Customer feedback is better than gold — here’s how to analyze it

Your business receives feedback in all sorts of ways every single day. You go out of your way to collect some of it, while with other forms (such as customer support phone calls), the customer feedback comes to you on its own terms.

Any business that wants to improve their product or service would be wise to investigate what their customers actually want them to improve. If something major is broken or missing, then the need is obvious. But most of the time, it’s less clear — there are numerous lower-profile elements to choose from.

If your business is in that last category, how do you decide which of those elements to prioritize?

Stepping back even further, how do businesses discover those elements in the first place?

Through customer feedback.

Below we’ll walk through how to collect this feedback, why doing so matters, and — more importantly — how to analyze that feedback to form actionable insights.

How is customer feedback collected?

Businesses can collect varying types of customer feedback across numerous channels. Consider these channels as you evaluate your customer feedback efforts and any that are niche or specific to your field or industry.

Social media and online reviews

Social media tends to provide feedback on the extremes. Your biggest fans may call you out (in a good way), and frustrated customers may do the opposite. It’s important to engage with both audiences and solve the latter's problems, but don’t overlook social media as an opportunity to collect and log feedback, too.

Online reviews often contain valuable insights as well, including the oh-so-rare positive feedback. In many cases, they’re also deeply important as a selling tool, with 77% of consumers consulting them before purchase. (When was the last time you bought something on Amazon that had only 1.5 stars?)

Online reviews typically capture just the beginning of the customer journey and user experience, which is valuable in evaluating your onboarding efforts.

Customer feedback surveys

Customer feedback surveys can be a valuable source of feedback. Here, your business sends out a short survey and invites responses, often with a reward (or chance at a reward) for respondents as an incentive for participating.

You’ve probably seen these in the wild; at the bottom of most fast food and retail receipts, there’s a chance to win a gift card or free food in exchange for your opinions.

You’re probably not printing out paper receipts, but the concept adapts well to other contact methods like email.

Email and customer contact forms

Most businesses give customers a way to contact them via a web form (or even just an email address). With careful use of categorization or segmentation (e.g., which functionality or category of service are you contacting us about?), businesses can use this input as a way to gather customer feedback.

Usability tests

Taking your product or service to real customers and seeing how they interact with it is an invaluable source of customer (or pre-customer) feedback. Setting up effective usability tests and gathering usable data from them takes some setup and forethought (here’s a reliable guide), but it’s worth the effort if you can discover “real-world” flaws before your product actually hits the real world.

Customer interviews

Customer interviews are a structured way to get customer feedback. They can be a smart way to gain more quantitative feedback like Net Promoter Scores (NPS) as well because you have the opportunity to tailor the interview questions.

If you’re doing this at scale, keep your phone agents on task and on track by using a high-quality customer feedback template.

Instant feedback from customer service and website support

Most customers reaching out to customer service or customer support do so because they’ve encountered a problem. Every single one of those calls, chats, or touchpoints is customer feedback, and it’s a very valuable source. Your customers came straight to you and weren’t shy about sharing their opinions.

The only downside is that this customer feedback channel tends to slant toward the negative: People rarely call just to tell you how great a job you’re doing, unfortunately.

Why is analyzing customer feedback important?

Collecting customer feedback happens in numerous ways across all sorts of channels, but what do you do with that feedback once you collect it?

You'll need to analyze the feedback to turn raw customer data into actionable insights that drive your business forward.

Why is that important? We’re glad you asked!

Gain direct insights into pain points, bugs, and problems

Your customers are a precious source of information about what isn’t going well in your customer-facing operations. We know that no one likes a Negative Nancy, but the fact is, if enough of them are saying the same thing, then the problem is with you — not the customer.

Your customer feedback data holds direct insights into people's pain points or problems, but unlocking those insights requires organizing and analyzing the data.

Improve customer success and satisfaction

Analyzing customer feedback is also key to improving customer success and satisfaction. This goes hand in hand with figuring out what the problems are, because when you identify and solve customers’ problems, you improve their satisfaction and their success in using your product or service.

Understand customer needs

A good product solves pain points and resolves bugs, but really this is only the bare minimum required for limited success. Truly great companies (and their products and services) understand unmet needs, then fulfill those needs.

Your product or service may function well, but there are always more ways to meet customer needs. Improving your current offering could pull in more customers, helping you scale. Offering another or a complementary product to meet additional needs can create upsell and cross-sell revenue opportunities as well.

At the core of all this is understanding what your customer needs — and analyzing what your customers are already telling you is a key piece to that puzzle.

Target your continuous improvement efforts

Whatever your business does, you want to keep getting better at doing it — otherwise known as continuous improvement. But what does “better” mean? Higher revenue is certainly “better,” but it’s an outcome, not an effort.

Continuous improvement is really about figuring out what efforts will lead to higher sales (or whatever other outcomes you’re seeking). Here again, the answers are in the data.

5 step process for analyzing customer feedback

Collecting customer feedback is a crucial step, but it’s only half the job. To turn that feedback into something actionable, you must analyze it.

Easier said than done, right?

Analyzing customer feedback and then turning that analysis into something actionable can be a challenge, and it certainly takes effort and focus. Follow these five steps to bring some structure and cohesion to your customer feedback analysis efforts.

1. Collect customer feedback and choose your method

The first step is collection, which we discussed above. But beyond gathering data, you also need to decide how you’ll analyze that data.

Customer feedback data tends to arrive in wildly differing forms, which makes analysis a challenge. Your CRM outputs user feedback one way, while the qualitative data coming in from your website contact form has little structure at all.

Knowing from the start what methods you’re going to use will help guide your collection process.

Most small businesses analyze customer feedback manually, but there are scripts and software solutions that can make the process easier (if you can get your data clean enough).

AI-powered automation tools are also on the rise. In general, the more you can automate, the better.

2. Consolidate your customer feedback into one central tool

Once you’ve chosen a customer feedback analysis strategy, your next step is getting all the relevant data in one place.

Smaller operations might use an Excel spreadsheet or simple database to house this data, but the larger your data set, the more complicated this process gets and the more you might benefit from purpose-built or custom tools.

3. Group your customer feedback into buckets

It’s quite difficult to draw a meaningful conclusion from your entire customer feedback data set, so group that feedback into logical buckets. These could be by product, sentiment, or user complaint — it all depends on what you want to do with the data.

Categorizing customer feedback and grouping it into buckets gives you a clearer sense of what’s happening on any given issue or with any given product.

4. Perform a root cause analysis of your feedback

In its raw form, negative qualitative feedback will point to problems. But it doesn’t consistently point to the root causes behind those problems.

Focusing on the problems themselves leads to a never-ending game of whack-a-mole: New problems just keep popping up because you never addressed the root cause.

A root cause analysis should take the problem and look for an underlying reason the problem occurred. Then you look for an underlying reason for that reason until you get to a fundamental (root) reason.

Tagging and organizing these causes/reasons into a hierarchy can be helpful, too: Realizing that five of your most common complaints stem from the same root cause gives you powerful insight into what to address first.

5. Present and create reports for your customer feedback

Customer feedback (and its analysis) are only valuable when they drive change, and driving change requires clear communication. Once you’ve identified root causes and targeted specific areas for improvement, share your findings with stakeholders and decision-makers so you can start creating change as soon as possible.

Challenges of analyzing customer feedback (+ solutions)

We’ve given you a step-by-step guide for analyzing and using customer feedback, but we’ll be honest: it isn’t always easy to do. These are some of the challenges you’re likely to encounter — plus a solution for each.

It takes time to collect feedback

For starters, collecting meaningful feedback isn’t automatic. It takes time, effort, energy, and money. It takes personnel that could be doing other things.

It also simply takes time. If you release a new product today, it’d be great to get meaningful data that you can analyze right away. But that isn’t usually the case (barring some kind of catastrophic failure — and we certainly hope you never collect that kind of instant feedback!).

Solution: Be patient and start collecting data right away

Know from the start that collecting feedback is going to take time. You may have a history to pull from that can inform how long it’s likely to take; that’s a good way to level set with your team.

Also, make sure you don’t delay and that you have a customer feedback collection process in place from day one. If your team is laser-focused on releasing the product, it’s possible that other systems (like a collection and analysis mechanism for customer experience or customer satisfaction data) aren’t quite ready to go. Take the time to get these systems in place so that you’re collecting feedback and properly processing the data from day one.

Customer feedback is hard to understand

Some customer feedback is fairly direct, but much of it isn’t. And even direct complaints can be hard to understand from a root cause perspective.

For example: “I hate this product, it didn’t work at all!” is certainly customer feedback, but unless you go deeper, you’ll have a hard time reaching any actionable insights from it.

Sometimes you might not have the right analysis tools to parse customer insights well enough that you can take action. For example, complex data analysis from data-driven analytics tools may be out of reach for smaller firms.

Similarly, tools exist that use machine learning and natural language processing (NLP) to perform text analysis on verbatim responses. Still, you’ll need resources and skills you might not have to benefit from systems like those.

Solution: Save this data for later and spend more time analyzing it to get a better understanding

When you encounter data that you can’t understand (or don’t have the tools to process properly), don’t sweat it. There’s always more data and metrics than you’ll be able to use.

Instead, set aside the troublesome data and focus on the data you can process. Later, you can devote more time (or invest in better tools) to better understand the data you set aside.

The quality of feedback varies

It’s beyond question that customer feedback can lead to valuable insights, but let’s be honest: Not all customer feedback is useful.

Some of it is so vague that it isn’t actionable. Some feedback is from obvious detractors who offer nothing tangible you can fix. Some feature requests are sensible and helpful. Others are fantastical and not grounded anywhere near reality.

It’s crucial to separate or collate your user feedback into what’s actionable, useful, or helpful — and what’s not.

Solution: Use the proper tools to collect feedback

One reason that businesses become overwhelmed with categorizing feedback and eliminating the unhelpful stuff is that the process can be extremely manual, making it difficult to do at scale.

The truth is that if you’re using manual collection and sorting, filtering for quality feedback becomes increasingly difficult as you scale up your efforts. You simply don’t have the time or the staffing power to make individual judgment calls on whether a piece of customer feedback is useful.

So the answer here is to use the proper tools for collecting feedback. For hands-off feedback collection, well-designed web forms can do the first level by forcing users to self-select a category “bucket.”

For more wide-ranging or heavily integrated 360-degree online customer feedback tools, dozens of solutions are available, each with its own suite of capabilities.

Hands-on efforts (like focus groups, usability tests, and customer interviews) benefit greatly from a purpose-built guide or note-taking tool that allows your team members to further categorize feedback as it is collected.

Use this template for customer feedback meetings by Range

Any of the customer feedback collection efforts that involve meetings or active participation from a member of your team give you an opportunity. When you control the conversation and the format, you can direct your feedback collection efforts — and keep them consistent across your organization.

Range is the perfect meeting tool for categorizing and taking in customer feedback in a meeting setting.

Take our powerful customer feedback meeting template: It keeps your team members on track, ensures they cover everything they need to, and gives them a place to take down that valuable customer information.