What Is A Feedback Loop in Business & How to Set It Up

There’s data everywhere that can be used to improve your business – from both customers and employees. Whether you gather it from surveys or online, getting to understand your customers’ and employees’ opinions and feelings can have a huge impact on your business.

And this may sound daunting, but digging into negative feedback is often the most helpful.

What Is a Feedback Loop?

A feedback loop is a process that “loops” the outputs of a system back in as inputs. In business use, this means using customer or employee feedback to improve the quality of a product, service, or workplace: a business “inputs” the “output” feedback to initiate change.

Customer feedback from surveys, social media posts, online reviews, and more; and employee surveys or other internal employee data, can be hugely helpful to understand what changes businesses can implement to make their customers and employees more content.

SaaS companies use feedback loops to locate bugs and find out if software is meeting their customers’ standards. Oftentimes, changes can be implemented right away to fix any problems and keep the customer from leaving the company or ending their service.

All manner of companies use a customer feedback loop to analyze the customer experience (CX) and follow the entire customer journey from start to finish. This allows them to understand and act on customer pain points wherever they may occur to improve products and services and respond to customer problems in real time.

Feedback loops also work on marketing and branding – perform brand monitoring and follow marketing campaigns on social media and all over the web to find out how your customers are reacting to your message. Customer analysis tools allow you to analyze feelings and opinions automatically and constantly, so you can “close the loop” by inputting the data back into your feedback loop – with real-time, data-driven decisions.

In the contemporary business environment, we’re generally talking about two different feedback systems: positive feedback loops and negative feedback loops.

Positive and Negative Feedback Loops

A positive feedback loop in business is when a company uses employee complaints and criticisms to improve the work environment, company operations, or internal functions and processes. This can include formal interviews – onboarding or exit interviews – or surveys with multiple choice and/or open-ended questions. Or it can be informal, allowing employees to offer regular complaints or post/write them anonymously.

When it comes to discovering information that can make real, positive changes for a workplace or business functions, it should be noted that, however uncomfortable to hear, criticisms and grievances usually offer the most useful insights. It’s important to send regular surveys to customers or let your employees know that feedback is always welcome and make it clear there will never be any retribution for offering negative input.

The positive feedback loop is closed when employee complaints are addressed and change enacted. And, as a result, you’ll see an increase in employee well-being, employee retention, improved processes, and ultimately, increased profits.

A negative feedback loop in business focuses on customer complaints. It uses customer feedback from surveys, social media, emails, chatbots, and more, to implement changes and improve products and services – ultimately benefiting the customer and the business.

In fact, a recent survey of leading product managers says that over 50% of their new products and features are motivated by customer feedback. No one knows your product or service better than your customers, so it’s important you listen to what they’re saying and close the loop by letting them know that you’ve implemented changes or have at least considered their complaints.

Negative feedback loops help build products and services directly to the needs of your target audience to improve the overall customer experience and increase customer retention.

Customer service, for example, is extremely important to customers, with 32% of consumers saying they would leave a company after just one bad experience. When you use automatic analysis techniques (see below), you can follow regular customer service complaints in real time to implement changes right away.

A negative feedback loop benefits businesses because customers feel appreciated and are more likely to champion your products and services for years to come. And decreased customer churn, of course, greatly helps your bottom line.

Customer feedback can come from internal CRM system data, surveys, social media comments, online reviews, and more. It’s all useful data! Read on to learn how to create a feedback loop.

Feedback Loop Process

  1. Gather feedback – from customers or employees
  2. Analyze your feedback – machine learning tools work in real time for immediate results
  3. Act on it – apply your results and close the loop


Gather feedback

You can send regular employee and customer satisfaction surveys or NPS surveys. Online survey tools, like SurveyMonkey and Typeform are easy to set up, customize, and implement – in emails, on your platform, or in-store.

Data from emails, chatbots, and CRM systems can also be useful, and you already have it right at your fingertips.

Monitoring employer review sites, like Glassdoor, can be helpful to find anonymous employee evaluations of your company, or simply let your employees know that all feedback is welcome.

As for customer feedback, social media listening allows you to find customer comments about your brand from Twitter, Facebook, YouTube, and all over the web.

Analyze your feedback

When you’re working with open-ended responses, this is known as unstructured data or qualitative data. Unstructured data is harder to analyze because it can’t simply be formatted as numbers and percentages, but it offers much more valuable insights.

It used to be, you’d have to analyze all that data by hand – a tedious and time-consuming process that oftentimes wouldn’t even produce consistently accurate results. Fortunately, recent advances in natural language processing (NLP) allow you to automatically structure and analyze unstructured text data.

MonkeyLearn is a SaaS solution, offering a suite of powerful text analysis tools, so you can set up your feedback loop and have it run automatically, in real time.

Techniques, like sentiment analysis, can automatically analyze surveys, reviews, or social media comments for opinion polarity to get to the feelings and opinions of your customers or employees

From Twitter, for example:

Tweet: "@AppleTV is a great example of terrible User Experience. And I'm not talking about the lack of content."

This pre-trained sentiment analyzer automatically outputs this comment as Negative:

Sentiment analyzer classifying the tweet above as "Negative."

Couple sentiment analysis with topic analysis and you have aspect-based sentiment analysis for even more fine-grained results. You can first classify feedback by topic or “aspect,” for example, Reliability, Usability, Features, then sentiment analyze it. This allows you to understand which aspects of your business are particularly positive and which are negative.


With MonkeyLearn you can custom-train these text analysis tools (and many more) to the language and criteria of your business. Text analysis with machine learning saves huge amounts of time and money, and once it’s set up to your needs, you never have to worry about accuracy.

Act on it

Put your results into practice and close the loop. Use your results to improve products and services. Using aspect-based sentiment analysis, for example, if you’re constantly finding Negative comments on social media about your Pricing, it’s possibly something you should consider changing.

Similarly, if employees love the cafeteria food offerings but simply find them too expensive, that’s an easy change, presuming it’s not an active money-making part of your business.

The final step in the feedback loop is notifying your customers or employees that you’ve implemented changes or have at least heard their gripes. This can often be the most important part of the process because, even if you don’t implement changes, it’s simply human nature to want our voices heard. Otherwise, customers and employees may just feel like they’re interacting with a blank, stone monolith.

Wrap Up

It’s clear that both negative and positive feedback loops are essential to keeping your customers and employees happy. Whether you gather data from surveys, internal systems, or on the web, you can analyze it for real-world insights and real-time decisions.

MonkeyLearn’s suite of text analysis tools, like sentiment analysis, topic analysis, keyword extraction, intent detection, and more, can be customized to automatically analyze your data for immediately actionable insights.

Take a look at what MonkeyLearn has to offer or sign up for a demo to find out how to get the most from your customer and employee data.

Tobias Geisler Mesevage

January 13th, 2021