2012-11-26-Bain-Closing_the_loop_8页_2mb

Loyalty Insights: Closing the Loop
By Rob Markey & Fred Reichheld

Introduction
This report emphasizes the critical importance of "closing the loop" in customer feedback. It argues that merely collecting feedback through traditional surveys is often ineffective because customers receive no acknowledgment or action commitment, deterring them from providing input. Instead, "closing the loop" – communicating back to customers that their feedback is heard and acted upon – significantly boosts satisfaction and loyalty while providing actionable insights to organizations.

Key Findings & Importance of Closing the Loop

1. Purpose: To inform customers that feedback is received, understand their issues better (through follow-up), and assure them that action is being taken (and has occurred), thereby delivering value (resolution) sought by the customer.
2. Positive Effects: Reinforces trust, builds loyalty, encourages future feedback, provides immediate motivation for employees to improve, enables course correction for negative feedback.
3. Central Role in NPS: Closing the loop is a core component of the Net Promoter® System, directly connecting customer voice to internal action.

How to Close the Loop (Practical Steps)
The process involves three key levels:

1. Front Line to Midlevel Management:

   • Short, targeted feedback calls/emails (e.g., follow-up calls post-survey/poll).
   • Listen to understand, probe for specific concerns.
   • Fix immediate issues promptly.
   • Enable frontline staff to identify system flaws needing group-level fixes.
   • Share detailed original feedback (scores, verbatim comments) with relevant staff.

2. Front Line and Midlevel Management:

   • Actively seek feedback internally (calls, emails, short surveys).
   • Ensure feedback reaches the appropriate departments/individuals frequently.
   • Analyze feedback patterns, escalate themes, and inform strategic priorities.

3. Midlevel to Senior Management:

   • Translate customer concerns into actionable improvements in processes, products, policies.
   • Address loyalty-threatening issues promptly (e.g., Logitech addressed design flaws from customer feedback; Allianz re-engineered claims handling based on customer feedback).
   • Focus top-level priorities on resolving key customer concerns.
   • Regularly present aggregated feedback (NPS scores, critical themes, verbatims) to leadership to inform strategic decisions.

4. Senior Management:

   • "Close the loop" directly with customers via feedback calls where appropriate.
   • Embed customer feedback routines into leadership structures (e.g., Cancer Treatment Centers of America; Rackspace CEO connects with feedback callers).

Challenges and Pushback

• Traditional surveys are often cumbersome and unactionable, reducing customer willingness to engage.
• Some organizations resist direct feedback due to resource constraints, preferences for aggregated data, or diverting attention from departmental goals.
• Lack of proper information about feedback resolution is common.

Call to Action
The report concludes that inefficient feedback collection is a missed opportunity. Gathering feedback promptly and effectively (close the loop) is crucial for understanding customer needs and driving loyalty. It calls for a shift towards robust, direct customer feedback mechanisms ("feedback systems") linked to both IT and management processes.

Bain & Company Context
Details the consulting firm's background, expertise, and alignment with clients on achieving results through the Net Promoter® System.

Key Message
Closing the customer feedback loop is essential for transforming raw feedback into tangible improvements and loyalty.