The importance of customer feedback for your business

You started your company because you saw a gap in the market where your product or service could satisfy a certain need. Based on that philosophy, your customers are the driving force of your business, they are the reason why you started it all. If we follow that logic, do you think it makes sense to forget about them once you launch your product or service? No it doesn’t.

One of the biggest mistakes companies make is to believe they are the experts and that their product is a once in a lifetime opportunity for their audience. That’s very far from the truth. Your product is not a magical object that saves people’s lives, it is meant to make people’s life easier. So, are you getting the point? Your customers are the ones who should be telling you how to improve.

Stop seeing your customers as moneybags, they offer more than their money, they offer their trust, and the best way to show them you care is by collecting feedback. They need to be your strategic allies when it comes to improving your business, since they are the ones that actually use your products or services.

Now let’s go back to the genesis of it all, you saw a gap and wanted to fill it out with your product, but you need to keep innovating if you want to stay competitive. That’s where customer feedback comes in. You ask your customers what they feel is missing and what new features they think would work best.

Collect those insights and make those improvements, it is a goldmine since they are the ones explicitly telling you their needs. If your business is stuck in a feedback loop that doesn’t go anywhere, then this article is meant for you. Let’s share the benefits of customer feedback, how to collect it, and how to improve based on it.

What is customer feedback

Customer feedback is information being shared by customers in the form of opinions, perceptions, or complaints, where they express their experience with a company. That experience can relate to a company’s products, services, customer support, social media, or marketing efforts. The goal of sharing their feedback is to improve a specific aspect from a company. 

In essence, feedback is the customer’s voice where they can let a company know if their expectations are met. The information they share must be analyzed to form insights that tell a story, which helps companies understand their customers better. Feedback can be collected through different channels like surveys, social media comments, 1:1 interviews, or online reviews.

However you collect customer feedback, you need to make sure you evaluate the entire picture. You must read and analyze everything to connect dots, find patterns, determine common pain points, and areas of improvement. This transforms your customers into strategic allies that help you optimize your business.

For customer service, feedback means the insights a company collects from asking customers about their support experience. This will help your company identify the strengths and weaknesses of your agents, helping them maintain the positives and improve the negatives. This cycle of asking, collecting, evaluating, and improving enhances the overall experience and satisfaction.

The role of customer feedback in business success

Customer feedback has an active role on businesses, so much that taking action leads businesses to thrive in their market. How is this possible? Well, feedback connects companies with customers on a deeper level, so you stop guessing what they want and actually deliver what they need. 

This bridges the gap between company’s intent and customer’s reality by ensuring that any updates align to customers’ needs. But if you want to succeed you need to listen very carefully to what they say and show action fast. Delivering fast shouldn’t be confused with quality loss, you can take your time on doing improvements, but collecting feedback shouldn’t wait.

If it does, then you will be facing the other side of this beautiful landscape we are describing where your customers are satisfied with the overall experience. Ignoring customer feedback brings costly consequences, mainly making you lose your competitive edge, which in today’s fast world is due to missed opportunities. Missing out kills your business. 

Make sure you listen and act on feedback to build credibility, foster trust, and drive engagement. Acting on real-time feedback increases user engagement by 54%, while speeding up feature validation by 50%.

How feedback reflects customer experience

By collecting feedback from all touch points you will be able to understand the full perception of your customers. You may have some very positive reviews about your products, but maybe your customers are dealing with delays or awful customer service. How would you discover this if not by asking your customers about their entire experience?

Ultimately, understanding what is the importance of customer feedback means recognizing it as the foundation of every customer-centric strategy. Without it your business will feel like navigating deep waters without a captain, you would just be trying to survive instead of reaching for the land.

The benefits of customer feedback

The benefits of customer feedback reach far beyond simply collecting opinions. They are the backbone of continuous improvement, customer loyalty, and long-term business success. Customer feedback is important and helps companies turn data into action, ensuring every decision reflects what customers truly want and need.

When analyzed and acted upon, it becomes a strategic advantage that fuels innovation, retention, and revenue growth. Applied to customer service, feedback helps you improve your team’s performance, so let’s review the benefits of customer feedback for your business:

Feedback is the backbone of continuous improvement and that translates into customer loyalty, which at the same time goes on to becoming long-term success. The benefits go far beyond simply transforming data into actionable improvements. 

When collected and analyzed effectively, feedback then becomes the strategic advantage that fuels innovation. For customer service, collecting feedback comes with the following benefits that will boost your strategies:

importance of feedback from customers

Enhances customer loyalty 

One of the most powerful advantages of customer feedback is building loyalty, your customers will stay loyal if they feel their input is being correctly used by seeing improvements. This demonstrates your commitment to developing a strong relationship with your customers that goes beyond the sales cycle.

Integrating insights from feedback into daily operations enhances trust and satisfaction, both of which lay the foundation for customer retention. 

Customer service focus: When the improvements are applied to support, customers will notice it by having a superior experience. In a market where competitors can steal product features, offering great customer support makes the difference.

Measures customer satisfaction

Measuring customer satisfaction helps you identify whether or not your customers’ expectations are met. You need to measure satisfaction from different verticals, satisfaction with website experience, products’ ease of use, customer support, or service’s features to improve.  

Customer service focus: High customer service satisfaction levels will make your customers feel safe about reaching out to you. If they have a frustrating experience instead, they will just simply walk away, sometimes even without saying a word.

Improves your relationship with your customers

The importance of customer feedback in customer service is expressed through building long-lasting relationships. There is no better way to build it than showing your customers their input is valuable, because it sends a clear message: Your voice matters! It is through open communication that your customers will trust you so create a safe space for them to open up.

Customer service focus: When the customers feel an improvement, something as personalized service or available omnichannel strategies, it can make a huge difference when reaching out. This improves your possibilities to keep customers coming back.

Reduces customer churn

Customer feedback and retention are interlinked, and studies reveal that customers are willing to switch to a competitor after just one bad experience. Through customer data you can identify early signs of dissatisfaction, which allows you to proactively take ownership of the situation before it escalates and transforms into a lost customer.

Customer service focus: Great customer support is key for preventing churn. How is it possible? Because when done right, you can show your customers that you are empathetic and want to understand their issue to solve it and prevent them from experiencing future problems.

Customer acquisition strategy

Great experiences bring more customers, people enjoy telling their close ones about good things that happened. That same logic applies to great experiences with a company, they want their family and friends to try new things and when a product is great they recommend it. Social proof works great as a marketing tool, so take advantage of it. 

Customer service focus: Customer service interactions are a goldmine of insights, people reach out with issues and questions that should guide you into making their life easier. Analyze what they are facing and transform it into an opportunity to provide better experiences.

Improves your agents’ performance

Each customer has different needs, and maybe one of your agents is not able to satisfy them, but another agent does. Take your time to learn about your customers and their expectations, this way you can train your support team to tackle those needs.

Customer service focus: By studying your customers’ needs your agents will be able to offer great experiences, and their performance will improve. Improving their performance will also enhance your customers’ perception.

Challenges of collecting customer feedback

Collecting customer feedback comes with a set of challenges, but being able to identify is key to know how to react when you encounter them. Below are the main challenges businesses face, and why overcoming them is vital for collecting meaningful insights.

Ensuring ethical use of data and feedback

When dealing with customer feedback and data you need to ensure ethical ways of collecting it and correct use of data. Customers are aware about the company's ways of collecting and using data, so they expect transparency and clear communication. Companies that make ethics part of their feedback strategy, will be data protection certified and will strengthen customer relationships.

Filtering biased feedback

You must ensure the data you are collecting is viable by auditing your collection methods, where neutral language is key to avoid bias. If you don’t assess the quality of data you collect you will be collecting unreliable insights that will give you the wrong story. Your company needs to train its feedback specialists to ensure data quality.

Cultural differences when interpreting data

If your company has international customers or employees you need to take into account the cultural differences between the ones providing feedback and those who analyze it. This is why ensuring data quality is key, having neutral wording will keep cultural differences from interfering in feedback.

Rewarding customers the right way after collecting feedback

You need to take into consideration that customers sometimes won’t be open to sharing feedback as they will feel like it demands too much effort. You have 2 options: Simplify your data collection methods or offer incentives when you need them to extend their feedback. The main goal is to show them gratitude over their willingness to share their feedback not to influence their responses.

Managing data overload

When your business offers omnichannel support, having to collect feedback from each individual channel might become too much data to handle. Being able to analyze great loads of data without sacrificing quality might be too hard. Companies can leverage AI tools that can help them automate some actions like data prioritization. 

What is the importance of customer feedback

In a marketplace where customer support expectations evolve rapidly, feedback serves as the compass that keeps companies aligned with real needs and behaviors. The companies that listen, analyze, and act on feedback are the ones that adapt fastest and retain customers longer. So, let’s review why is customer feedback important for customer service:

1. Provides insights about customer experience. When you correctly collect and analyze customer feedback, you will be able to understand what is working and what is not in their experience. With that data you can tailor your strategies to tackle customer needs.

2. Helps you identify areas of improvement. Customers are willing to help you improve. Nowadays customers are not looking to buy once, they are looking for companies to connect with and create long lasting relationships. So, they need to trust you to share their honest thoughts. At the end of the day, you win if they feel safe to share exactly what they perceive about their experience as you will be improving exactly what they expect.

3. Helps you make informed decisions. Feedback is your customer’s voice, let it guide you into making the right decisions. Data is the best partner when it comes to building a strategy, as it gives you direction and you won’t be throwing guesses. Your decisions must be aligned with your business goals and those goals have to match customer’s needs.

4. Makes your customers feel valued. Feedback carries an emotional impact that few other business aspects can replicate. Why? Because customers know that their voice is heard and that they have a company that wants to keep them by their side. If you didn’t care, you wouldn’t be asking for their insights. 

Think of it as a romantic relationship, you don’t want to be with someone who belittles your opinions, who won’t improve their bad actions, and doesn't listen. So it is your responsibility to listen and act to keep them around.

5. Helps you develop business strategies. Positive feedback and reviews can help your business use them as a selling point where you show your potential customers you are their best option by showing testimonials. On the other hand, negative feedback brings the opportunity to create personalized strategies that show your customers that you are using their data to make their life easier with products and services they need.

6. Acting on customer feedback improves reviews. When you act on customer feedback, your online reputation will improve. This is a great relationship building strategy and marketing tool too. When customers see improvements, they are more likely to leave positive reviews, which at the same time makes new customers trust you and improves your strategies too. 

Your search results and sales look directly impacted by people’s opinions, so take advantage of this too. In practice, the cycle looks like this: feedback → action → improved service → better reviews → increased trust → higher sales. 

7. Helps you understand your customers better. Customer feedback also helps align internal strategy with external expectations. It bridges the gap between business goals and market realities, ensuring that leadership decisions reflect what customers actually want. Ultimately, feedback ensures every business initiative, from marketing to customer support, is built around genuine customer insight.

How to get feedback from customers

Customer feedback surveys

Customer feedback surveys are a feedback collection tool where questions help quantify customers’ opinions, so they can be analyzed in an effective way and tell a story based on quantitative and qualitative data. 

There are many channels that can help you distribute surveys, but you need to be strategic on which channels work best for your audience. Knowing your audience will also prevent pushing customers away by being too insistent and by optimizing surveys to a desired length. 

In-app support feedback collection

In-app customer support surveys are the ones that provide feedback about a customer’s interaction inside a company’s app. This is a strategic way to gather feedback in real-time and discover areas of improvement faster. You must understand your customers so specific and personalized actions trigger the surveys, show them they matter by thanking them and implementing changes based on feedback.

In-person interviews

Interviews are great ways to create open spaces for customers to better develop their feedback. Getting close to them will create conversations that will provide better context about an individual’s motivations and needs. An interview helps understand the “why” behind numerical data, by directly listening to what the customer needs to say. Analyzing both types of data, numerical and emotional, is key to comprehending why a customer thinks in a specific way.

Online satisfaction survey

Online satisfaction surveys are one of the most accessible and cost-effective tools for understanding customer sentiment at scale. Platforms such as SurveyMonkey, Typeform, or Google Forms allow businesses to distribute surveys widely and analyze responses efficiently. They’re useful for tracking progress over time, for example, comparing satisfaction scores before and after implementing a new feature or service policy.

Website feedback widget

Widgets are strategic ways of collecting feedback without adding extra steps, reducing customer effort, which enhances their experience. They are great to gather quick and specific feedback, but are not so great when it comes to understanding a customer’s context. The goal of having feedback widgets is to gather numerical data, as qualitative data would be too extensive to collect.

Focus groups

They are similar in goals with in-person interviews, the difference is that you can gather a group of people. Having a group will make customers feel safe about sharing their journey as they will have a tribe of individuals that share similar experiences. This encourages customers to provide honest and better developed feedback by having more time to express themselves.

How to use customer feedback to improve customer service

Collecting customer feedback is only the first step, the real value lies in what businesses do with it. Understanding how to use customer feedback to improve service transforms raw data into meaningful action. When companies systematically analyze and act on customer insights, they create a continuous improvement loop that strengthens satisfaction and performance. Businesses that close said loop demonstrate commitment to make customers' lives easier.

1. Analyze trends and recurring issues

Collecting feedback around customer service helps identify common pain points and emerging trends which at the same time prevents dissatisfaction on a great level. This helps your customer support team stay ahead of customer’s needs, enhancing experience and loyalty, which translates into a better CX and ROI.

2. Prioritize and act

When you have identified patterns, you can now start prioritizing them in importance, this helps you act on those areas that need to be taken care of first. How can you determine this? For instance you can select the most commonly repeated pain points, the ones that affect the most customers, or the ones that will have a better impact on satisfaction. Prioritizing shouldn’t be a difficult task, you can use AI and human experts to determine the higher stakes’ opportunities.

3. Communicate changes and close the feedback loop

If you prioritize, your customers will notice your commitment to act on their insights, but some of them will need to see a written statement. Updates can be announced through social media, website blogs, videos, emails, etc. What matters is letting customers know that their voice is being heard and used to improve. This way you make sure the feedback loop that started with asking your customers ends with solving the problem.

4. Train and empower teams

When you collect feedback, you can further analyze if the issue comes from employees needing to polish their skills. Customer service training is needed even on the best teams, as they need to constantly update their knowledge. 

5. Integrate feedback into business strategy

Finally, to unlock the full benefits of customer feedback, it must be integrated into a broader business strategy, not treated as an isolated task.

Feedback should inform decisions across departments:

• Product Development: Identify new features, fix usability issues, and align products with real customer needs.
• Marketing: Refine messaging to highlight the benefits customers value most.
• Operations: Streamline processes that customers find confusing or frustrating.
• Leadership: Use customer sentiment as a performance indicator for long-term strategy.

Your support teams need feedback to grow

Businesses that ignore customer’s voices will not thrive, instead their customers will grow tired of wasting their time and that frustration translates into negative revenue. Your customers are not bothering you when they come with a suggestion or complaint, they want you to listen so they stay with you. 

They are not looking to buy once, modern customers are constantly looking to establish relationships with companies. They want their insights being taken seriously and they want to see personalized offers to stay loyal. Companies that understand this will transform even negative feedback into positive outcomes.

At Horatio we believe in the power of customer feedback and using data to transform customer experience into a revenue driver. That’s why we listen to our customers when building a solution for them, they are not waiting for us, instead they are actively participating in the process. Contact us and let’s create a personalized experience for your company that your customers will adore.