What is Feedback Looping? Its Importance, Examples, and Impact

Imagine you’re a contestant on Masterchef Australia. You’ve invented a new dish, and you’re proud of your creation – rightly so! But the only way to know if the dish is good is to let the judges taste it. That’s the first step in feedback looping.

What do you mean by feedback looping?

A feedback loop is a cycle in which the results of an output are used as input for further action.

Confused? Let’s return to the example above.

1. Serve the dish (output): You present your creation to the judges.
2. Get feedback (input): They tell you it’s a bit bland, the potatoes need more seasoning, and the chicken could be crisper. This is your input for action.
3. Refine the recipe (action): Based on the feedback, you tweak the recipe. Maybe you add extra spice or increase the cooking time.
4. Cook again (new output): You make the dish again, incorporating the feedback.
5. Get more feedback (new input): This time, they love the flavors and texture. But it would be great if you could add a dash of olive oil or butter…

..you get the picture.

Feedback looping has its roots in control theory, which was used to ensure that systems behaved as they were expected to. Over time, the concept was applied successfully to various fields; there are feedback loops in aircraft, shipping, pharmaceuticals, robotics, public utilities, and more.

What is feedback looping in customer service?

In CX, a feedback loop is the process of collecting, analyzing, and implementing customer feedback to improve your customer experience. It’s not a one-time event, but a continuous conversation between your brand and your customers.

Need an example? Think of a pet food store.

• They want to compare the shopping experience for cat owners vs dog owners. So they deliver personalized surveys to each group.
• After analyzing the feedback, they make changes to enhance the navigation, improve the product range, and enhance product suggestions.
• Next, they close the loop. That means they communicate with the customers about the changes they’ve made, the actions they’ve planned, and any interesting insights they had.
• This refines the shopping experience, and restarts the feedback loop.

Why Feedback Looping is Essential for Your Business

1. Trust Builder

If you’ve ever interacted with a business that ignored your feedback, you know how it feels – like talking to a brick wall. In fact, 63% of customers would switch to another brand after this experience.

Closing the loop (which is the part of feedback looping that customers are able to see) shows you care about what people say, and you’re working to improve. Over time, this builds trust.

2. Credibility Booster

Feedback loops need action because that’s the only way you can close the loop. But when people see visible improvements in your product, service, and culture, they also know you value their feedback. This applies to customer and employee feedback as well.

It also sets you apart from competitors who ask for feedback but don’t act on it.

3. Happiness Machine

According to Capterra, 74% of companies have amped up their CX investments. Now why would they do that?

The numbers say it all. Two-thirds of customers will become repeat customers if they feel valued. On the other side of the coin, teams that feel valued show a 21% increase in profitability. After all, great CX is dependent on the EX.

4. Bandwagon Builder

A few years ago, no one could have imagined that AI would become like Watson to our Sherlock.
The business world is constantly changing. Feedback loops help businesses understand what customers want now, and in the future.

This allows them to adapt quickly, innovate successfully, and stay competitive.

Types of Feedback Loops

1. Negative Feedback Loop

A negative feedback loop is the cycle of turning customer or employee complaints into improvements. These loops help to find problem areas and spot issues before they escalate further.

Here’s how it works

• Problem: Get critical feedback, either directly or indirectly about your brand.
• Resolution: Respond to negative feedback by addressing the issue, providing a solution, or offering compensation.
• Improvement: Analyze the data and get valuable insights to refine your products, services, or processes.

2. Positive Feedback Loops

A positive feedback loop starts when a customer or employee shares a great review about the business. These loops help to reinforce positive action, and encourage repeat business.

Here’s how it works

• Appreciation: A certain action leads to customer or employee appreciation.
• Recognition or reward: This leads to recognition by the brand. In CX, this usually takes the form of social proof, loyalty programs or special rewards for the customer. In EX, this usually takes the form of awards, rewards or job advancement for the employee. This motivates them to continue giving high-quality service.
• Replication and scaling: Based on the learnings from this feedback loop, a business can replicate and scale successful strategies.

Positive vs Negative Feedback Loops: Examples + Tips to Boost their Impact

Customer Experience

Example 1: Customer Service

	Positive Feedback Loop		Negative Feedback Loop
Action	You visit a coffee shop where the barista remembers your name and your favorite drink.	Problem	You call a company’s customer service and are put on hold for an extended period.
Appreciation	This makes you feel valued and appreciated. So you visit more often.	Resolution	You share your experience on Facebook. A company representative contacts you to discuss the issue.
Recognition	Your increased visits are noticed by the staff. They continue to give you personalized service, boosting your overall experience and loyalty.	Improvement	They take action to fix the issue. They also initiate procedures to make sure this doesn’t happen again.

Example 2: Customer Loyalty

	Positive Feedback Loop		Negative Feedback Loop
Action	A retail store offers a loyalty program where you earn points on every purchase.	Problem	Your preferred online retailer frequently ships late. You become frustrated and start ordering less often.
Appreciation	As the points add up, you get special offers, encouraging you to shop more.	Resolution	Your reduced activity triggers a follow-up email or survey from the company. You use this to inform them of the issue.
Recognition	This leads to more points and rewards – creating a cycle of positive interactions and more spending.	Improvement	They take steps to speed up their shipping – such as opening more warehouses or onboarding local sellers.

Tips to boost their impact:

• Let the customer know how much you appreciate their business. You can do this through a follow-up email, a quirky message, or even a handwritten ‘thank you’ note.
• Share the love with your team. Positive feedback is an incredible morale booster.
• Use all the feedback as a learning tool. Then use these insights to train new team members.

Employee Experience

Example 1: Employee Performance

Action: A marketer who consistently performs well gets the Best Performer award.ProblemA junior HR executive is facing challenges at work and gets little to no support from his manager. This affects his job performance.

	Positive Feedback Loop		Negative Feedback Loop
Appreciation	This boosts her morale, leading to even better performance.	Resolution	He has a 1:1 with the HR Manager, where they are able to openly discuss his challenges.
Recognition	This creates an ongoing cycle of recognition and high performance. The result is high job satisfaction.	Improvement	They jointly create a strategy to tackle the challenges, and he finally gets the support he needs. This improves his morale and performance.

Example 2: Employee Development

	Positive Feedback Loop		Negative Feedback Loop
Action	ACME Corp offers continuous training and development opportunities.	Problem	Jane, a SEO analyst at ACME Corp, is consistently overloaded with work and has no time for upskilling. She’s unprepared for Google’s new algorithm update, which cuts her company’s traffic by half.
Appreciation	Employees who take advantage of these programs improve their skills and job performance.	Resolution	Jane’s supervisor does a quickcheck-inwith the team. Based on the feedback, she has a 1:1 with Jane.
Recognition	This leads to their career advancement and job satisfaction. It also encourages other employees to sign up.	Improvement	They discuss the current workload and find out ways to streamline it so that the team has time for upskilling.

Tips to boost their impact:

• Amplify positive experiences.When employees give glowing feedback, share it! This reinforces positive behaviors.
• Respond promptly. Don’t let negative feedback fester.
• Address the root causes. Acknowledge the issue, apologize for any inconvenience, and explain the steps you’re taking to address the problem.

Product Experience

Example 1: Product Updates

	Positive Feedback Loop		Negative Feedback Loop
Action	A software company regularly updates its product based on user feedback.	Problem	The product has a buggy UI that frustrates users. This leads to poor reviews and lowered usage.
Appreciation	Satisfied users spread the word, and provide more constructive feedback.	Resolution	To make the necessary improvements, the company surveys its user base.
Recognition	This leads to further improvements, and a growing user base.	Improvement	They acknowledge the feedback, tackle the problem areas, and alerts the users with each update.

Example 2: Product Interface

	Positive Feedback Loop		Negative Feedback Loop
Action	An app with a simple, user-friendly design gets glowing reviews.	Problem	A new gadget has frequent technical issues that require users to constantly contact customer support. This causes a wave of product returns.
Appreciation	This inspires the product team to maintain the user experience.	Resolution	The company recalls the gadget, and surveys the user upon recall.
Recognition	This leads to more satisfied customers and word-of-mouth.	Improvement	Based on the feedback, they make changes and send the product to a few users for testing. Then, they relaunch.

Tips to boost their impact

• Based on user feedback, conduct A/B testing to compare different versions of a product.
• Follow up with the right survey questions to understand the “why” behind unhappy reviews.
• Use these insights to inform product development decisions.

Feedback Looping in Action: 5 Real-World Examples

1. Retail: Target’s Shopper Feedback Loop

Target, despite supply chain issues and rising fuel costs, is still the 7th largest retailer in the world. It does this through a blend of strategies that include beacon technology, customer behavior tracking, and better digital experiences. Recently, it also reintroduced its loyalty program Target Circle with membership tiers for different shopper types.

2. Hospitality: Airbnb’s Guest Feedback Loop

From losing 80% of its revenues to earning a profit of $1.9 billion, Airbnb has made quite a comeback. One of the reasons for this has been Airbnb’s strong focus on feedback. By creating a two-way feedback loop between guests and Hosts, the platform maintains transparency and honesty, while also helping great Hosts do well financially.

3. Software Development: GitHub’s Open-Source Feedback Loop

GitHub collects feedback through various channels, including user surveys, online reviews, and bug reports. This feedback is analyzed to identify problems and make changes. For instance, GitHub implemented a new issue tracking system based on user feedback. They also introduced a feedback mechanism in GitHub Issues to help users report issues and suggest solutions.

4. Technology: Slack’s User Feedback Loop

From design firms to delivery companies, Slack has a diverse crowd. To set up feedback loops for all of these customer types would have been impossible. So Slack found its own solution. By creating a shared channel that included 100+ champion users, they collected raw user feedback and used that to refine their product.

5. Healthcare: Wearable Patient Feedback Loops

If your first thought was ‘fitness trackers’, they are only part of an ever-growing world of wearable tech. From glucose monitors, to artificial kidneys, wearable tech can create feedback loops by capturing health data and allowing patients to track their progress. This empowers patients to manage their own health, and also helps create personalized care plans.

How to Create an Airtight Feedback Loop

1. Gather feedback everywhere: Make it easy for customers to share their thoughts. Use surveys, in-app prompts, post-purchase emails, social media, WhatsApp chatbots, etc.
2. Listen deeply: With so many ways to collect feedback, it’s easy to get lost in the noise. Don’t just react to individual feedback. Use analytics tools to find recurring themes and talking points.
3. Prioritize and act: Focus on issues that have the most impact, and address them with clear solutions. The key is ensuring that the feedback you choose aligns with your brand’s larger goals.
4. Communicate the change: Explain the changes you’re making to the customers, and why you’re making them. This not only involves them in the process, but they also know what to expect the next time they check in.
5. Make this a habit: Get the next rounds of feedback. Repeat the cycle. For example: After switching to a new booking system, a hotel chain constantly refines that system based on user feedback.
6. Take a step back: Use analytics tools like SurveySparrow to measure your overall progress in key metrics over time. Then optimize your loop accordingly. Here are tips to make it easier.

Tips to Optimize Your Feedback Looping

1. Fill in the gaps: Are your surveys mobile-friendly? Do you offer options in multiple languages? Check areas where feedback collection is missing or needs to be amped up. This will improve the quality of your data.

2. Embrace automation: Embed widgets into your site or app to collect feedback in real-time. Use conversation analysis tools to gauge the overall tone of the feedback. Automate employee evaluations with software like ThriveSparrow or Lattice.

3. Pick your feedback: All feedback is relevant. But not all feedback is relevant all the time. Understand which types of feedback to collect at different points in the lifecycle – customer, employee, and product.

For instance, an employee who’s just been hired can benefit from first-week check-ins to understand any challenges they are facing. Similarly, you can send an NPS® survey to a customer immediately after they completed a milestone – like completing their first project or reaching a specified number of views.

4. Get your team’s buy-in: Gone are the days when data used to belong to the analysts. Now data access is democratic; companies in an advanced stage of growth give team members access to the data that’s relevant for their job.

Suppose you own a brand with multiple locations. If you manage your data using SurveySparrow, you can determine data access based on role and location. For instance, the manager of Store A in Washington only needs feedback about Store A, whereas his reporting manager gets data about all the stores in the state.

5. Connect your loops: Unify feedback loops across different areas (CX, EX, PX) to see the big picture and opportunities for improvement. Platforms like SurveySparrow can help you with that.

Wrapping Up

Feedback loops are all around us, from cooking to our own learning! By understanding the different types of feedback loops in our business and constantly optimizing them, we can harness the power of customer and employee voices to continuously improve our products, services, and overall customer experience.

They can be good or bad, but they’re definitely a powerful way for things to change and react to each other.