4 Ways Customer Feedback Can Increase Profits

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Have you recently decided that implementing a customer feedback strategy at your business is a top priority? Or perhaps you’ve been collecting feedback for some time and are wondering about your ROI?

Either way, your efforts are not in vain. You’ve jumped on a trend that is sure to produce tangible financial rewards. These days, if you don’t have some kind of customer feedback mechanism in place, usually a satisfaction survey, you are one step behind your competitors. Using satisfaction surveys to improve the customer experience is a practice backed up by sound research.

Rob Markey Q&A: The Value of NPS and Customer Satisfaction Surveys

Here are four ways that your business can profit by collecting customer feedback and ensuring high levels of customer satisfaction:

customer feedback increase profits#1 – You’ll save money by retaining customers

In case it isn’t obvious, keeping customers happy means you are less likely to lose them to a competitor. Once you lose a customer, the cost of acquiring a new one is anywhere from four to ten times more. The best way to retain customers is to ensure they are satisfied by acting on their suggestions as identified in feedback surveys.

An international study reveals that 62 percent of consumers say they are more inclined to buy from a brand that has asked for their feedback, and 56 percent say they are more loyal to a brand that has asked for their opinion.

#2 – Your revenue will grow…a lot

Businesses that ensure high levels of customer satisfaction by acting on feedback have an economic advantage.

“A company that is identified as a Net Promoter Score leader grows on average two times as fast as the rest of its market,” says customer service expert Rob Markey. “It has a roughly 15 percent cost advantage.”

Furthermore, according to a study by Watermark Consulting, businesses with satisfied customers have better performing stocks over a six-year period than those with less satisfied customers.

Lincoln Murphy Q&A: Keep Customers Happy and Avoid Negative Reviews

#3 – You’ll avoid negative online reviews

By addressing unsatisfied customers immediately after getting their feedback, ideally at the point of sale, you’ll avoid having them vent online with a negative review, which can hurt you financially.

“The cost of a negative review online can run the gamut from economic (it’s literally costing you customers) to morale (it sucks to work for a company with bad reviews), and everything in between,” says customer experience expert Lincoln Murphy

survey conducted among American consumers in 2013 reveals that 80 percent of respondents reversed a purchase decision after reading negative online reviews. And data from Harvard University shows that a one-star increase on Yelp can lead to a 5-9 percent growth in revenue.

“Research aside, if you need to quantify the impact of negative reviews before you take them seriously, you’re doing it wrong,” cautions Murphy.

#4 – Your employees’ performance will improve

Don’t underestimate the power of a well-designed customer satisfaction survey to improve employee performance. It can be a powerful motivator for employees who strive to provide the best service.

“Employees want to know that they are advancing some higher purpose, not just executing a repetitive task,” says Markey. “Give them feedback that links what they are doing day-to-day to the ways in which they make their customers’ lives better. Show them evidence when they are succeeding and when they’re not.”

Can you think of other ways that customer feedback can help a company profit? Share them in the comments below.

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