A child sees a beautiful blue glow coming from the stove, just above eye level. It’s so mesmerizing, he just has to touch it. He reaches out… and he instantly receives feedback: It hurts! He learns not to do that again. A few years later, the same child receives an academic award for his performance in school. He brings it home to his parents and they shower him with praise and gifts. Externally, he enjoys the rewards. Internally, he is satisfied by a job well done. Being good at something, he realizes, feels good and gives you a sense of purpose and satisfaction. He keeps doing his best in school. Inputs influence outputs. Effects flow from causes, which are the effects of a previous set of causes, and so on.

A feedback loop is a process by which the outputs of a system are rerouted back as inputs. In other words: action leads to consequence, and consequence leads to continuing or changing course. Feedback is the basis of all learning and growth. We act in the world, and those actions have positive or negative effects on us or others. We learn what is right and wrong, and if we’re rewarded correctly and experience consequences correctly, we do more of the good things and less of the bad things.

In business, however, the feedback loop isn’t as simple as “touch stove, get burned, stop touching stove.” Not all feedback is equal, and in order to learn from feedback, we have to understand the relationship between our actions and the feedback we receive. Whether you’re dealing with dozens, hundreds, or thousands of customers, there are a lot of different desires and expectations to account for, and they have to be understood within the context of your goals for your business. If the goal is providing a great customer experience and maximizing customer lifetime value, for example, you would need to constantly collect relevant customer feedback about their experience and why or why not they return to buy again. Then you analyze the feedback, develop a plan, implement changes, and follow up with customers.

Collect Feedback

If you’re trying to learn something new, you’ll want encouragement and motivation, but you don’t want someone who will only tell you you’re doing a great job. You also need critique. You need to know where you need to improve. It also helps to get a second opinion. When it comes to customer feedback, you’ll want as many as you collect, whether that’s a third or fourth or hundredth opinion.

Collecting feedback from different venues will give you that range of feedback you need to get an accurate picture of your performance. Feedback can come from web forms, email surveys, customer reviews (both on your website and on external sites like Yelp), and salespeople interacting with customers. CRM integrations allow you to search social media posts for mentions of your business and associate comments with the file of the customer who made them.

Categorize Feedback

All this data is only useful if you categorize it in relevant ways. At the highest level, you can categorize feedback by product feedback, marketing and sales feedback, and customer service feedback.

Product feedback includes comments regarding product quality, functionality, durability, features. Consider comments about what your products do well, what they do poorly, and what they don’t do but customers wish they did do. Some of this feedback will be urgent and will need to be acted upon immediately, such as in the case of bug reports to software developers.

Marketing and sales feedback helps your marketing and sales teams refine their messaging and sales processes to ensure you are reaching the right leads and customers in the right way.

Customer service feedback helps improve the customer experience by giving you the data you need to refine your customer service processes.

It is a good idea to categorize feedback according to urgency. There are issues that need to be addressed immediately (such as broken links on your website preventing customers from making purchases) and issues that can wait until more pressing problems are solved.

Analyze Feedback

Feedback must be contextualized to determine if negative feedback points to one-off occurrences or systemic issues within your business. For instance, you may have received a few complaints about long lines, but they were isolated incidents where your POS was down for a few hours or a busload of high school football players pulled up to your restaurant for post-game ice cream.

Implement Changes

Before making any changes, create processes for implementing changes based on customer feedback. Frameworks like lean management can help you create fluid processes for solving problems.

Follow Up With Customers

Follow-up lets customers know you’re listening. A timely message detailing the problem and your solution will go a long way toward winning back a customer who would have otherwise been gone for good. In your CRM, you can segment follow-up email sequences by complaint category and automate responses so that the right messages get to the right customers.

Acting on Feedback Drives Growth

Good customer service drives repeat business, which drives growth. Especially in industries, both in B2B and B2C, where everybody is selling more or less the same products, what elevates you above your competitors is the customer experience across the whole customer journey, from discovery to post-purchase service. Creating effective feedback loops is how you consistently identify and solve the problems that cause friction for customers.