To understand why customer feedback is vital for any business, you have to look at the foundations of the market economy. The free market is made up of producers and consumers. In the dimension that interests us, companies are producers while individuals and other companies are consumers of goods.
To reach success in such a competitive atmosphere, a producer must follow the rules of supply and demand. Moreover, his product, be it shoes or consulting work, has to be well received by the consumers. It is at this point that customer feedback takes shape, companies begin by studying the needs, wants and reactions of the consumers.
To best satisfy customers and acquire a larger market share, a producer has to ‘listen’ to them. If this is the general framework, the following list will take a closer look at why customer feedback is essential.
1. Improves Your product
Company X offers product Y to the consumer market. If sales disappoint, a proper response from the part of the company is to take into consideration the customer feedback. By doing so, the faults of the product can be easily detected and fixed, leading to a higher overall quality.
Aside from improving the product, listening to customer feedback is also an effective method of evaluating your team. For example, with online employee information available, customers of the service industry can easily rate your employees based on their performance.
2. Establishes A relationship
Customer retention and fidelity is the welcomed by-product of a good customer relations policy. Satisfied that they have been listened to, customers will remain faithful to the products they helped shape and mend. Moreover, the company will receive good PR – the kind that cannot be bought with a media campaign.
3. Puts You Ahead Of Competition
No matter what you do, your product may not always be the best and your ideas might not always be the most innovative. Even when such is the case, a larger company might outspend and outproduce your capabilities, selling at a price which would put you out of business.
As bleak as this situation may appear, listening to customer feedback can still provide the solution. As the market is always changing and the trends are always shifting, staying ahead of the curve can put you ahead of the larger companies in terms of understanding the preferences of customers. Aided by a good relationship, your customers may even prefer your product above others for personal, emotional reasons that don’t relate to product quality.
4. Uncovers Market Trends
Aside from improving your products and the opinion that customers have of your company, listening to customer feedback can also provide valuable data regarding future trends. If the focus of the consumer is pinpointed on a single feature of the product, you can use that information to increase your efforts in that area.
For example, if a smartphone producer discovers that customers use his phones especially for the qualities of the camera, he will seek to produce a phone with an even better camera, securing and expanding his market share.
5. Creates Associations
Most of the time, people do not buy with their heads, but with their hearts. Associating a product with a friendly face or tone anthropomorphizes it. In the same fashion, bad customer feedback means that customers are associating your products with bad service; something called “negative bias”. A good customer relations policy is a marketing campaign in itself as it promotes the image of your company as responsive to its customers.
Hopefully, these five reasons are enough to convince you to always take into consideration the input of your clients. By doing so, you will benefit from a number of advantages that take you one step closer to success.