It’s easy to talk about the importance of customer input. You bring it up in a meeting, everyone nods in agreement, and you feel smart.
It’s another thing to actually invest time gathering and analyzing customer input. As important as this data is, the act of obtaining it is no different than any other business activity: you’ll need to show a return on the investment you put in.
Luckily, there are several metrics that you can easily connect with the insights you derive from customer feedback.
1. Conversion Rates
This is probably the most persuasive number on this list because it has the clearest ties to revenue and increased profitability.
You can draw a line between customer feedback and more conversions in numerous ways.
Let’s say you surveyed your customers during a website redesign. You can use that qualitative data to inform how you should structure your sitemap, product pages, or other aspects of your site to increase usability and bring in more form submissions.
Likewise, you can use interviews or surveys to uncover whether your marketing is truly resonating with your audience.
Using customer feedback to inform the copy on your homepage, landing pages, or even in your product onboarding is a much more scientific way to improve your conversion rates than implementing whatever best practices you about on your favorite blog.
2. Customer Retention
One surefire way to keep more customers is to listen to what they say.
Measuring retention as a return on gathering feedback is a broader approach, but it’s another important metric for business growth. Because as we all know, keeping customers is dramatically more profitable than having to desperately court new ones.
To improve retention, talk to customers when they’re satisfied, when they’re upset, and even when they leave.
Engaging with people at each stage of the customer lifecycle will yield a diversity of feedback, which will give you a more clear-eyed understanding of where you could improve your product or service.
One of the most important times to survey people is when they’re breaking up with your business. Send these people a one-question email asking why they’re leaving, and watch the honest feedback roll in.
3. Net Promoter Score
If you’re not using NPS, you can substitute whatever calculation you’re using to gauge customer satisfaction.
The point is, when you listen to what customers say they want, and then make changes that meet those requirements, people are going to be happy with your company. And they’ll probably stick around. (See the previous point.)
There’s also decent evidence that your NPS score can predict future growth, which is another correlation you could use to validate the ROI of this customer feedback endeavor.
Customer satisfaction measures also have another, somewhat hidden, utility: an early warning system. There’s reason to believe that the majority of people who may be unhappy with your customer experience don’t voice their opinion directly to the brand.
Instead, they just disappear, post an aggressive review online, or badmouth you to their friends and coworkers. All of these scenarios are damaging, and the best way to avoid them is to be proactive.
4. Support Costs
For both startups and enterprise, customer support can be a significant cost center. Hiring, training, and retaining support agents is a major undertaking, though one that’s necessary for most product companies.
But what if there was a way to reduce support costs by listening to customers?
An oft-overlooked benefit of customer feedback is that fixing whatever is giving people trouble means those people won’t call as much anymore. Consequently, you won’t have to employ as many support personnel, simultaneously reducing your salary expenditures while making customers cheaper to retain.
To establish the ROI of lower support costs, look for patterns in the issues mentioned in support tickets. After you address those issues — either by establishing a product strategy with a UX consultant or making the changes with your inhouse team — compare the number of support tickets about that particular issue.
If you fixed the right things in the product, then you should see a big drop in tickets about that issue, which means agents are spending less time with that issue. If you picked the right issue, it should mean that agents are working less in general, because the total ticket volume has come down.
When people like you, they’re more apt to recommend your company to others. It’s pretty obvious why this is a good thing for your business.
Like support costs, the easiest way to tie an increase in referrals to customer feedback is to establish a baseline and then compare it to the new number after you’ve made a back change based on feedback.
That way, you’ll be able to measure exactly how many more referrals that new redesign is bringing in — a redesign that was informed by customer feedback.
Most people know deep down that understanding customers and giving them a platform to express their views about your company is an important part of doing business.
But what seems logical on paper becomes difficult in practice. That’s why it’s important to have your ROI argument ready.
Otherwise, the time and resources you put toward customer feedback will wither, as will the relationship you have with your clientele.