7 Ways to Use Negative Customer Feedback to Beat the Competition You can learn a lot about -- and how to improve -- your company from unhappy customers.

By Jeremy Gin

Opinions expressed by Entrepreneur contributors are their own.

"Your most unhappy customers are your greatest source of learning." -- Bill Gates

Negative feedback from customers can be a hard pill to swallow. It often feels unjust, unhelpful and inaccurate. Even the most professional business owners can be defensive and emotional in the face of criticism. And while business owners may intellectually know negative customer feedback is critical to improving their business -- a 10-percent increase in Net Promoter Score (NPS) can correlate with a six to seven-percent increase in revenue -- the hard bit is constructively incorporating it.

Related: Got a Bad Yelp Review? Here's What to Do

The following are seven things every business, small or large, can do to extract as much value as possible from negative feedback.

1. Gather competitive intelligence.

While you likely monitor your own reviews closely, it's also important to scour the public reviews of competitors. By reading their reviews, especially negative ones, it's possible to get a sense for how your products and services stack up to theirs and see if their customers have similar complaints. Careful reading of competitor reviews can also help you determine their weaknesses and find opportunities to win over their customers.

2. Benchmark performance against industry.

If 60 percent of your customers are very happy with the service they received, is that good? How does it compare to others in your industry? SurveyMonkey offers a tool to help you gauge this using their benchmarks. Similarly, some review sites offer detailed customer ratings on metrics such as service, value, quality, returns and shipping, which can also be used to benchmark performance.

For example, to discover how your shipping options compare to the competition, compare your customer ratings on shipping to the average rating for five to 10 competitors.

3. Revamp products, services and marketing.

To be clear, one bit of negative feedback does not always mean you need to change your business. But, should you spot a pattern, say 10 customers all have the same complaint, you can be sure that many more feel the same way.

Direct feedback from customers can be a great way to shape the evolution of products and services your business provides. And while large product and service changes can be costly and will not always make business sense, smaller changes to marketing and product language can often make a big difference in setting customer expectations and improving satisfaction.

For example, if customers are confused by a return policy currently buried in a link, it might improve customer satisfaction to clearly display the return policy to be sure customers can read it before making a purchase. Even if the change results in a few lost customers upfront, making other customers happier could well be worth it.

Related: The Loudest Consumers Don't Always Represent the Majority

4. Train employees.

Making customer service and sales people continually aware of common customer complaints and how to deal with them can be critical to retaining customers. Formalizing this process by creating a simple training and feedback loop for your staff can make a big impact in your business. Leading management consulting firm, Bain, describes some best practices for this process.

5. Track improvement.

This is a given for most data-driven businesses, but as changes are made to your training, products, services and marketing, carefully monitor how it affects your feedback. Whether using Net Promoter Score or public reviews, let changes in feedback over time be your eyes and ears as you make decisions. And with each change made, calculate at least a rough return on investment (ROI) to determine if it was worth the effort -- and whether similar changes in future make financial sense.

6. Gain unique market insight.

Markets can change so rapidly, it's easy to get left behind. An old-fashioned industry like taxi cabs can get swept away overnight. While businesses can't prevent this completely, staying closely in tune with the needs of customers can help you peer into the future and see where your market is headed. So if your customers are complaining about how your product doesn't work with their drone or virtual reality headset, you can be the first to understand how that will affect your market and business.

7. Retain unhappy customers and prevent damage to your reputation.

The business aphorism goes like this -- "It costs five times more to replace a customer than retain one." While the precise value varies, it's likely that most businesses tend to under-invest in retaining unhappy customers. The good news is that 95 percent of unhappy customers will return if their issue is resolved quickly.

If the negative feedback has been left on a public review website, it's important to immediately reach out to the customer both publicly and privately to offer a resolution. And even if you can't reach a resolution, a thoughtful, professional and polite public response can prevent any loss of future customers who might read it.

Related: Why Online Reputation Management Is Like Brushing Your Teeth

Wavy Line
Jeremy Gin

CEO of SiteJabber

Jeremy Gin is CEO of SiteJabber, a leading community of online business reviewers. The company recently launched SiteJabber for Business, the only completely free review and reputation-management platform, disrupting the practice of charging businesses to manage their reputations. SiteJabber's more than 750,000 member community has reviewed more than 55,000 business and helped more than 40 million consumers find reputable businesses.

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