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When you are building any SaaS product, the process is heavily iterative. You launch or ship some features, capture feedback, then work on the feedback, ship new features, etc. It's an ongoing process of listening to the feedback shared and then acting on it to improve your software.
In the world of SaaS, it is formally referred to as the Customer Feedback Loop. It allows the entire team to collect feedback, learn from it, and take action according to the suggestions offered to boost the utility and usefulness of the product offering.
What is the Customer Feedback Loop?
As the name suggests, the Customer Feedback Loop is a hands-on strategy to capture SaaS feedback from users and then incorporate the opinions and suggestions in the next improved product iteration. You listen to what your customers and users are saying, note the feedback, analyze it, draw your conclusions, and use that to improve your product features.
You listen, you respond. As long as you do this effectively, you can get crucial, real-time insights to improve your product. It’s a cycle, so you constantly keep it running.
Principle: Customer Experience is at the heart of everything
The underlying principle for the Customer Feedback Loop is that the customer experience is your most important parameter. Customer feedback is what governs this cycle.
One way is to ask yourself, "how do you differentiate your brand? Do you use a specific pricing strategy? Or do you try to differentiate based on your product?" Ultimately, customer experience will emerge more important than any other metric.
Why use Customer SaaS Feedback Loop?
Many organizations have recognized the role of SaaS Feedback that comes from a Customer Loop and have established effective customer feedback programs. The loop is beneficial in many ways.
- Customer Engagement
First and foremost, the customer feedback loop immediately sends the message that the brand cares about the customers, interacts with them, and is keenly interested in finding out what they think of the products. Through a feedback loop, you can gather information about their pain points and their favorite parts of the product.
- Attending to complaints
Since you are constantly collecting customer feedback, you can also attend to their complaints. This allows you to resolve complaints sooner than later and boost customer satisfaction. Who doesn't like a quick resolution to their problems? This will lead to lasting relationships and customer loyalty.
- Real-time testing
Do you sometimes want to test ideas and solutions that seem great in theory? If you’re using customer feedback loops, you can close in on the performance of such ideas or solutions quickly.
- Reduce Churn
When you can serve your customers robustly and responsively, a positive byproduct is that you also reduce the churn on your customer base, meaning fewer customers leave your product or the retention rate is high.
Stages to capture SaaS Feedback through Customer Feedback Loop
The Feedback Loop can only be fully effective if it is completed from beginning to end — hence the loop. Three broad stages are covered under the loop.
- Information collection from customers
The most obvious step is to start collecting customers' opinions and views. You can do so using surveys, live chats, polls, social media comments, social listening, email marketing, questionnaires, etc. Identify the best touchpoints to collect detailed and relevant feedback. For example, for purchase feedback, the best touchpoint would be the order confirmation window to collect data about the purchase experience.
You could use several tools for capturing this data, from Targeted Website Surveys to Feedback Widgets to Net Promoter Score, In-Message Survey, or the good-old questionnaire.
- Analyze the collected data
Analyze the data to find patterns and recurring issues, attend to them in order of priority, and work on building solutions for the identified issues.
- Make changes to the product
Now that you have the solutions ready, it's time to apply those to the product and ship out the improved version to your customers. You should rope in the marketing team to disseminate information about the changes and announcements about improvements.
What does “closing customer feedback loop” mean?
We now know that the customer feedback loop is an important part of designing and developing a user-friendly product. Remember, it's a loop: the task started by capturing feedback has to be followed up by customer engagement, personalized communication, solution design, and implementation. This should be followed by further communication on the improvements so made.
Best Practices to Close the Customer Feedback Loop
Closing the SaaS feedback loop can strengthen your organization in several ways. Here's how you can do so effectively:
1. Manage the SaaS feedback source
The efficiency with which you close the loop depends on the efficiency of opening the loop. Where will you get the source information? Start with a targeted source of SaaS feedback, then expand into additional channels. A good metric to assess how well you capture this data is the Coverage Rate or Coverage Ratio, which tells you the percentage of customers whose feedback has been captured. A higher coverage ratio implies better coverage. Higher coverage, in turn, means you will be able to capture a wider variety of feedback from varying use cases.
2. Organize SaaS feedback
Organize the SaaS feedback you have captured into a centralized space. Find a filing system that works for you — this data is important for decision-making, so it should be readily accessible and traceable. If you have feedback sorted by category or project, or theme, it will be easier to take action and distribute work to relevant teams.
Organizing will also help you prioritize the most pressing topics of feedback that you should attend to on an immediate basis.
In the long run, it can also help you identify if all pieces of feedback were attended to, if follow-up communication was made, or if further complaints have emerged on the same features.
3. Communicate with customers
While you are busy coming up with solutions based on the feedback you have received, you should simultaneously close the loop with the customers by acknowledging that their feedback has been noted, informing them of the solution you are coming up with, and telling them the order of priority. When you finally release the solution, reach out to them separately to share that you have been responsive to their needs as valued customers and acted on their feedback.
Even if a particular piece of feedback is not being incorporated, you should communicate that to the customers with reasonable justification and alternatives.
4. Strengthen organizational cross-communication
Silos need to be broken down if you are to close customer feedback loops. Customer success teams need to work with development teams, marketing teams, internal communication teams, and leaders. Everyone should be updated on the messaging being sent out to customers.
5. Closing SaaS feedback loops is an ongoing process
It may seem like an oxymoron, but closing feedback loops is a continuing process; you close one feedback loop and then hop on to another one. Tell the customers that their feedback was acted upon so they will feel more confident using the product. This will also give them more confidence to share quality feedback. Initiate new feedback loops by inviting them to share their thoughts on the new version of the product.
Bottom line: Customer-Centric Companies Close the Loop
If you are a SaaS company, customer feedback is like a goldmine for you. But you need to dig in to find it, separate the dust from the gold, and then polish it before you can put it to use. That's the organizing and prioritizing part of your feedback loop.
Then, you can use this gold in your products to make them shine and be valuable. Once the customers notice the gold on your product, it will enhance stickiness and retention rates due to its immense value. It also signifies that you care about delivering value to your customers a competitive advantage. It makes for a superior customer experience, and in the SaaS world, that can be a game-changer.
No SaaS business can grow without satisfied customers who know they are being heard. Feedback loops are also an integral part of a lasting relationship with enterprise customers. If someone is left with a bad experience with a product and has no way of communicating that to you, they will not want to renew or commit to your software product, even if your product is the right fit for them.
A feedback loop is also a method of gathering customer sentiment leading to robust data-driven decision-making, which is another healthy practice all organizations should adopt. These are among the best protocols to implement in your customer experience cycle. And the best part? Feedback loops aren't hard to implement and close.