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Listening to Feedback Is How You Fight Customer Attrition Customers are talking more than ever -- review sites, social media, or on a company blog's comment string -- but few business owners are listening and taking it to heart.

By Chris Campbell

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.


During the middle of the 20th century, a quality product was the ticket to a successful business. Fast forward to today, and it can be argued the combination of a good product and a customer's experience with the brand will determine the degree of their loyalty. With the choices consumers have in this economy, it's easy for them to move around. No, I am not talking about exercise. Consumers have the option to choose without feeling the need to be loyal to a brand most of their lives -- from restaurant to restaurant, from bank to bank. If the customer doesn't like the experience, they will find another business to spend their money at.

There are several ways to use customer feedback to fight attrition rate, which is the percentage of customers who stop using a product or service and are no longer loyal to your business.

Customer loyalty and success are closely connected. With attrition rate in mind, imagine a 39-year-old architect a loyal customer to a bank for two years who writes several online reviews about her experience.

The reviews she writes are mostly positive, with some constructive criticism mixed in. "The franchise could be open one hour later, so I can go after work," the customer might say. "As an architect, I work long hours." She also expresses this same concern to the tellers every time she goes to the bank.

In a recent study from ReviewTrackers, it was discovered that customers who write online reviews expect a response from the business in seven days or less. But the bank never takes her feedback seriously and never responds. Slowly, over time, the customer leaves and finds a bank that's open later.

Related: Customers Are Not Always Right. They Are Just Never Wrong

Why do businesses have attrition?

Globally, businesses have attrition because of increasing competition.

"Growing competition in various business fields is ensuring a plethora of options for customers to choose from, resulting in little hesitation to move to competitor brands if quality of the service or product is seen as inadequate," according to a press release by Global Industry Analysts, Inc.

Feedback helps you understand your customers.

Feedback provides businesses with a better understanding of their customers, and feedback is essential to knowing what exactly it is you could be doing better, problems you might have otherwise not known about. Imagine you own an automotive dealership and your sales team takes too long to meet with an incoming customer.

To you, the 15 minutes it takes for an automotive salesperson to get ready to meet with a new customer is not that long, and the customer can wait. But to some of the potential buyers, 15 minutes is too long, and you only know because they've expressed their unsatisfactory experience on online review sites.

Using this feedback is important for the customer experience.

"Thanks to social networks, price comparison websites, and online reviews, the typical customer has higher expectations and greater knowledge than ever before," according to an article by ATKearney.

Related: 7 Ways to Use Negative Customer Feedback to Beat the Competition


Brand loyalty is usually about the customer's satisfaction but there are some exceptions. In the hospitality industry, for example, customer relationships influence customer loyalty, as identified in a study published in the International Journal of Management Cases. There are three different parts to the "relational benefit," which are social benefit, trust, and special care. These factors play a role in customer loyalty, particularly for the service industry, according to the study.

"Customer loyalty describes both the commitment to a certain business or brand and the commitment to the products or services of that business or brand," the authors write.

Customer feedback can be used as a loyalty-barometer to ensure customers are loyal and committed to what your business is offering.

What about other retention strategies?

Companies have been trying to retain customers through a strategy that usually consists of two steps -- ranking the customers who are most likely to depart, then offering incentives to the group most likely to leave, according to a study by Sunil Gupta, professor of business administration at Harvard Business School. But this strategy is flawed because it doesn't maximize profit, according to the study.

Related: With the Right Incentives Loyal Customers Will Become Brand Advocates

Why manage customer feedback?

Gupta provides a new model for retaining customers as one way to manage customer churn, or attrition. But the bottom line is that providing incentives may not be the customer's feedback. And while there are other forms of retention strategies, customer feedback reveals the many details that make up the customer experience specific to your business, like the colors and brushstrokes of a painting.

You understand your experience owning a business. You enjoy working with patients and helping them with their health. Or maybe you own a local restaurant because you dreamed about creating the top diner in town with pancakes almost as delightful as homemade.

As an entrepreneur, you keep in mind the customer experience you are working hard to maintain -- or create for a new customer.

But in competitive industries, working hard is not enough to keep your customers walking through the doors. What are your customers trying to tell you?

Chris Campbell

CEO of ReviewTrackers

Chris Campbell is the CEO of ReviewTrackers.

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