Closing the Loop

Close that Loop!

Thursday, May 16, 2013

Last week I wrote about the importance of having survey data that is not just actionable but trustworthy. When data is not trustworthy, company leaders and employees will not use them to take any actions. It will be a futile exercise of not only costing the company but also creating negative perception among the customers.

Today, we will explore why taking action based on the survey data is key in ensuring an effective Netpromoter or any customer survey program.  Listening to customer and measuring alone is never enough to make any meaningful impact on the business. It is the follow up that retains customers in a competitive market.

When you ask customer for feedback, you are already setting an expectation that you will act on those feedback. Customers invest their personal time to provide feedback and will expect to see good outcome of that investment. A survey may stand to create more harm on customer loyalty when their feedback is not followed through with a closed-loop process. Closing the loop is essentially about communicating back to customers on intended actions to be taken based on their feedback. 

The closed-loop process is a differentiator for the Netpromoter® approach. Since this approach asks a very short survey questions, closing the loop with a follow-up with customers gives you good data to do root cause analysis on customer’s grievances. Closing the loop also provides you and your team leaders greater visibility of the state of customers’ relationship. It provides a good sense of customer’s desire and fear about doing business with you.

What makes an effective closed-loop process? There are several areas that need emphasis in creating an effective closed-loop process. Below are some of the areas that Netpromoter approach champions:

What:

Closing the loop is not just about following up with customers. It is first about sharing the feedback with the employees that are most responsible in making the customer create such feedback. While it is important to share the negative comments, it is even more important to share positive comments that inspires employees to work towards better customer service. While positive comments could be a moral booster to your employees, the negative comments could be a great source of learning and improving.

When preliminary cause of a negative feedback is established by sharing and investigating with relevant employees, closing the loop with customer will be a more meaningful engagement. The follow-up may not always need to be on a one-on-one meeting or phone calls. Depending on the type of business and customer segments, the follow up could be in the form of email, newsletter or website updates. While it need not be a personal follow-up, the general follow-up should at least be able to reach to the intended customers effectively.

When: 

Once customer provided the feedback, clock starts ticking. Customer invested time and effort in providing feedback about your company and now awaits your response. No-response or very slow response creates a poor impression about your company.  As said earlier, this will create more harm than good to improve your customer loyalty.  Loyalty leaders usually close the loop of un-happy customers (Detractor) within 2 days. This culture of acting fast on customer’s feedback rewards the company handsomely through creation of more Promoters and less Detractors. It is no wonder why these companies consistently on growth trajectory. 

While it is possible to track the responses and follow- on customer surveys manually, but when business becomes more complex, managing a timely response could be a challenge. With real-time systems such follow up and monitoring of response time could be managed easily.

Who:

 This is an important aspect. The person to close the loop with the customer, especially if it is a one-on-one follow up, requires someone who is empowered to make at least minor changes. The last thing an annoyed customer needs is for someone from the company to call him but not able to solve his basic problem. Ideally, a branch manager, team leader, site manager, account manager or someone that should have the authority to solve operational issues will be a good candidate to close the loop with customers. 

One of our clients assigns their club General Manager to close the loop of Detractors of a health club.  The club General Managers review feedback on a daily basis and allocate specific time every day to call the Detractors. The effect was stunning. Not only the General Manager gets first hand information about the customer satisfaction, they become better coach in facilitating the effective learning with their employees in the club.

In a B2B environment, say if a C-level executive of a key account responds with a negative feedback, it is wise for a C-level individual from your company to close the loop.  For all other level of customers, an account manager or director will be a good choice for a follow-up. Sometimes top management could have a one-to –many sessions with the customer respondents on the analysis of the customer feedback and what the company intends to do based on these feedbacks.

Which:

Which customer do you target to close the loop? The Detractor, Passive, Promoter or non-respondent. It depends on what customer strategy that you have or plan to develop and the capacity of your company. If you have a large customer base, typically in a B2C sector, you may want to target to close the loop first with Detractors. This will help you understand the root cause as to why they became a Detractor. 

Your company also needs to build the capacity to be able to close the loop with these Detractors with speed. It is understandable that companies starting up with this program may not have the resources to do a personal follow up with each Detractor. In such cases, either you could do a one-to-many follow up (again depending on the customer, environment etc) or try closing the loop with ‘super-Detractors’ – customers who are extremely un-happy with you.

You may also follow up with Promoters to understand best practices that could be replicated to other customers. Some companies ask Promoters to help them provide input in designing new products, as Promoters are people who want to see your company grow. Promoters could be a good source of reference as well, especially in a large and complex business.

How:

Closing the loop is not hard to do. But you will find that employees inherently don’t like to capture and document follow-ups. It is mainly due to the complexity in doing this task. In order to get better participation of employees, companies may want to design simple close loop process that is easy and effective in meeting its intended goals.

With a simple process and constant coaching, the ‘owner’ to close the loop will be motivated to follow up with customers and understand the root cause of issues raised by customers. 

It does not end with the follow-up. Upon closing the loop, there are two areas of improvement a company would normally take up. The corrective action or immediate and specific action to resolve a particular customer’s grievance is usually done immediately as a tactical measure. Next, using common theme of customer issues, a company could develop preventive or long-term plans, which is sometimes called horizontal development to avoid similar issues in the future. The latter may need the top management’s involvement as it may require investment.

When you survey a customer, you are opening a loop especially when a customer has an issue. The sooner you close the loop the better the impression they have about you and your company, but it needs to be thorough and effective as well.

Satya Narayanan