This Is Why You Should Never Ignore Customer Feedback Criticism is tough to take until you discover that it's a gift in disguise, potentially leading to your next great opportunity.
By Neil Peretz Edited by Amanda Breen
Opinions expressed by Entrepreneur contributors are their own.
In the era of social media, never has the phrase "everyone's a critic" been more accurate. Reputation matters — even in purely transactional businesses where you may never deal with the same customer ever again.
People visiting your city for the one and only time who buy a coffee from your shop are still capable of posting a review on Yelp! or telling a friend via a public comment on Facebook.
It's inevitable that occasional customer experiences don't go as planned, sometimes for reasons beyond your immediate control. What you can control is your business's response and ability to learn.
First and foremost, you should always consider negative customer feedback a gift. Customers can go away angry or dejected and not mention it to you. Offering feedback takes effort for customers; while they may be upset, they're showing that they care about you. More importantly, negative criticism creates opportunities for your organization to learn and improve and possibly even discover new market opportunities.
Related: How to Make Negative Feedback Work for You
Creating opportunity out of criticism
When someone offers your organization feedback, you need to make sure you have channels to capture it and share. Have a system for everyone in your organization to record and circulate customer feedback — even the hourly, temporary workers should be taught about this system and how to access it.
At one company where I served as general counsel, we provided financing to users of prepaid cell-phone service so they could acquire a smartphone, which helped them apply for jobs and manage their lives when they might not have regular Internet access at home. We monitored customer feedback carefully.
In addition to fielding and responding to occasional queries and potential concerns about how our service might work in particular circumstances, we identified a pattern within the feedback: customers expressing dismay that the store they visited was out of stock of the smartphone the customer most desired.
The solution to this problem fell outside the bailiwick of our responsibilities; however, it still impacted our business, so we seized the opportunity to investigate. We asked the cell-phone retailers where our cell-phone financing was offered why they didn't have a deeper inventory. What we learned was that while the stores were often profitable, smartphones — even at a wholesale price — are expensive and these stores, many of which were independently owned and operated by small business people, lacked working capital to carry a large inventory.
The lightbulb went off. We were already in the business of financing and had developed extensive relationships with capital sources and banks. Could some of them help the independent cell-phone stores we dealt with? What we discovered was that certain banks could provide quite affordable financing if the loan application qualified for a Small Business Administration (SBA) guarantee.
Related: A Beginner's Guide to Qualifying for an SBA Loan
However, the process of applying for an SBA-guaranteed loan could be challenging for these small retail businesses. They needed to assemble a wide range of background materials to support their application and then find out which banks were comfortable with that type of business.
A new venture
A new business, called SmartBiz Loans, was born. SmartBiz focused on helping small businesses decipher what could otherwise be a long, complicated application process filled with demands for documentation not readily at their fingertips. After ensuring completion of the most accurate and high-quality application, SmartBiz helped identify which banks were the right fit for each type of business applicant.
Rather than saying, "Hey, that's someone else's problem," we identified an opportunity to use our unique skills and relationships to help more people in the small-business ecosystem.
Related: How Silicon Valley is Changing the Fintech Space
Now, in addition to cell-phone retailers being able to support greater inventory for their customers, a broad range of small businesses across America have a better opportunity to avail themselves of affordable, SBA-guaranteed financing, even if they lack the financial and accounting prowess required for typical commercial-loan applications and don't have relationships with or geographic proximity to banks that can understand their business model.
It all began with paying attention to customer concerns.
