6 Reasons Why Customer Feedback Is So Important for Startups

Customer complaining in a shop Adobe

Running a business is a complicated job. You have deadlines to hit, products to deliver, teams to manage and funding to secure. Therefore, with so many things to try and control, it can be easy for entrepreneurs to forget to keep an open dialogue with one of the most critical elements of the process: the customer.

Maintaining a conversation with the clients who are paying for your products or services is the only way to find out if problems are arising, or if improvements need to be made. To help, here are a few things to consider that highlight why customer feedback is such a crucial element of business management, as well as how it can impact the wider success of your company.

What Constitutes Customer Feedback?

Good customer feedback is about giving your clients a chance to communicate honestly about how their experience has been with your company. By its very nature, it will be both positive and negative, but that's a good thing; after all, you need to know what is working, as well as where you can potentially make improvements.

There are many ways to obtain customer feedback, including:

  • Forums
  • Reviews
  • Social Media
  • Surveys
  • Contact Forms

All of these are non-invasive ways to let your customers quickly provide an assessment of how they feel your products or services have worked for them so far. 

In this context, it is also important to understand the difference between customer feedback and market research. Market research is a process that focuses on asking your customers – or potential customers – questions that will lead to new developments. Customer feedback is about obtaining views and opinions after a purchase has already been made, or interaction has taken place. While both are essential tasks for steering your business, they are distinct processes and should be treated as such.

The Importance of Customer Feedback

With that in mind, here are some of the key ways that effective customer feedback can benefit your business.

1. It Improves Your Company's Products and Services

The most crucial plus point of customer feedback is that it is the best way to find out how to improve the products you are making, or the services that you are providing. It is easy for companies to allow their product to stagnate and overlook issues that are affecting real customers. Establishing regular customer feedback practices will ensure that if there is a deficit in the service that you are performing, your team won't miss it.

This is also an excellent method for gathering external opinion on the work that your team is doing. Tight-knit groups can often become echo chambers and, therefore, the best ideas may come from those 'outside the circle'. Sometimes, it can be highly useful to get input from customers to indicate what your business should be doing next.

2. It Demonstrates That You Value Your Customers' Opinions

Receiving and responding to customer feedback lets your clients know that you put stock in what they think and that they are a participant in a shared experience with your company – a key characteristic of modern consumers. Requesting feedback helps customers know that you are receptive to any concerns they have and that there is a pathway for their voice to be heard.

It also helps encourage repeat business and customer retention. Feedback allows you to find out if there is anything about the fulfilment process that needs addressing after a sale is made. You can take excellent care of a customer when you sell them an item, but there may be issues in the delivery of that product which are causing customer dissatisfaction. Requesting feedback allows clients to let you know if there are any issues down the line that need attention.

3. It Helps You Make Better Business Decisions

When you make a big decision for the direction of your business, you need to base that decision on actionable data. Customer feedback is the most reliable source for how your products are currently serving your customers and what you can do to take your company to the next level.

By evaluating what your customers are telling you, you can decide whether you need to focus on promoting your products or developing new ones. You will be able to identify what customers feel are your company's weak points and allocate resources to improve those departments. You can even use customer feedback to make decisions about what regions and markets your company should try to expand into or avoid.

4. If Negative, It Can Be an Opportunity

Nobody likes receiving criticism of their products or services, but it is, nevertheless, a crucial part of the feedback loop. While negative feedback can direct you on how you can improve what your company is offering, it can also be a unique opportunity to repair a relationship with a customer that has been damaged.

If something goes wrong or a customer's expectations are not met, then you will lose that individual's business. However, if you push for feedback, you might have an opportunity to make it right. Maybe there was a misunderstanding of what the service was supposed to provide, for instance. Feedback can open opportunities to cross-sell and offer a separate service to a client that would have otherwise been gone forever.

5. If Positive, It Boosts Morale

While dealing with negative feedback is important, positive feedback can be beneficial for your company as well. Positive feedback lets you know which aspects of your service customers appreciate the most, and lets you know what to highlight for new customers. Marketing and sales need this information to do their jobs, so having a way for them to see these opinions is vital.

It is also useful for your team to know that their efforts are having a positive impact on customers. Employees at startups are accustomed to working hard to support their business, but those long hours can be gruelling. Therefore, it can be a massive boost to know that their efforts are appreciated. Use positive feedback as a way to keep your employees motivated.

6. It Helps Forecast Market Trends

Receiving regular feedback lets you track customer satisfaction over time. If you have a product that is receiving feedback that seems to be trending downward, you can investigate why this is happening. As mentioned earlier, it can help you pinpoint any problems that are occurring internally and resolve them.

It can also help you spot any shifts in the marketplace that are occurring early and take strides to get in front of them. Perhaps a competitor has introduced a new technology or feature that will render your system obsolete or less competitive. If you are collecting feedback, you will have a chance to see if customers suddenly feel that your product is lacking a specific element that may have been introduced elsewhere.


Asking for insight into their thoughts is one of the best ways to ensure that your business is providing the best customer experience that it can. It lets you evaluate the entire journey a customer takes with your company and its services, and reveals if there are any points along the way that can benefit from improvement. It helps establish trust and build the relationships that will undoubtedly make your company a long-term success.

Why else is customer feedback so valuable? Let us know your thoughts and opinions in the comment section below!