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When Closing the Loop Just Isn’t Enough to Preserve Customer Loyalty

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There are few things more disheartening for a customer than feeling that their feedback is falling on deaf ears.

Recognizing this, many companies make a point of following up on customer feedback when something goes wrong. Some simply apologize or try to placate the customer with discounts and refunds. Some try to actually fix the problem at hand. Either way, the logic goes that by showing customers you’re listening to their feedback, they’ll be more likely to forgive you for your mistakes.

But what happens when you just treat the symptoms and not the cause of the problem? What happens when, after the apology, the problem just keeps on happening, and customers have to complain over and over again?

You may quickly find yourself with customers who are more frustrated than if you’d ignored their feedback in the first place. That’s why the most dedicated companies have a system for not just responding to customer complaints, but actually resolving the root cause of the problem.

Rob Markey and Fred Reichheld of Bain & Company developed a concept to describe this process: the inner and outer circle, or inner and outer loop. In this system, the inner loop includes the activities typically associated with “closing the loop” — sharing feedback with employees and following up with individual customers to resolve their problems. Meanwhile, the outer loop brings those activities onto a broader scale. To start, companies use insights from aggregated feedback to determine why a certain problem keeps happening and drive a systemic fix. Then they communicate the solution to customers — or the entire market — in order to show that their feedback resulted in meaningful improvement to the business.

Company leaders play an important role as well. Customer experience teams can use feedback to identify the reason behind recurring customer pain, but without high-level support, they won’t be able to plan, finance and execute the organizational, training or process changes needed to solve these root causes. Of course, gaining this buy in becomes easier when executives have access to continuous streams of customer insights that are tailored to their specific roles. The earlier they’re able to see the impact of a problem, the more willing they’ll be to help solve it.

Executives can also help close the outer loop by communicating to customers that an improvement has taken place. When an executive — as opposed to a customer experience professional — takes the time to acknowledge customer feedback and describe its impact, customers see that the entire company really does care about their perspective.

In order to facilitate this process, we’ve just released Medallia Resolve — a new product bundle that helps companies gain the insight they need into recurring customer issues to close the outer loop. And to celebrate the release, we’re hosting a webinar with Rob Markey himself on outer loop best practices. Use the form to the right to join us!

Photo credit: Susanne Nilsson