Analyzing customer feedback to improve satisfaction

A competitive business landscape combined with the dominating presence of social media have made customer satisfaction essential for success. This is where customer feedback becomes invaluable, providing the insights businesses need to improve their services and products and keep their brand strong. This blog will focus on effective strategies, tools, and best practices for analyzing customer feedback. Whether you're looking to fine-tune your customer experience or overhaul it entirely, understanding how to dissect and act on feedback is key to not just meeting, but surpassing customer expectations.

Customer feedback analysis is the systematic examination of customers' inputs, both qualitative and quantitative data, aimed at enhancing their satisfaction. Whether it's through surveys, reviews, social media commentary, or direct feedback, understanding the myriad forms of customer feedback is crucial.

It's important to collect feedback from customers by using a variety of methods to get a strong set of data to analyze. Each feedback method offers valuable insights into the customer's experience, presenting opportunities to improve products to meet customer needs and elevate brand interactions.

• Surveys: A versatile tool for gathering structured user feedback, surveys can be deployed across various touchpoints in the customer journey. Surveys are particularly effective for quantifying satisfaction levels and identifying specific areas for improvement. By tailor-fitting questions to target different aspects of the customer experience, businesses can gain actionable insights to drive strategic decisions.
• Social media: Monitoring social media platforms offers a real-time pulse on how customers feel about a brand, products or services. Engaging with customers through comments, direct messages, and mentions allows businesses to collect unfiltered feedback in the form of qualitative data. This method not only helps in quick issue resolution but also nurtures a community-focused brand image.
• Reviews: Online reviews on third-party review sites or your own platform provide a wealth of constructive feedback. They serve as a dual-purpose tool: helping prospective customers make informed decisions and offering businesses candid insights into what's working well and what isn't. Reviews are particularly valuable for identifying trends and patterns in customer satisfaction.
• Customer service conversations: Direct interactions with a customer service team during support calls or chats are rich sources of feedback. They offer immediate insights into customer issues, preferences, and satisfaction levels. Analyzing these interactions can uncover common problems and opportunities for enhancing product or service offerings and customer service practices.
• Interviews: Conducting one-on-one interviews, whether in person or virtually, can yield deep, qualitative insights. This method allows businesses to explore customer needs, experiences, pain points, and suggestions in great detail. Although more resource-intensive, interviews are invaluable for gathering nuanced feedback that surveys or analytics might miss.

Upon gathering customer feedback, you can begin the process to analyze the data and gain valuable insights. There are a number of tools and methods organizations can use to enable astute analysis of the information collected.

To gauge the effectiveness of customer experience optimizations, key metrics such as the customer satisfaction score, customer effort score, and net promoter score are indispensable. By transforming customer feedback into actionable insights, businesses can develop enhancements that significantly improve customer satisfaction levels.

Customer satisfaction score (CSAT)

This key performance indicator (KPI) puts a concrete measurement to the general idea of customer satisfaction. Most often collected through survey data, the calculation starts with customers rating their satisfaction on a scale from "very unsatisfied" to "very satisfied." The scales can be numerical, text-based, or represented through a variety of icons like smiley faces or thumbs up/down. The CSAT score is then calculated by taking the number of customers who indicated top satisfaction (e.g. all 4s and 5s on a scale from 1 to 5), and dividing that number by the total number of survey responses. Multiply that number by 100 and you'll end up with the percentage of satisfied customers.¹

Customer effort score (CES)

As one senior worker at Gartner explains, "Effort is the strongest driver to customer loyalty,"–even more importantly, low-effort interactions keep them from turning into disloyal customers who could stop patronizing a business and start speaking ill of it.² Unfortunately, many people are familiar with high-effort interactions: being passed from one customer service agent to another, getting the same information over and over without finding answers. But when customers feel like they don't have to put much effort into customer service interactions, it can really pay off.

CES is typically gathered by having customers respond to a statement (e.g. "This company made it easy to resolve my issue) with a score representing their level of agreement. Set on a scale of 1-7 with 1 being strongly disagree and 7 being strongly agree, the CES is determined by dividing the sum of scores from customers selecting “somewhat agree” or above divided by the total number of respondents.³ According to Survey Monkey, a good CES falls in the top 20% of your chosen scale. For example, on the 1-7 scale, a score of 5.6 or above indicates good CES.³

Net promoter score

The Net Promoter Score(r) (NPS), is a widely used metric to gauge customer loyalty and predict business growth potential. It's calculated based on responses to one key question: "On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?" Based on their scores, respondents are categorized into Promoters (9-10), Passives (7-8), and Detractors (0-6).⁴

To calculate the NPS, take the percentage of Promoters and subtract the percentage of Detractors. Passive scores are excluded from the calculation because they don't significantly influence the overall score. The resulting figure, which can range from -100 (if every customer is a Detractor) to 100 (if every customer is a Promoter), gives businesses insight into customer satisfaction and loyalty levels. A positive NPS is generally seen as good, and a score above 50 is considered excellent, signaling a healthy balance between satisfied customers and loyal advocates.⁴

A customer journey map provides a visual representation of every interaction a customer has with a brand, offering invaluable insights into the overall customer experience. This process not only aids in identifying critical touchpoints and pain points but also serves as a roadmap for implementing enhancements that nurture a more satisfying and engaging customer journey.

Creating an effective customer journey map begins with understanding your brand experience from the customer's perspective. To start, identify all potential touchpoints, or places where the customer interacts with your business, including:⁵

• Physical properties like stores, offices, hubs or stands
• Marketing materials like posters, stickers, advertising on billboards and commercials or digital ads, emails
• Online platforms like websites, landing pages, social media platforms
• Experiences with customer support team and resources
• Employee interactions whether at a brick-and-mortar store or sales team
• The checkout process and purchase experience

Mapping these interactions comprehensively allows you to visualize the entire customer journey–and how many possible customer journeys there are. It's crucial to highlight not just the touchpoints but also any pain points—areas where customers feel frustrated or unsatisfied. You should have some idea of what these are from gathering customer feedback, such as surveys and reviews.⁵

Once you have your customer journey map laid out, it becomes a powerful tool to pinpoint where improvements are needed. Businesses can use these maps to streamline processes, eliminate pain points, and enhance overall customer experience. By focusing on areas that cause friction for customers, companies can develop targeted strategies to not only improve the customer journey but also improve customer satisfaction and loyalty. Regularly updating the customer journey map as you make changes and gather more feedback ensures it remains an effective guide for continuous improvement.⁵

Research at Gartner finds that 96% of customers become more disloyal after a high-effort service interaction versus just 9% who become disloyal after a low-effort experience.² By systematically combining customer feedback with a detailed analysis of the customer journey, businesses can more easily identify the places that spur negative sentiment for the average customer. These moments of dissatisfaction could be brought about by long wait times, complicated navigation on a website, or poor product experience. It's these insights that provide a clear focus for where improvements are most needed, bridging the gap between customer expectations and the actual experience provided.

Implementing solutions

Once pain points are identified, the next step is developing and implementing solutions to address these issues. This may involve process changes, like streamlining checkout procedures, enhancing training for customer service representatives, or improving product features based on customer suggestions. Prioritizing changes that will have the most significant impact on customer satisfaction is crucial. Additionally, involving employees from various departments can lead to more innovative solutions and ensure that improvements are practical and comprehensive.

Continuous improvement

Improving the customer experience is an ongoing process that requires continuous monitoring and adaptation. Establishing regular check-ins to review customer feedback and measure satisfaction levels is essential. This approach ensures that businesses can quickly identify new issues or areas of concern as they emerge. Moreover, it champions a culture of continuous improvement, encouraging teams to remain customer-focused and proactive in enhancing the customer experience. By treating customer feedback as a valuable resource for constant learning and development, companies can sustain improvements and adapt to changing customer needs and expectations.

Acquiring new customers can be significantly more expensive than retaining existing ones. Retention is not just about preventing customers from leaving; it's about fostering a positive, ongoing relationship that encourages repeat business and referrals. High retention rates translate to a more predictable revenue stream and can significantly lower marketing and acquisition costs. Moreover, loyal customers often provide valuable feedback that can drive innovation and improvement. In this light, understanding and implementing effective retention strategies becomes a cornerstone of not just surviving, but thriving in today’s business environment. Through a blend of personalized experiences, quality customer service, and constant value addition, businesses can build a loyal customer base that is the bedrock of long-term profitability and growth.⁶

Customer retention strategies

Some common ways to maintain and increase customer retention include:⁶

• Loyalty programs that offer discounts or points earned for purchases like those used by credit card companies, grocery stores, and many others
• Buy now, pay later services like Affirm, Klarna, or Afterpay
• Limited time products- consider McDonald's McRib, which is an enduring favorite of customers but is only offered seasonally, the same goes for many Starbucks beverages
• Smooth operations like quick delivery, easy returns, and generous refund policies– both Zappos and Costco are known for their 365 day return policies
• Values-driven branding and marketing –like TOMS shoes One for One® model

Analyzing customer feedback is a critical aspect of enhancing the customer experience, yet it comes with its set of challenges. Data overload is one such challenge, where businesses receive vast amounts of feedback across different channels, making it difficult to process and act upon effectively. Biased feedback is another issue, wherein the feedback collected may not accurately represent the customer base due to overrepresentation of extremely satisfied or dissatisfied customers. Additionally, integration issues can arise when feedback data from various sources can't be easily consolidated, leading to fragmented insights that are challenging to interpret and use for making informed decisions.

Overcoming these challenges requires a strategic approach. To tackle data overload, businesses should leverage analytical tools and software that enable them to categorize and prioritize feedback, focusing on the most impactful insights. Addressing biased feedback involves ensuring that your feedback collection methods are as inclusive as possible, reaching out to a broad spectrum of your customer base to get a more balanced view. For integration issues, investing in integrated customer feedback management tools can streamline the collection and analysis process, allowing for a unified view of customer sentiments. Additionally, establishing clear objectives for feedback analysis and regularly training your team on best practices in feedback collection and analysis can significantly enhance the effectiveness of your customer feedback system. Implementing these solutions will not only improve the quality of your feedback analysis but also empower your business to make data-driven decisions that boost customer satisfaction and loyalty.

The ability to effectively address customer needs and pain points is paramount in today's business landscape. The Marquette University online MBA equips future business leaders with the tools, knowledge, and critical thinking skills needed to excel in customer experience optimization. Through a curriculum that melds theory with practical application, students learn to navigate the intricacies of best practices for the business success industry. With courses designed to foster skills in analytics, management, and strategic decision-making, graduates leave ready to tackle the challenges of customer experience management head-on.

If you're interested in learning more about the online MBA, schedule a call with an admissions outreach advisor.