and how you can get started with an intentional CX program. 
• Customer Advisory Boards (CABs): Frequently Asked Questions. CABs give your top customers a chance to provide their must pressing feedback. Learn how to implement one and leverage it to improve your CX with this guide.