Published 11/15/2010

Responding to Customer Feedback

Every so often, companies receive some type of performance feedback from a customer. It’s interesting to note the differences in how companies respond to such feedback.

Wayne Chaneski

President, Smart Manufacturing Solutions

Some companies will immediately assume a defensive posture, ignoring anything positive and focusing exclusively on the negatives. They may even spend countless hours collecting information that proves the customer wrong or unreasonable. Pursuing this course of action is quite risky and may alienate some customers. On the other hand, some companies treat any type of customer feedback as a “gift.” To them, it provides an outsider’s perspective on how they are doing and, perhaps more importantly, an opportunity.

All companies like to be told they are doing well. It reinforces the fact that current practices are working. Companies love to share positive feedback with all employees. It is common to see customer accolades posted in lobbies, lunch rooms or other highly visible areas. Although no company wants to receive poor feedback, this can be even more useful because it can launch the changes needed to improve the business and alter a customer’s perception.

I believe a company that receives any type of performance feedback is most fortunate. It takes effort for a customer to provide feedback. In fact, it can be argued that in providing feedback, the customer is demonstrating a desire to help the company better itself, which is in everyone’s best interest.

So what is the best way to respond to customer feedback? While there is no harm in spending a little time ensuring the feedback’s accuracy, companies should not let this be all-consuming. It’s true that there may be times when customers interpret data or record metrics differently from the company. (A common example is an
evaluation of on-time delivery—the customer may be measuring deliveries against “requested dates,” while the company is using “promised dates.”) However, the customer is striving to provide feedback using information they believe to be accurate. Companies should take that into account in their response. Remember, most customers don’t expect overnight corrections, but they do want you to understand their concerns and take appropriate action in a reasonable period of time.

One company I have worked with received a scorecard from its largest customer. As with most scorecards, it included a list of key supplier performance indicators and a rating on each of those indicators. The customer did not surprise the company with the scorecard. On the contrary, it presented the scorecard after spending time at the company and describing its new supplier evaluation program as a tool to help it become a “world class” company. The scorecard was presented in a very non-threatening manner, and the customer even provided the company with an opportunity to correct anything it may have done wrong, or omitted, in the evaluation. This scorecard rated the company either positively (actually using the description “things we like”) or neutrally (using the description “things we think you can improve”) on most performance indicators. However, there were some indicators on which the company rated poorly (described by the customer as “things we are concerned about”).

The company took an interesting approach in its response to the scorecard. First, it thanked the customer for taking time to provide feedback. Next, the company provided some additional information that actually changed ratings on a couple of performance indicators. The company then arranged a management team meeting
and reviewed both the neutral and poor ratings. Then, it prioritized each based on effort involved and impact expected (issues involving the least effort and highest impact received the top priority). Action plans were developed for the highest-priority items. The company then forwarded the action plans to the customer as a means of demonstrating its commitment to making the needed improvements. The company even explained the actions being taken to continue to do the things the company liked.

This company used its customer’s feedback as a road map for its continuous improvement efforts, and its actions further cemented the strong bond with its largest customer. I can think of no better way to respond to customer feedback. More importantly, the customer felt the same way as it expressed “delight” at the response of “one of our most critical supply chain partners.”