With various industries growing and flourishing, there has been a tremendous increase in the level of competition among companies. In order to stay competitive and offer the best customer service experience, it is essential to develop an effective feedback mechanism. If a company is able to generate honest, periodic and insightful feedback, it would help reduce costs too. Some of the ways through which feedback can help reduce costs are as follow:

Effective Feedback Mechanism Would Eliminate Wastage

If a company knew exactly what the customers need, it would not spend resources on the production of products and services which are no longer in demand or valued in the market. For example, many companies kept producing film cameras for photographers, even though not many were ready to invest in an analogy camera after digital cameras were available in the market. If they had established a better feedback mechanism, they would have avoided wastage and losses. The above example also shows that feedback from the customers’ needs to be timely, because any delays would mean companies going ahead with the production plans that could result in losses.

Evaluate Product Demands

The presence of an effective feedback mechanism will also ensure that companies remove all redundant features and activities from their products and services. Instead of continuing to spend thousands of dollars on marketing and trying to make a product work for the consumers, it is better to spend effectively to collect feedback, so the company knows what customers are really looking for and how it can provide them that. Features or additions to products which are not valued by the customer should be eliminated, since they incur costs on both the company and the customer.

For example cafe’s and bakeries often introduce new items on their menu’s for their customers and continuously monitor the sales and feedback of those items to see what customers have to say. Items are often pulled off the menu when there is a low demand or if they don’t match customer preference. This helps them save costs, by not producing items that go to waste. It also saves them the advertising cost that would go into attracting customers.

Streamline Company Processes

Streamlining the processes of a company based on customer feedback will make the structure more efficient, result in better service delivery and reduced cost for companies. When it comes to service industry, where there is personal contact between customer service representatives and the customers, it is essential to recognize activities that are superficial in nature. Honest customer feedback can help companies make processes simpler and more convenient for customers. For example, customers hate waiting in line and not knowing how long the wait is at a busy bank branch. Therefore, if the branch introduces a scheduling system which involves generation of tickets, this would assist in streamlining its queuing system.

Once these tickets are issued, customers can be called up according to their turn determined as per their token number. Streamlining the queuing system not only adds to convenience for the customers, as they would not have to stand in line for their turn, but this will also save costs for the bank, since less staff would have to be hired to manage.

Long-term Customer Relationships

If a business is able to develop a relationship with its customers, it would enable smooth flow of communication. Effective communication would mean a result-oriented feedback mechanism. If businesses interact with customers regularly, they would know exactly what matters to the customers. For example, little tweaks in products and services can enhance the customer experience. In order to stay ahead of the competition and meet the ever-changing customer demands, it is essential to receive feedback on regular basis. Offering smooth experiences ensures customer satisfaction and develops customer loyalty, protecting the company from losing customers and saving the cost of winning them back.