George Baker, Sr. is the founder and Managing Partner at 2 the Moon Ventures.
At the most basic level, startups are designed to turn ideas into products or services. To be successful, all startups need to understand the needs of the end user—the consumer.
This concept seems simple, but failing to listen to customers is one of the most common mistakes companies make. They build amazing things with advanced technology that don’t fill a real need or solve a real problem.
CB Insights does a regular post-mortem on the cause of startup failure and while the reasons vary slightly by year, “no market need” is always in the top few.
How does that happen? How do you create a product that nobody wants? The answer lies in focusing too much on the product and its features and not enough on the customers who will use it.
No matter what stage your product is in, customer feedback is key. Companies need to include customer feedback in the development process at every point along the way.
A good feedback loop is essential for identifying unmet needs, discovering new opportunities and modifying existing offerings. A good feedback loop can allow an agile startup to topple market leaders. In today’s world, the winners are the leaders who listen to their customer base.
Customer Feedback: Start At The Start
Startups tend to be good at upfront market research, but for many, that’s where listening to the consumer starts and, unfortunately, sometimes ends. Most startups begin with a minimally viable product (MVP) or prototype that represents the first opportunity for feedback.
The first iteration of a product represents the chance to understand customer pain points, use cases and unmet needs. At this point, feedback can come from requests for features, behavior tracking or even customer advisory boards.
Customer feedback provides anecdotal and quantitative data that startups can use to make decisions about future features, enhancements and the overall strategic direction. When companies integrate this data into the innovation cycle, they create future iterations that better meet customer needs.
It’s Called A Loop
Customer feedback is more than just listening to your customers. It’s called a loop for a reason. You have to turn their input into action and then further solicit feedback to understand if you were successful and identify new opportunities for innovation.
If you Google it, you can find many slightly different iterations for the customer feedback loop. Some have four steps; others have five or more. Some look like circles; others are figure eights.
Regardless of the number of steps or the image, they all boil down to requesting and collecting feedback, analyzing the feedback, taking action, updating customers and then starting again at the beginning.
If you successfully close the loop with customers, you will build loyalty and increase your customer retention. And this, too, is a loop. The more appreciated and heard your customers feel, the more likely they are to provide you with valuable feedback.
Feedback Loop Creation
There is no one-size-fits-all approach to gathering customer feedback. The best channels to collect feedback will depend on your business model.
Some channels involve actively collecting data through surveys, feature requests or comment cards and direct customer interactions like user testing or interviews. Others are more passive collection methods, such as social media listening, tracking customer reviews on third-party sites and tracking incoming customer support requests.
Once you compile the data, many tools are out there to help you sort through the information. Regardless of the tool, the goal is to look for patterns and opportunities.
As you seek to make changes, look for quick wins, but don’t ignore the big picture. Smart companies use the data to make changes to their product road maps.
Finally, let the customer know you have heard them and what you are doing about it. Nobody likes to scream into the darkness. When you close the feedback loop, you generate goodwill, increase trust and boost customer satisfaction.
Don’t rely on ad hoc customer feedback opportunities and projects. Create a standing system with multiple channels to hear from your customers and a standard data analysis plan. Similarly, define procedures for integrating feedback into your innovation process and keeping customers updated.
Successful companies are the ones who can listen to their customers and turn those insights into action. It’s a win for everyone as you evolve your products and fill your customer’s needs.
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