As BrandTrack consultants at The Marketing Interchange, we’re often asked to help clients better understand the many terms and concepts used in customer research, user research (UX), voice-of-the customer (VOC), and competitive intelligence. This gave us the opportunity to write a whitepaper on analyzing customer feedback as a helpful starting point for customer-centric organizations to access hidden insights in feedback data.
In this whitepaper, you’ll read about the benefits of analyzing customer feedback, the different sources of customer feedback and methods to analyze it, and practical suggestions on how you might incorporate it into your workflow.
What is customer feedback analysis?
Customer feedback analysis is the process of systematically collecting, evaluating, and interpreting customer feedback to gain insights and actionable information about customer experiences, preferences, satisfaction levels, as well as, their perceptions about the brand (i.e. brand equity). It involves analyzing various forms of customer feedback, such as surveys, reviews, social media comments, and customer support interactions, to understand customer sentiment, identify trends, and extract meaningful insights.
Why analyze customer feedback?
Customer feedback analysis is important for several reasons:
1. Customer Insight: Analyzing customer feedback provides valuable insights into customer perceptions, preferences, and expectations. It helps organizations understand what customers value, what they dislike, and how to improve their products, services, and overall customer experience.
2. Quality Improvement: Customer feedback analysis enables organizations to identify areas for improvement and take proactive measures to enhance product quality, service delivery, and customer support. By addressing customer concerns and suggestions, organizations can continually refine their offerings and align them with customer expectations.
3. Decision-Making: Customer feedback analysis provides data-driven insights that inform decision-making processes. It helps organizations make informed strategic decisions regarding product development, marketing strategies, customer service enhancements, and resource allocation.
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4. Competitive Advantage: Understanding customer feedback can give organizations a competitive advantage. By actively listening to customer feedback and responding effectively, organizations can differentiate themselves from competitors and build strong customer relationships based on trust and satisfaction.
5. Customer Retention and Loyalty: Analyzing customer feedback helps organizations identify potential issues that may lead to customer churn. Proactively addressing customer concerns and suggestions is an important part of customer relationship management. Organizations can enhance customer retention rates, increase customer loyalty, and foster long-term relationships.
6. Brand Reputation Management: Customer feedback analysis allows organizations to monitor and manage their brand reputation. By actively listening to customer feedback, organizations can address negative sentiment, respond to customer complaints in real time, and take appropriate actions to protect and enhance their brand image.
7. Innovation and Product Development: Customer feedback analysis provides valuable input for innovation and product development processes. By understanding customer needs, pain points, and suggestions, organizations can develop new products and features that align with customer expectations and enhance their competitive offerings.
8. Continuous Improvement: Analyzing customer feedback is an ongoing process that supports continuous improvement efforts. It helps organizations track performance over time, monitor the impact of implemented changes, and drive a culture of continuous learning and adaptation.
Where to find customer feedback?
Across both external and internal channels, there are numerous sources of customer feedback, which contain quantitative data and/or qualitative data:
1. Surveys: Companies often create and distribute surveys to gather feedback from customers. These surveys can be conducted through various channels, including email, online forms, or embedded within products or services.
2. Online Reviews: Customers frequently share their experiences and opinions on online platforms such as review websites, e-commerce sites, social media, and online forums. These reviews provide valuable insights into customer satisfaction and sentiment.
3. Social Media: Customers express their feedback and opinions about brands, products, or services on social media platforms like Facebook, Twitter, Instagram, LinkedIn, and others. Monitoring social media channels helps companies capture customer feedback in real-time.
4. Customer Service Interactions: Direct interactions with customer service representatives, whether through phone calls, emails, live chat, or support tickets, can generate valuable feedback. These interactions often provide insights into specific issues, concerns, or suggestions from customers.
5. In-app Feedback: For digital products or services, companies can integrate feedback mechanisms within their applications. This allows customers to provide feedback or report issues while using the product directly, providing real-time insights.
6. Focus Groups: Companies may organize focus groups, where a small group of customers is brought together to provide feedback and opinions on specific products, services, or concepts. These sessions encourage open discussion and qualitative feedback.
7. Customer Interviews: Conducting one-on-one interviews with selected customers provides in-depth insights and allows for a more personalized understanding of their experiences, needs, and preferences.
8. User Testing: User testing involves observing customers as they interact with a product or service, recording their experiences, and collecting their feedback. This approach helps uncover usability issues, pain points, and areas for improvement.
9. Customer Feedback Forms: Companies may provide dedicated feedback forms on their websites, apps, or physical locations. These forms capture structured feedback on specific aspects of the customer experience, product features, or service quality.
10. Customer Complaints: Tracking and analyzing customer complaints and escalations can reveal underlying issues or areas that require attention. Complaints can come through various channels such as email, phone calls, or dedicated complaint management systems.
11. Sales and Purchase Data: Analyzing sales data, order history, and purchase patterns can offer insights into customer preferences, buying behavior, and potential areas for improvement.
12. Online Communities and Forums: Niche-specific online communities, forums, or discussion boards related to certain industries or interests often provide a platform for customers to share feedback, seek advice, and engage in discussions about products or services.
It’s important for organizations to actively collect and analyze customer feedback from multiple sources to gain a comprehensive understanding of customer sentiment, preferences, and areas of improvement. Tools in review analytics and reputation management can be used to unify all customer feedback sources onto a single platform for analysis.
How to analyze customer feedback?
Customer feedback analysis is a form of market research, which involves a systematic approach to extract valuable insights, identify patterns and trends, and make data-driven decisions based on the feedback. This consists of 11 steps:
1. Gather and Organize Reviews: Collect customer reviews from various sources, including e-commerce websites, social media platforms, review aggregation websites, and company-specific channels. Ensure that the reviews are properly organized and categorized for analysis.
2. Define Objectives and Key Metrics: Determine the objectives of the analysis and the key metrics you want to evaluate. This could include customer satisfaction, product quality, customer service, or specific aspects of the customer experience. Clearly define the criteria that will guide your analysis.
3. Read and Familiarize: Read through the reviews to gain a comprehensive understanding of customer sentiments, experiences, and feedback. Familiarize yourself with the specific issues, praises, suggestions, and concerns raised by customers.
4. Categorize and Tag: Categorize the reviews based on common themes, topics, or attributes. Create tags or labels to group reviews with similar content or sentiment. This step helps in organizing the data and identifying patterns more effectively. A customer journey map listing all major touch points or interactions will provide helpful list of categories.
5. Perform Sentiment Analysis: Analyze the sentiment expressed in each review to understand the overall tone. Determine whether the sentiment is positive, negative, or neutral. Use sentiment analysis tools or manual assessment to categorize the sentiment of each review.
6. Quantitative Analysis: If reviews include ratings or numerical scores, conduct quantitative analysis. Calculate average ratings, identify trends, and compare ratings across different products, services, or time periods. Look for correlations between specific aspects of the customer experience and ratings. This may also include competitive analysis, where you are comparing your service performance against industry benchmarks or close competitors.
7. Identify Common Issues and Trends: Look for recurring themes or issues mentioned by customers in their reviews. Identify common pain points, areas for improvement, or positive aspects that stand out. This analysis helps prioritize actions and focus on the most significant areas of improvement.
8. Pay Attention to Specific Keywords and Phrases: Identify keywords and phrases used by customers that are particularly relevant to your objectives or key metrics. Pay attention to descriptive language, product features, customer service interactions, or specific experiences that customers highlight.
9. Track Changes Over Time: If you have a continuous flow of reviews, track changes in customer sentiment, issues, or trends over time. Monitor any improvements or declines in customer feedback to assess the impact of changes implemented based on previous analysis.
10. Summarize Findings and Take Action: Summarize the key findings and insights from the analysis. Identify actionable steps and recommendations based on the feedback. Prioritize areas for improvement, address customer concerns, and leverage positive feedback to enhance the customer experience.
11. Continuously Monitor and Iterate: Customer review analysis should be an ongoing process. Continuously monitor and analyze new reviews to stay updated on evolving customer sentiments and feedback. Use the insights gained to drive continuous improvement and optimize the customer experience.
How to summarize and report customer feedback?
Customer feedback consists of quantitative and qualitative data (i.e. numbers and words); both of which are equally important, but for different reasons. Quantitative data helps us understand the ‘What’: a summary and description of the situation, while allowing us to gauge the volume or severity of issues, problems, or gaps in performance. Qualitative data helps us understand the ‘Why’: a context and meaning to these numbers, while giving us insight into the underlying reason or drivers for those issues, problems, or gaps in performance.
Depending on the data source, customer feedback might already be structured as quantitative data, in the form of survey questions, numerical ratings or calculated metrics, including:
1. Stars or ratings: The most familiar of these are the overall star ratings on online review platforms such as Google and Yelp. The distribution of one-star through to five-star ratings received can be reported and tracked over time.
2. Net Promoter Score (NPS): NPS measures customer loyalty and the likelihood of customers recommending a brand to others. It asks customers to rate their likelihood of recommending the product or service on a scale of 0 to 10. NPS is calculated by subtracting the percentage of detractors (0-6 ratings) from the percentage of promoters (9-10 ratings).
3. Customer Satisfaction Score (CSAT): CSAT measures customer satisfaction with a specific interaction, product, or service. It typically asks customers to rate their satisfaction on a scale, often ranging from 1 to 5 or 1 to 10. CSAT scores can be calculated by averaging the ratings or by considering the percentage of satisfied customers (e.g., those who rated 4 or 5).
4. Customer Effort Score (CES): CES measures the ease of customer experience when interacting with a company. It assesses how much effort customers perceive they need to put into resolving an issue, making a purchase, or using a product/service. Customers are usually asked to rate the effort on a scale, such as “very easy” to “very difficult.”
5. Customer Churn Rate: Churn rate calculates the percentage of customers who discontinue their relationship with a brand or stop using its products/services within a given timeframe. It helps identify dissatisfaction or issues leading to customer attrition.
6. Resolution Time: This metric focuses on the time taken to resolve customer issues or inquiries. It measures the speed and efficiency of customer service or support teams in addressing customer concerns.
The qualitative data in customer feedback are the comments as unstructured data; however, text analysis methods, which are increasingly powered by Artificial Intelligence (AI), can translate words and phrases into structured and trackable Key Performance Indicators (KPI), including:
1. Key themes and topics: Text mining or topic modeling techniques, such as Latent Dirichlet Allocation (LDA), can extract key themes or topics that represent common issues, features, or concerns discussed by customers.
2. Feedback Frequency: The frequency in which each theme or topic is mentioned in feedback provides an understanding of the areas that are more prevalent or have a significant impact on customers.
3. Sentiment: Natural language processing (NLP) or machine learning algorithms are used to determine the sentiment expressed in each customer feedback entry. Sentiments expressed can either be positive, negative, or neutral; therefore, a useful measure is the distribution of positive sentiments in all customer feedback entries, or even for each specific key theme or topic.
4. Benchmarking: Since customer feedback of your competitors are available on online review platforms, tools in feedback analytics or review analytics can be used to conduct the same text analysis to provide valuable competitive intelligence for benchmarking. Tracking your own customer feedback metrics against competitors’ performance provides a context for understanding performance and identifying areas that need improvement.
Once the metrics are well-understood and accepted, customer feedback data can be reported on dashboards, tracked over time, and updated in real-time for greater actionability and accountability.
How do I get started?
There are several solution providers in the area of reputation management, review analytics, social media listening, and feedback analysis. Check our ‘About BrandTrack’ page to understand how we translate customer feedback into actionable insights for a better customer experience. Better yet, check out our sample BrandTrack dashboard here to see it in action.