Direct and indirect signals are two types of customer feedback that help businesses understand customers, meet their needs, and drive customer satisfaction, loyalty, and retention, along with overall business performance.
Customer experience (CX) influences how customers feel about a brand and whether they become repeat customers, ultimately shaping customer loyalty and retention.
While positive experiences give businesses an advantage, negative experiences give the competition a leg up. In fact, a study found that 65% of consumers say that negative brand interactions motivate them to consider switching to a competitor.
The challenge is, many businesses lack both a clear picture of the type of customer experience they’re offering and insights into steps they can take to improve the customer experience. That’s where customer feedback comes into play.
Customer feedback helps companies understand their customers and measure customer sentiment, which is used to enhance CX. In addition, the vast majority of customers want the chance to provide feedback about their experiences. 73% of consumers want to be given the option to share feedback about their experience after a customer service interaction.
Savvy organizations leverage different types of customer feedback from across channels and customer interactions to ensure customers feel heard, uncover customer needs in the moment, and improve customer experience.
Direct feedback and indirect feedback are the two most important types of customer feedback that every organization should collect and analyze, sourced from the customer signals attached to touchpoints and interactions throughout the customer journey.
Within these types of customer feedback, the data gathered falls into the category of structured data or unstructured data.
Let’s explore direct feedback, indirect feedback, structured data, and unstructured data.
Everyone knows direct feedback — it’s been around for decades. Paper surveys and physical comment cards for reviews were the earliest formats. Today, it’s much more vast thanks to technology.
Customer feedback is now provided directly to a brand through countless channels. Surveys still exist and are distributed through emails and text messages, but customers are empowered to also share what they think and how they feel through videos, crowdsourced ideas, and more. It’s taken CX to the next level for the top brands in every industry.
What’s the differentiator for direct feedback? Brands specifically reach out to customers to provide this type of customer feedback, so the intent to obtain their perspective is clear to each customer.
Indirect feedback is unsolicited, meaning it’s composed of signals in which customers weren’t asked a question or given a dedicated channel to provide feedback. This often takes place in channels such as online review platforms, social media comments and mentions, and contact center calls, emails, and live chat sessions.
Information and activity from an organization’s customer relationship management (CRM) platform, point of sale (POS) system, visit patterns, event data, and digital experience analytics all fall under indirect customer feedback as well.
Structured data is quantitative data that can be categorized into a certain field in a database or spreadsheet, and includes things like multiple-choice survey responses, ratings, customer demographic information, transactions, and more and is used to help organizations evaluate their customer experience.
Unstructured data is qualitative data drawn from unstructured sources — think strings of text, such as the responses to open-ended survey questions, social media comments, online reviews, contact center call logs, emails, and live chat transcripts.
Artificial intelligence (AI)-powered text analytics and speech analytics can be used to analyze and assess the meaning of large volumes of unstructured customer feedback data at scale to reveal common topics, insights, and trends hidden among these customer interactions.
Customer feedback is crucial for a customer experience strategy. It’s the clearest indicator of what customers are saying and how they’re feeling. With it, a brand knows its biggest opportunities — and challenges. Without it, a brand disappoints customers and their loyalty shifts to the competition.
Here are the reasons why customer feedback is important:
1. Identifies areas for optimization: Customer feedback helps an organization identify where products and services are falling short of expectations. By listening to feedback, a brand transforms challenges into opportunities driving the business forward.
2. Enhances customer satisfaction: When organizations take customer feedback seriously and make changes based on it, the brand achieves greater customer satisfaction. Customers feel valued when their opinions are heard and acted upon, which leads to increased loyalty and repeat purchases.
3. Unlocks a competitive advantage: Consistently collecting, analyzing, and acting on customer feedback allows an organization to create personalized experiences for each and every customer. Brands that listen to customers are less likely to face a tidal wave of customer service inquiries and are more likely to attract (and retain) customers over time.
4. Increases revenue: By using customer feedback to improve customer experience and delight customers, brands increase sales revenue.
5. Inspires product development: Customers know what they want, and a brand finds that out in customer feedback. Once it’s obtained, organizations leverage the insights to either improve existing offerings or introduce entirely new ones.
CX professionals recognize the importance of customer feedback and use it as motivation to plan and launch a successful customer experience program.
Brands across industries rely on customer feedback to improve their products and services, innovate, and keep customers coming back. Collecting, analyzing, and acting on different types of customer feedback helps companies improve customer and business outcomes, from customer satisfaction and loyalty to longer-term sustainable revenue gains.