Most customers today have completed satisfaction surveys at the request of a firm they've done business with, only to have that company ignore the feedback it requested. The risk of doing so—of not using that insight or following up to say how the feedback was used—is to alienate the customers you need most: those who are engaged enough to share their opinions and suggestions.

Paying lip service to appreciating customer feedback—"Your voice is important to us"—without demonstrating its value through follow-up or demonstrable changes in a company's actions will only carry go far, says Will Wittkopf, senior director, global loyalty marketing, Carlson Marketing Worldwide.

"It's really about trust. It's implied when you're asking for feedback that you'll do something with it and about the issue being addressed," he says. "Don't overpromise or underdeliver on promises. And don't ask if you don't want the answer."

But once you have asked, it's time to act.

Setting reasonable expectations about what a company will do with its customer feedback is a crucial first step. That starts with having a clear understanding of why such data is being collected in the first place.

"Many firms don't have a clear strategy," says Gartner managing vice president Scott Nelson. "If they are gathering feedback, it's more about looking good to the customer and hoping that maybe something magical will happen over time."

A clear feedback strategy usually requires that those specific goals are agreed by everyone impacted by the customer feedback in question, potentially ranging from store or district managers to the CEO. "Doing a customer satisfaction survey only gets you so far," Nelson says. "If you're looking at customer satisfaction on a scale of 1 to 7 and you don't have some sense of what a really good number would be, you're really missing out. Let's say that two years ago you had an average score of 6.1 and last year you had a 6.3…well, I guess you're showing improvement. But how much did you spend to get there, and is 7 the goal, and so on."

Follow through and follow up
Once expectations have been set internally, they also need to be set with customers. According to Melissa Read, Ph.D., vice president of research and innovation at Spunlogic, it's important to let customers know when asking for their input that their feedback will be used to benefit customers like them—not necessarily just themselves individually—and that changes will most likely be made based on common issues that many customers experience.

Although it may seem like Feedback 101, following up after receiving feedback has its own set of complications. Generally, following up with customers, even with a generic "Thanks for your comment" note, is usually a good idea. "Customers like to know their input was heard and something is being done," Nelson says, adding that a pro forma response probably doesn't fool anyone, "but it's better than the customer seeing a blank wall."

However, the impersonal nature of an automated response may sometimes not match the original inquiry or be so off-message that "you're telling your customers, 'We don't care and we're not trying,'" says Carlson's Wittkopf. "Send an acknowledgment only if it makes sense." He notes that at Lands' End, where he formerly worked, the company responded in kind to every piece of email or postal mail it received, regardless of whether it was a compliment or complaint.

"You don't have to do that," he says, "but with a brand like Lands' End, which is all about being salt of the earth, it fits."

At Yahoo!, where a single month can net 100,000 comments, "it's obviously unrealistic to expect a product manager to read and respond to them all," says Devon Child, senior product manager, feedback platforms. Instead the company makes it clear on its feedback forms that, while it values customer feedback, it cannot reply to everyone. Child explains that Yahoo! uses an Island Data system that allows the company to aggregate feedback and highlight recurring issues or problems, which then can be addressed quickly. Yahoo! has also established its own internal platform, Tango, as an interactive, two-way feedback forum with a message board–like application for users to make suggestions on which other customers vote and comment; Yahoo!'s product managers moderate the forums and note when something has been fixed or updated.

The process is similar to Dell's IdeaStorm, an online forum where customers can share ideas for improving products and services and then comment or vote on each one; the most popular work their way up the queue for Dell's review. The forum is predicated on being transparent, according to IdeaStorm community manager Caroline Dietz. "Customers can see not only the original feedback, but also when we responded," she says. "It allows for a two-way conversation online in a very informal way.

"Customers are going to talk about your company anyway," Dietz adds, "so you can jump in and talk with them or, with IdeaStorm, write back and forth—or you can sit back and never hear what they're really saying."

This type of community is like an ongoing focus group that harnesses not only one person's feedback, but other customers' opinions of those opinions. "We can watch what tens of thousands of people think, go over those numbers, and then make a decision," says Bob Pearson, vice president of communities and conversations for Dell. "In the past it was usually about doing focus groups in two or three cities, with eight to 10 customers sitting around a table being asked questions. That's such a stilted environment, versus being a dynamic place to give feedback and vote."

A tab on IdeaStorm, "Ideas in Action," shows the progress being made on a particular issue in a very public way, Dell's Pearson notes. "We've had 37 or 38 ideas actually implemented since our launch," he says. "But we're not just sitting back and waiting for ideas to come in; we also go out and find problems and solve them in real time." One problem that Dell was able to tackle revolved around operating system Linux. When a new series of desktops and notebooks was about to launch last winter, Pearson says, IdeaStorm "got over 100,000 responses in 10 days that were very specific about what they wanted," which was the Linux system. By mid-May, Dell was sending out the first consumer systems with Linux on them. "Of course, this wasn't as big a job as a complete overhaul," Pearson says, "but it still was not a small project."

Forums and chat rooms aren't the only means of creating a community and garnering feedback. One perhaps surprising option is tracking online rating systems. "Customers are very willing to talk, and are generally glad to have been asked what their opinion is," says Brian Stephenson, e-commerce manager at Soft Surroundings. The women's clothing and household accessories firm instituted an online ratings and review system in May 2007, and Stephenson says the company was surprised at how many personal anecdotes, beyond a simple thumbs up or down, have resulted.

"I was expecting [the reviews] to be more merchandise-focused," he says. "Instead, it's shown us that they're not just customers in an abstract sense, but real people, who reveal their humanity in their reviews."

As an example, Soft Surroundings operations manager Diane Cox cites an unspecified "beauty item" that sold well in stores but consistently scored poorly online. "It turned out that the at-home customer was not being given enough instruction on how to properly use the product," she says. "It does well in the stores because our on-site beauty consultants can demonstrate how to use it."

The product was ultimately taken off the company's online store. While Soft Surroundings usually does not respond directly to reviewers, Stephenson says its customers do receive an email invitation to review their order within 48 hours of arrival date. Accountability internally and externally When follow-through is required, it generally will only happen if employees are held accountable for taking action on customer feedback. Having processes in place to support this is important. Managers of banks owned by holding company Zions Bancorporation, for example, can go online, input their I.D. number, and, through an enterprise feedback management platform provided by Allegiance, track which employee last looked at a particular customer inquiry and view what progress has been made.

"Internally, there's a manager of all feedback who can view who last received that feedback, delegates it out, and that starts the clock," says Erica McIntire, director of marketing for Zions affiliate Vectra Bank. An internal service-level agreement mandates a response within three days, "but informally we try for 24 hours," she says. The customer receives an automated note that her feedback has been received and that a response will be forthcoming.

A system of escalations then goes into effect; if the query has not received a response, the appropriate employee will receive an alert at the three-day and five-day mark, after which "it comes to me, and I find out why that person has not responded," McIntire says.

"By responding to the customer the organization makes an external commitment," adds Claire Howells, vice president of organization, engagement, and communications at Zions. "And the employees are aware of that, which internally helps motivate them. It gives them a sense of obligation to respond."

Hertz also employs an escalating alert system, developed by MindShare. "Each location manager has his email address on MindShare," says Brian Dickerson, staff vice president, worldwide customer services administration, at Hertz, "and if a customer gives a particularly low score, that generates an immediate email alert to that manager, who now has the means to follow up quickly."

Upper management can track all scores, as well as progress being made on outstanding issues. The system also allows them to inquire as to why someone hasn't received a response. As a result, Dickerson says, response to feedback is now "daily in many cases."

Hertz CEO Mark Frissora reviews a global summary of survey results every Monday morning; he then delivers an overview of those results at each board meeting. "There is no ceiling to how the results are used," Dickerson says, adding that Hertz feels such an approach means no ceiling to accountability: Everyone from lot employees to the CEO has a vested interest in survey results.

How customer voices can count
Customer feedback is unquestionably valuable. But like any marketing tool, it should be measured to prove that value. Companies can measure the impact of customer feedback in myriad ways. "We get daily feedback reports," says Shannon Glass, director of Internet operations for Bath & Body Works parent company Limited Brands, "so if scores suddenly go from 4s and 5s to 3s, we can jump on it quickly."

Glass cites as an example a recent change to the company's Web sales strategy. After the retailer decided to offer four retired fragrances for sale on an online-only basis, customer feedback encouraged the company to add another three. While Glass has no sales or satisfaction scores to impart, anecdotally, she says, "We've noticed a growing number of store visitors now commenting on how they've come in to find something they saw on the site, so it really is becoming a multichannel effort."

Leasa LaRocca, president of property management firm Trillium International, says its Customer Experience Management program, with surveys created using Vital Insights, has resulted in immediate improvements in amenities at several of its properties, and a vast increase in efficiency in dealing with lease renewals. Additions of speed bumps in parking lots and hand sanitizers in exercise rooms have come as a direct result of the surveys, she says, while a combination of property managers' personal observations and surveys about community events also pays dividends.

"The concept of community is very important to us," she says. "Now when someone is at the end of their lease agreement and it's time to renew for another year, we can send a very personal letter, noting their attendance at a pool party in April, the volleyball tournament in August, seeing their dog at the pet party last Saturday, etc."

As a result, she says, Trillium is currently receiving a 52 percent conversion rate of a given month's possible renewals, with the number steadily rising; she's targeting 68 to 70 percent by the end of 2008. Vectra Bank has seen feedback submissions double since using the Allegiance system, with response times decreasing from two weeks to 24 hours and resolution times dropping from 31 to five days. "The Allegiance feedback system has saved us 70 percent over manually handling feedback ourselves—and that's for managing the collection, entry, follow through, and roll up of just our basic feedback," McIntire says. The system "saves us hundreds of thousands of dollars a year, as well as improves our ability to build relationships with customers," she adds.

Dietz says Dell has not been tracking its customer feedback strategy's impact on loyalty or the bottom line per se, but adds, "On an anecdotal basis, when we implement a customer's idea and tell them we're launching tomorrow, they feel a sense of ownership and get very excited. There is an absolute connection with customer loyalty," though as yet Dell has no hard data to illustrate that.

"Building great products and providing great service are what people want," says Dell's Pearson. "You have to get the fundamentals right. We're seen as a metrics-driven company, but the reality is: Are people happy with what they're receiving?"

Asking customers is the best way to find out. But Yahoo!'s Child sounds a note of caution about customer feedback. "The percentage of users who show up in these forums is very important to us, but it's a bell curve," he says. "They're usually the most satisfied and the most dissatisfied. They're hardly the majority, so it's important to act—but not to overreact."