Understanding and Implementing an Effective Customer Feedback Loop for SaaS Companies

Introduction 

In 2018, I was heading a 15-person customer-facing team in a rapidly growing SaaS company. And just like many companies, we were struggling to scale and hire new talent.

One of the company initiatives to respond to this situation was to deploy a tool to help automate part of our onboarding. The idea was to remove some noise from my teams while we would hire and train new people.

I spent several nights setting it up and learning how to coach my team to use it – just so we could focus on other areas that needed our attention.

We found tons of value in the solution, and we happily used it for over 8 months.

It was like my team got multiplied by 4. Literally.

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Now, at some point, our process evolved. But sadly, the system didn’t follow.

For instance, we needed it to have a much better level of sync with our CRM. But when we shared our needs with one of the company representatives, the only answer we could ever get from them was:

"Yes, we know our system needs improvements in this area, I’ll make sure to share your feedback with our product team. Thank you.”

The pain was clearly on its way to becoming unbearable.

So we tried to find a solution on our own.

First, we did the work manually. Then we tried a few workarounds. But the problem was ever-growing, and eventually, we decided to look for another tool that would do exactly what we needed it to do.

1 ½ years after we started using a solution that 4X’ed our productivity, we were migrating to a competitor...

But if you think that’s bad enough…

A few months later I moved to a new role, in a new company. And because we had a similar problem there, we also decided to implement a new process and find a tool to help us.

Which solution did we select? Well, I had no time to benchmark the dozens of tools available on the market. So I just picked the last one I used. Because I remembered the first one wasn't flawless and would slow us down later on.

Ok, now comes the worst part. Bear with me some more.

The feature we desperately needed was released 3 months after we dropped the first solution for the new one.

It was being worked on when we decided to migrate. But no one knew it. Not us nor the company representative.

What it also meant was that it was already up and running the next winter, when we selected a similar tool after I’d joined my new role.

I just wasn't informed.

And yes, here it comes:

With a functional customer feedback loop, this would never ever have happened.

So what is a customer feedback loop exactly?

The easiest way to describe a customer feedback loop is to think of your company as a biological system. 

In nature, all species use their biological feedback loop to adapt.

Some animals evolve to the point that they’re able to survive in space, under highly pressured environmental conditions, or under temperatures that would be considered lethal for most other species.

And like animals that evolve to changes in their environment, every company’s product has to evolve to changes in the market.

Imagine this scenario for a second.

The very first time I decide to share feedback about my evolving usage, the company representative records it and identifies me as interested in this proposed new feature. Or, they point me to an idea board where I can upvote or submit a feature request.

A few days or weeks later as the product team processes my feedback, I’m informed it was acknowledged and can be asked a couple of additional follow-up questions for more context – by email, phone, live chat, etc.

Several weeks before I would otherwise start to look for alternatives, I receive a personalized email notification telling me the long-awaited feature I requested is now being worked on, and the team will keep me updated as soon as it’s available in beta.

That's a customer feedback loop in action.

And that's how easy it is to retain a perfect-fit customer with it.

How is a customer feedback loop beneficial for your company?

Get a reality check 

Even if you’ve already planned to build a certain feature, it’s still time to collect feedback about it. Why? To make sure your team is building exactly what your customers need before you actually roll it out.

Your roadmap should not be set in stone. A certain level of flexibility is required, and having something planned does not mean you should stop caring about its relevance. 

It’s even quite the opposite. Requirements and expectations can evolve quickly, and something that was relevant and planned for last year might have lost its value since. 

Boost user retention

In a world where there’s less product differentiation, SaaS companies average at least 9 competitors, and CAC has increased by 50% in recent years, acquiring a new customer requires a lot of resources. 

At some point, it doesn’t matter how many new customers you onboard every month, if you’re suffering from leaky bucket syndrome and losing twice as many. 

Death by a thousand cuts is what lays ahead if you stop paying attention to what your existing customers are asking for, and who’s requesting it.

Provide upsell & cross-sell opportunities 

If you have several products or offer various product plans, the customer feedback loop offers the opportunity to sell more to your existing customers, after you’ve “already paid” for the acquisition cost. 

Every time you add a valuable feature to a higher subscription plan, you entice clients that requested it to upgrade. That’s more money for you, and more satisfaction for them!

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Increase user engagement  

People know you care when you give them news. It’s true in life and in business. 

How many times have you provided feedback to a company, when you know all that really happened was…

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With a customer feedback loop, it’s different. You can now prove to your customers their feedback has been delivered to the product team, and give them the feeling that they’re part of the product strategy.

If the first time you gave feedback you never heard back from anyone, how would you feel about giving feedback again?

Now contrast that with how you would feel if you knew exactly how and when your feedback was processed, along with its status and ETA.

In the second scenario, your likeliness of giving further constructive feedback is much higher since you weren’t kept in the dark the first time.

While in the first scenario, you might just never give any feedback ever again and switch to another solution before anyone could do anything about it.

Improve operational efficiency 

A well-orchestrated feedback loop allows you to avoid wasting time exploring less relevant or less beneficial features and functionalities.

Instead of funneling your scarce resources into building features that aren’t actually in much demand from your users, you can turn your product team into a factory that pumps out best-selling products.

How can I set up a customer feedback loop?

Build a customer feedback culture in your company

For some businesses that adopt a product-led growth approach at an early stage, feedback is already part of the company culture.

But in most other cases, you’ll need to demonstrate to your team the value of engaging customers to leave feedback one way or another. 

The easier it is for your team or customer to record feedback, the more, and more structured feedback you will get (via a live chat conversation for instance).

And if your users know you care, they’ll be more likely to speak up.

This is true for your teammates too. If they know your company has customer feedback sequenced into its DNA, they’re more likely to care about it which helps you to drive the product and sort your backlog in a more effective way.

Identify your users 

You need to make sure that you know who’s providing feedback and get their consent to follow up.

Why? Because once you know this, you can ask more precise questions when the time comes to work on the functionality they requested. Conducting a customer interview to understand how you could build their proposed feature to fit their requirements and understand the problem they’re facing is a must.

And there’s another cherry on the cake too.

Now that you know who’s requesting what, you can make even more educated decisions about the features you want to prioritize. 

What type of features are your Fortune 500 customers asking for? Is it related to Quality? UX? Something else? 

These kinds of answers bring a lot of clarity, especially when you're evolving in a resource-constrained environment.

Be personal

The best way to improve the feedback experience is to be personal. 

But hold on! You don't need to start manually writing emails to your 3,000 customers just yet… 

At least, not when you have ProdCamp! 😉

ProdCamp isn't the only feedback tool on the market, but it makes it particularly easy for your customers to leave feedback. For instance, all your Gmail users can be automatically identified with Google Single Sign-on. 

While our in-app feedback widget or Intercom integration will automatically recognize users and allow them to provide feedback without leaving your app.

With ProdCamp leaving structured feedback is just one click away from any conversation.

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No surprises, but if you really have a hard time deploying a customer feedback loop, it might just be because you don't have the right culture, processes, or tools in place. And that's something we can help with.

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Your changelog will do the job 

A personalized email notification is a great way to keep your clients up to date regarding the evolutions of your product and service. 

But having a well-curated changelog inside your application or on your website is a great way to communicate back with your customers. 

You’ll ensure no one misses an important update that could turn a deal from lost to won, trigger new subscriptions from an existing account, or bring to light a huge game-changing innovation that no one else has ever done in the industry.

If any of these critical improvements are happening and your team or customers don't know, you're potentially leaving a bunch of happy customers on the table.

And a shared idea board or lean product roadmap too 

While a changelog tells your customers or teammates what was recently released, it doesn’t give them any information about what your future plans are in terms of new functionalities or product improvements. 

But an idea board or a lean product roadmap does. 

With one of these, you can verify if what you’re planning truly resonates with your customers’ needs. Moreover, you can get more qualitative feedback about the way your customer would like to see this new functionality implemented.

And that's only a couple of the many benefits of an effective customer feedback loop strategy.

Collect NPS

Net Promoter Score is a way to balance quantitative and qualitative data. Some customers will be happy to provide insights about their experience and what could be improved whereas some others will be willing to give you only a score on how they treat your product and your relationship. Incorporating NPS into your feedback loop will help you notice if something is not right and fix your product or service before customers churn.

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Go one step further 

For the customer feedback loop to be effective, you can't stop at the classic survey solution flywheel; gather, learn, apply.

You need to go one step further and INFORM. Otherwise, you're totally missing the point.

Keeping your customers in the loop is key to building a community around your product. And when you do it, the quality and volume of the feedback you receive will only increase over time – as well as the engagement of your customers.

To foster customer engagement and turn feedback into revenue, it’s critical to keep people engaged and validate your assumptions as much as possible before investing the time and energy of your team.

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And further

Sometimes feedback comes in various forms of complaints. Handling customer complaints is a critical part of any customer-facing team's responsibilities. It is essential to listen to the customer, acknowledge their issue, and work towards a satisfactory resolution. Companies must have a process in place for handling customer complaints, including clear channels for customers to provide feedback and receive updates on the resolution. Effective communication is key, and it is vital to keep the customer informed of any progress or updates. Taking ownership of the issue and showing empathy towards the customer's situation can go a long way in resolving the complaint and retaining the customer's loyalty. Companies must view customer complaints as an opportunity to improve their product or service and ensure that similar issues do not arise in the future.

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Want to learn more about how ProdCamp can help you deploy an effective customer feedback loop in your organization in a few minutes? 👇