Customer feedback: The secret to the growth of your business

26 February 2020 / Posted By Demi Edmunds

3 Min Read / Retail - customer feedback

KPMG recently reported that customer retention is the most significant revenue driver for retailers, learn how your business can optimise their retention strategy today.

While the majority of businesses would consider customer feedback to be significantly valuable to the success of their business, the reality is, it often gets overlooked and pushed down the priority list. Brian Halligan CEO of HubSpot, was recently quoted as saying – “feedback is the breakfast of champions” – if we don’t know what we are doing well as a business, we can’t do more of it and if we don’t know where we’re doing wrong, we can’t correct it. 

Furthermore, concentrating on existing customers makes financial sense:

Acquisition

It costs a brand five times more to attract a new customer, than it does to simply retain an existing one. 

Retention

Even a small increase in retention can have a very large impact on growth. According to a study by Harvard business school, just 5% increase in retention can lead to an increase in profit of between 25% – 95%

This figure is actually exacerbated for e-retailers in the fashion market, with repeat customers spending over double in months 24-30 of their relationship with a brand, compared to the first 6 months.

Revenue

According to the book Marketing Metrics, a business’s chances of selling to an existing customer over a new consumer are 50-65% more successful. 

Additionally despite KPMG reporting that customer retention is actually the most significant revenue driver for retailers, currently only 18% of companies place their greatest focus here. 

Most significant retail revenue drivers

Bar chart showing most significiant retail revenue driver as customer

So customer feedback really could be your brand’s chance to discover potential ideas to unlock the growth of your business and get ahead of the competition. 

The good news is that collecting feedback is easier than you might think. According to research conducted by g2, 68% of consumers are ready and are happy to give their feedback. Furthermore 95.3% of consumers said they would respond to an SMS survey. So what should you be asking your customers? Well, the possibilities are only really limited by your creativity, but try to think about the core three:

  1. Market research
  2. Customer satisfaction
  3. Customer experience

1. Market research

As stated earlier, you are much more likely to sell to an existing customer than a new one, so it makes perfect sense to perform market research on your existing customer base. Ask customers which products and services they’d like to see developed. It could just be that they identify your next cash cow

2. Customer satisfaction

Many companies shy away from customer satisfaction, however, this really is one area where brands need to engage with their customer base. As Bill Gates said – “your unhappy customers are your greatest source of learning”, so don’t be disheartened if the feedback you receive isn’t always positive. A business can always improve, so just be sure that when you have collated this feedback it’s put to good use and actually actioned. 

For example, some of our clients use our SMS survey product, to ask customers to rate their delivery. Now this may seem like a simple tick box exercise, but the interesting part is that this data is then used to impact things like bonuses. By building this information into everyday business processes, you can ensure that everyone is motivated to ensure customers receive the best possible experience.

3. Customer experience

It’s no secret that today’s consumers demand much more from their shopping experience. This simple fact has led to multiple high-street giants installing nail bars, coffee stalls and even hiring in-house stylists. Understandably, these additions come with a cost. So, before you start investing in store restructures, ask your customers about their experience and how it could be improved. Their answers may surprise you. 

To conclude, customer feedback could hold the power to unlocking secret growth within your business. To find out how TextAnywhere can help, get in touch with one of our friendly advisers at welcome@textanywhere.com

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