Customer Feedback Analysis Guide in 2024

Customer feedback analysis is critical for any company looking to improve its products, services, and customer experience. It is the practice of gathering, analyzing, and interpreting customer feedback better to understand their needs, preferences, and concerns. More than 75% of CEOs believe that customer insights gathered from customer feedback analysis are crucial for business growth, yet 80% of companies do not use advanced analysis methods in gathering insights.¹

In this article, we’ll go over why customer feedback analysis is important and how to analyze it and act on it to improve your business.

Why is it important to analyze customer feedback?

In the US, 65% of customers are impressed more by a positive experience with the company than great advertising.² To provide a strong customer experience, companies must ensure that they know their customers’ preferences, understand their needs, and provide services or products in line with these. To accomplish this, businesses collect customer feedback data and conduct customer feedback analysis.

Top 3 benefits of analyzing customer feedback

1- Better customer service

Analyzing customer feedback can help businesses understand what customers like and dislike about their offerings and identify areas where changes can be made to increase customer satisfaction and loyalty. Companies can build long-term customer relationships by making data-driven decisions and continuously improving the customer experience.

2- More business growth

Customer feedback analysis is a critical tool for businesses seeking to grow. Companies can identify areas for improvement, new growth opportunities, and competitive advantages by gathering actionable insights.

Customer feedback, for example, may indicate a demand for the company’s products or services in a different geographic region or among a specific demographic group. Companies can capture new revenue streams and increase growth by expanding into new markets or targeting new customer segments.

3- Enhanced Net Promoter Score

Figure 1. Example of an NPS survey question

Net Promoter Score (NPS) is a customer loyalty metric that assesses the likelihood of customers recommending a company’s products or services to others. Analyzing customer feedback is a useful tool for businesses looking to improve their NPS. Companies can improve the customer experience and achieve higher NPS by identifying areas for improvement, addressing individual customer concerns, and building customer loyalty and advocacy.

Customer vs. User Feedback Analysis

Customer feedback analysis often refers to feedback from customers who have purchased or used a product or service. Feedback about the product or service itself, customer service encounters, packing, and delivery are all possibly included in this feedback. Analyzing customer feedback aims to spot opportunities for a company to enhance its offerings to serve customers better.

Which analytics method is best used for analyzing customer feedback?

1- Qualitative analysis

Qualitative analysis involves categorizing feedback based on themes, topics, etc. Qualitative data is useful for identifying common issues or areas for improvement. Companies usually categorize customer feedback using Natural Language Processing (NLP) tools for effective feedback analysis.

2- Quantitative analysis

A process known as quantitative analysis uses numerical customer data to examine and make inferences from consumer feedback. To gather quantitative data from clients, businesses usually run customer surveys. This methodology uses tools including summary statistics, regression analysis, correlation analysis, and data visualization to reach findings and guide business decisions.

For those interested, here is our article on the steps of survey analytics.

3- Root cause analysis

The goal of root cause analysis is to identify the source of a problem so that it can be addressed and avoided in the future. Here are the steps in root cause analysis:

Figure 2. Essential steps in root cause analysis that can be applied in case of negative reviews

4- Benchmarking

Benchmarking is the process of comparing feedback to industry standards or competitors. This method helps assess how a business stacks up against its competitors and identifies areas where its products or services can be improved.

Here, you can find some benchmarking studies conducted by industry analysts at AIMultiple:

• Sentiment Analysis Services Benchmarking
• Accounts Payable (AP) Automation Tools Benchmarking
• Web Scraping Tools: Data-driven Benchmarking

5- Feedback prioritization

Feedback prioritization involves prioritizing feedback based on its impact on customer satisfaction or business goals. By prioritizing feedback, businesses can focus their resources on the most important issues for their customers and businesses. Companies can prioritize feedback based on the following:

• Customer impact
• Business impact
• Costs

Assume a company receives feedback that its product lacks a key feature its competitors provide. This feedback may be prioritized over other types of feedback by the company because it directly impacts its ability to compete in the marketplace. The company may then devise a strategy to add the missing feature, such as hiring more developers or allocating more resources to product development.

A combination of the aforementioned analysis methods can be used in customer feedback analysis processes to obtain the most accurate results regarding customer thoughts, preferences, and sentiments.

Further Reading

• Customer Feedback Automation
• Online Customer Service Survey: An In-Depth Guide
• Top 5 Sources of Customer Insights

Check out our data-driven list of market research tools.

Here is also our data-driven list of survey participant recruitment services and survey tools for those interested.

Reach us if you have more questions on the customer feedback analysis process:

External Links

• 1. “Future of CX.” (PDF). PwC. Retrieved March 10, 2023.
• 2. “Future of CX.” (PDF). PwC. Retrieved March 10, 2023.