Automate Customer Feedback Management: Business Case and ROI for SMBs

The previous blog discussed the steps to implement an effective customer feedback loop. Here, let’s look at the business case and return on investment (ROI) for small and medium businesses (SMBs) in automating the customer feedback loop/management process and how they can do it with the RateUp Customer Feedback Management Platform.

3 out of 10 customers churn due to a negative experience

The State of Customer Experience from Genesys shows that 33% of customers switch brands after a negative experience. To put into perspective, say you’re an SMB with a total of 500 customers for a certain period with $2,400 ($200 per month) annual average revenue per customer (ARPC). Then, considering the churn data, the yearly churn loss due to bad experiences will be $396,000 (33% of 500 customers x $2,400 ARPC).

Of course, the amount varies depending on the customer experience you provide, ARPC, and more. However, even a 10% churn due to a lousy customer experience still costs $120,000 (10% of 500 customers x $2,400 ARPC) annually. Also, churn negatively impacts revenue from referrals and upsells, apart from degrading customer acquisition cost and lifetime value (CAC & CLV).

An excellent way to prevent such loss and reduce the churn rate is to streamline and automate the customer feedback management process. It ensures that businesses get continuous, real-time feedback they can act upon, which decreases the likelihood of customers having a bad experience.

Automating customer feedback management

Customer feedback automation involves automating customer feedback loops. The customer feedback loop is all about listening, analyzing, and acting. In practice, it becomes gathering customer feedback, analyzing it, and acting based on the input.

Customer feedback collection

Configure your feedback collection method to run automatically after a fixed time a customer conducts business. This could be after a few hours, days, or months, depending on how long it takes customers to get value from your business.

The RateUp platform integrates with your existing CRM/billing software. Using the platform, you can schedule and automatically send brand-themed web surveys or WhatsApp flows to customers.

Analyzing customer feedback

Without a customer feedback management platform, businesses spend hours sifting through the enormous feedback data to glean actionable insights. The more time it takes to identify and fix issues, the more customers you’ll lose to competitors.

The RateUp platform shows survey analytics (NPS, CSAT, survey responses) on the dashboard, which helps you prioritize action items. You can also tag the respective departments/teams and create tickets to resolve the issues.

Acting on the feedback

The step is not easy to automate. Depending on the feedback, you might need to take different actions. For example, you might train employees on soft skills, enhance product quality by collaborating with the product teams, revisit pricing, etc. It’s critical to inform customers about what happened with their feedback/ticket to close the feedback loop.

With the RateUp platform, you can automate sending messages to customers once they complete the feedback form. You can also send messages from the dashboard's inbox to give customers the ticket details or share a coupon code as a token of appreciation after the action is taken.

~12x ROI of customer feedback management automation

Let’s do the math again. We’ve seen above that the average annual revenue lost due to customer churn from a negative experience is $396,000. Not every customer who had an unpleasant experience shares feedback. And not all feedback that you get will be actionable.

So, to be realistic, let’s say 3% of the churned customers shared actionable feedback, and you could mitigate the issue. That means a potential saving of ~$12,000 (3% of 165 churned customers x $2,400 ARPC). If an automated feedback management platform costs $1,000 annually, the ROI becomes ~12x.

Note:

• The calculation assumes that every actionable feedback prevents churn. The actual impact could vary.
• The calculation doesn’t account for feedback implementation cost. However, you'd still break even if you spend $11,000 ($12,000 saved - $1000 cost of implementing the automated feedback management platform). Any amount spent below this amount will result in a positive ROI.
• Even a portion of potential customer churn prevented would have a positive ROI.
• The current estimation is for an SMB with a small customer base. It’s highly likely to have an even more positive impact on SMBs with many customers.
• Some feedback implementation may result in a higher retention rate and vice versa.
• Successful feedback implementation will have additional benefits, such as enhanced customer satisfaction, improved referrals, upsells, and product/service quality.

Customers hold the key to business growth — listen to them

Even a single customer feedback acted upon can have a significant overall positive impact on your business growth. The more you listen to customers and act based on their input, the more you’ll retain and attract new ones. And if you can automate the process using the RateUp Customer Feedback Management Platform, you get more feedback and save on the operational expenses of implementing a customer feedback loop.