How Startups Can Use Feedback Effectively

Feedback is one of the greatest tools an entrepreneur can use to grow a successful startup – yet, every few months, it seems like a story surfaces of an entrepreneur who didn’t take feedback very well.

Usually, a business owner responds in a rage against a customer’s one-star review, then other customers push back, and there is a viral social meltdown.

For example, last year, a restaurant manager in Virginia went too far in trying to make things right with a dissatisfied customer. After seeing a poor online review of their restaurant, the manager remade the meal and decided to deliver it, without the unhappy customer’s knowledge.

As you might imagine, this backfired, and the customer was shocked and horrified to find that the manager had looked up her address, showed up unannounced, and called her number several times saying he was standing outside her door.

Receiving feedback, especially negative, can be a very delicate process and you need to prepare yourself for the reality that not every customer experience will be a positive one. However, by swallowing your pride and accepting that there is room for improvement, feedback can change your startup for the better.

This guide will help you use feedback effectively to grow your startup while avoiding going viral for all the wrong reasons.

Why is Collecting Feedback Important?

When I first started freelance writing, I was terrified of feedback. I would spend hours researching and writing articles hoping to never see them again after they were delivered. I never wanted feedback because I feared shedding light on any issues would make me look unconfident.

Eventually, I decided to ask for feedback from a client with whom I had a good relationship. They responded by telling me that I was one of their favorite contractors. This eventually led to me renegotiating my rates and taking on more assignments with the client – which might never have happened if I didn’t ask for feedback.

Feedback is essential for growth – personally, professionally, and within relationships. In our increasingly competitive world, even the most stable types of businesses must be willing to prioritize feedback if they want to survive.

Feedback gives your company the power to adapt. Many startups fail in the first few years, but those who succeed must continue fighting. From 1955 to 2014, only 12% of companies remained listed on the Fortune 500. The remaining 88% of companies either went bankrupt, fell out of the top list, or were bought.

While this is an extensive dataset, the average life expectancy on the Fortune 500 is continuing to shrink, with most companies failing to last more than 15 years on the list.

Even today’s powerhouse companies must be willing to analyze and adapt their strategies less they risk suffering the same fate as other “unsinkable giants” like RIM and Sears.

Who Should You Collect Feedback From?

Every startup is unique, which means your clients, customers, and employees all see your business differently and compare it to other brands with which they interact. By understanding where feedback comes from and the value of the source, you can optimize the channel effectively.  

Below are some of the most common feedback sources for startups.

  • New customers: Learn how they found your brand, why they chose to buy from you, what competitors they have engaged with, and what they thought of the overall customer experience.
  • Loyal customers: Seek out these customers to identify your strengths, find weaknesses to improve upon, and formulate new ideas for growth and customer loyalty. This customer base is easier to receive feedback from because they already like your brand. By asking for feedback, you are illustrating your commitment to keeping them happy and satisfied – which will improve the relationship further.  
  • Lost customers: Customers who leave your business are just as valuable as the loyal clients who love your brand. In the same way that you provide exit interviews for employees, ask customers to provide honest surveys about why they are leaving, so you can see where your weaknesses are and how you are losing business to others in the market.
  • Employees: Your staff can provide insight into multiple parts of your startup. They can share how effective they think the products and sales processes are while also providing feedback on your management style and the organization of the company.
  • Third-party sources: Many startups turn to focus groups and other objective sources for ideas on branding, product usage, and new markets. It is easy to collect feedback through specific survey agencies that specialize in reviewing your brand.

As you can see, there is no shortage of sources for collecting and reviewing feedback related to your startup. It’s up to you to determine where you want the feedback to come from and how you plan to use it.

How Can You Effectively Collect Feedback?

There are dozens of options available for you to collect feedback depending on your brand size and goals. You can always hire a survey company to collect and manage insights, but the reality is – most startups are bootstrapping and cannot afford to invest money into feedback.

Fortunately, money-conscious startups can easily collect feedback for free, or for a minimal cost. A few options available to you include:

  • Online surveys sent through email: These can include Qualtrics, SurveyMonkey, or simple surveys created using Google Forms.
  • Point-of-sale surveys on receipts or through employees: Some companies position employees with tablets at the exit to collect customer data.
  • Open-ended questions asked of customers or employees: This feedback option is ideal for companies looking to collect qualitative data and in-depth insights.
  • Performance reviews or employees exit interviews: Internally, startups can use employee feedback to improve operations or product performance.
  • Anonymous feedback forms: Submitted either on paper or digitally, this gives people a safe space to share their ideas.  
  • Social media channels and public review forums: If you can handle public criticism online, then social media is a great space for tracking the feelings of your customers.
  • Focus groups and professional interviews: You can gather small groups of customers together and provide incentives for them to share their thoughts and ideas.      

Software solutions have made feedback collection easier than ever. It’s just a matter of companies tapping into their resources to help people make their voices heard.

How Can You Turn Feedback into Growth?

Most CEOs and managers think feedback is incredibly valuable and desirable to collect. However, these same CEOs, founders, managers, and even employees will also say that they don’t have enough time to review the feedback that they have, or at least aren’t turning the advice into action items.

Erik Bergman created the affiliate marketing startup, Great. When asked about his approach to using feedback, he stated that “the ability to recognize and accept one’s mistakes and faults is a powerful skill underutilized by today’s entrepreneurs. I learned early on that professional and personal development hinges on my ability to not just hear feedback, but to make active changes in my life and workflow to address those issues head-on.”

The feedback you collect is only as valuable as what you do with it. Unfortunately, few businesses use the feedback they collect. In fact, businesses waste between 60 to 73% of all data that they collect according to a recent study.

The same can be said for your customer surveys, employee interviews, and other feedback sources. If you’re not using the information, you’re wasting valuable resources and missing out on an opportunity to improve your inefficiencies. Feedback needs to come with action items and benchmarks so you can see how your solutions turn into an improved customer and employee experience.

Look at your feedback from the past three months, six months, or year. How have those insights turned into improvements? To what level are customers better off? If you can’t answer these questions, then you’re not using your feedback effectively.

Emphasize Feedback to Grow Your Startup

Feedback is a powerful tool for any startup – and for the most part, it’s free. It costs you nothing to ask employees their opinions about managers or check in with a client to see how you can improve.

When done well, feedback shows that you care and provides growth and developmental opportunities. What you invest in feedback collection and implementation is what you will sow.


Derek Miller
Derek Miller, MBA is a digital marketing expert with a background in content marketing, SEO, PPC, email and social media marketing. He specializes in small to medium business growth and has worked for a number of different startups.


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