The Secret to Retaining Unhappy Customers and Empowering Happy Ones Here's how to close the feedback loop and enhance your brand in ways you haven't even thought about.

Modern businesses can use all sorts of tools, including automation, to collect information about what customers think, want and do. Many companies unfortunately don't tap all of the potential concealed within that data. Closing the feedback loop and creating a solid sequence of two-way communication can improve how happy customers are with you and empower your happy customers to be valuable ambassadors for your brand.

The importance of a two-way relationship

Customer feedback allows you to spot and fix small problems before they balloon into big issues. It's thus a viable tool to reduce churn, manage risk and protect your reputation. Even when you're operating well and customers generally are happy, listening to what people are saying can bring them into your innovation process. They can have a much more direct influence on what you offer and how you design. You also have the chance to let them advertise for you, such as offering coupons for referrals.

Despite these benefits, the number of businesses that don't take full advantage of a closed feedback loop is high, and they stand to lose out on profits and market share, even though those losses are entirely preventable.

Related: Want Customers to Stick Around? Get Their Feedback From Day 1 (and Keep Doing It)

Why so many companies still have a feedback gap

Companies often struggle to close the feedback loop because they do not create a clear process for what should happen after they collect information from the customer. They might not specify, for instance, who should see the information first, or that they have to filter the data according to defined parameters. They can also have problems with technical infrastructure,where it's not clear what hardware or software is necessary, or they don't have integrations available to perform beneficial tasks.

This issue relates to data democratization and the traditional, hierarchical approach to business. Once companies have information about the customer, they typically do not make that information available company-wide. Employees have to work with the information in fragmented ways and might not be aware of everything other departments are working to do. That lack of cohesion complicates internal efforts to understand the big picture of the customer journey, ideal next steps or the kinds of resources the business can use to reach out.

Related: 3 Ways You Can Let Your Customers' Stories Speak for Your Brand

When you can, automate

Closing the feedback loop requires your employees to attend to individual customers. If a customer submits a negative survey, for instance, an agent should be able to step in, contact the customer and take customized steps to improve their satisfaction level so that they don't leave. But this doesn't mean that the processes you develop for closing the feedback loop must be entirely manual. You could have a system, for example, that automatically triggers a notification to an agent if a net promotor score drops below a certain level.

Amazon is a business that integrated automation successfully to close its feedback loop. The size of their business meant they had to work with millions of pieces of feedback and that a manual process wasn't practical. They created their own solution by implementing machine learning and developing customized algorithms that would trigger follow-ups. They carefully tagged the customer data to ensure that messages were properly personalized to build trust, and they encouraged customers to view the changes Amazon was making. The end result was that customers who participated were more likely to recommend the company.

Simple best practices

No matter the size of your business or specific industry it operates on, the sheer amount of data available from customers means you have to stay practical as you organize, analyze and respond. Small-business software expert Kathleen Carroll recently outlined three best practices to follow for Motley Fool:

"Focus on the product first. Customers likely will tolerate other issues better if your product is excellent."

Respond to every customer. This doesn't mean you have to tailor every answer. But do respond so that customers feel heard and understood, and don't leave issues hanging."

"Apply the Pareto principle. Resolving 20% of complaints typically will solve 80% of customer issues. So look at where you can have the greatest impact and focus your efforts there, rather than worrying about fixing everything.

Within these guidelines, there are generally six key elements of closed-loop design, including:

• Identifying the business goal/value in closing the loop.

• Segmenting customer follow-up topics.

• Instituting a follow-up timeframe.

• Creating a map that defines rules for how to follow up or escalate.

• Create a tracking system to conduct root cause analyses.

• Measure and share success.

Broadly, we can view closed-loop management on two levels. The inner loop deals with individual-level feedback from the customer, whereas the outer loop involves the entire organization and might require strategic changes to policies, pricing or other elements.

Related: How to Maintain a Relationship With Your Customers by Learning What They Need

Does your company have the two-way communication necessary to thrive?

Closing the customer feedback loop might require you to make significant changes to the way your business is organized or the tools it uses. It's worth the investment, however, because of the extent to which the customer relationship solidifies your operations and market position. Setting yourself up for a closed feedback loop can also help unify the company as all of your employees gain access to customer data and know their role in applying it. And it can include automation so your team stays efficient.

So don't drop the ball. Ask yourself whether you're really creating the two-way communication you need to let all of your customers be happy and work for you. If you're not, today's a great day to be proactive and change.