Customer Feedback Programs Best Practices: An Empirical Investigation

Improving the customer relationship is seen as the key to improving business performance (Ang & Buttle, 2006; Reinartz, Krafft & Hoyer, 2004). In the course of this endeavor, popular business strategies emerged that have shined a spotlight on the importance of understanding customers’ attitudes, expectations and preferences. Customer-centric business strategies, such as CRM (customer relationship management) and CEM (customer experience management), focus on managing customers’ attitudes about their experience, fueling the proliferation of customer feedback programs (CFPs).

Customer feedback programs (CFPs) reflect a variety of types of customer programs where formal customer data are collected on customers’ perceptions and satisfaction programs, customer advocacy programs and customer loyalty programs. This study was designed to identify best practices regarding customer feedback programs.
 
A web-based survey was used to collect information from 112 customer feedback professionals on their company’s CFP. Survey administration was conducted using a Web-based survey tool provided by GMI (Global Market Insite, Inc.).  Respondents were provided by CustomerThink.com and through the author’s professional network.
 
CFP Best Practices
Widely used (adopted by 80% or more) CFP business practices by Loyalty Leaders (companies whose industry percentile ranking of customer loyalty was 70% or higher) are located in the top half of Table 1 (in descending order of adoption rate).

 
Additionally, customer loyalty percentile rankings and satisfaction with CFP in managing customer relationships were compared for companies who adopted a specific CFP business practice and companies who did not. Results (see Table 1) showed that companies who adopted specific CFP business practices, compared to companies who did not adopt the business practices, had higher customer loyalty percentile rankings (17% difference) in their industry and higher satisfaction with CFP in managing customer relationships (1.5 difference on a 0 to 10 scale).

Applied research helps companies gain superior customer insight through in-depth customer-centric research. This research extends well beyond the information that is gained from the typical reporting tools offered through survey vendors. Applied research can take the general form of linking operational metrics to customer feedback data. Additionally, research can also take the form of linking other constituent’s attitudinal data (e.g., employee, partner) with customer feedback data. Companies that conduct this sort of in-depth research gain the knowledge of how to better integrate the customer feedback into daily processes.
 
Executive support and use of customer feedback data as well as communication of the program goals and the customer feedback results helps embed the customer-centric culture into the company milieu. Executive use of customer feedback in setting strategic goals helps keep the company customer-focused from the top. Additionally, using the customer feedback in executive dashboards and for executive compensation solidifies the importance of customers as a key business metric. Sharing of the customer feedback results (as well as results of applied research) throughout the company helps ensure all employees are aligned with top management’s view regarding the importance of the customer in daily operations.
 
The combination of a rigorous applied customer-centric research program, top executive support and use of customer feedback results, and the communication of program goals and results are key ingredients to a successful customer feedback program.
 
You can find the free executive summary here. For more information about Customer Feedback Programs Best Practices study, please contact Bob Hayes at Business Over Broadway.