Feedback.

What you’ll learn.

• Understand the importance of customer feedback and how to use it properly.

• How to think like a customer: introduction to empathy.

• Research, feedback, experiment & measure the impacts of your ventures.

Outline for today’s, tomorrow’s and after-tomorrow’s lessons:

Review.

Business risks can be calculated.

You can decide whether you want to take a risk or play it safe based on what you learn about the situation.

❶What is the competition?

❷What is the demand?

❸What are the costs?

❹What is the ROI?

ROIReturn On Investment = profit - costs.

What is diversification?

Be careful with your diversification strategies.

Keep your business focused within your niche.

Your niche.• An area or range of activities

that you understand.

• Customers and service or product that you know well.

• You can create multiple streams of income by trying different things, all of which could be something that you know very well and know how to do. And which are related and complement each other.

Experiments.• Try your ideas on small scale

before going big.

• Learn from those test runs whether it is a good idea.

• Not the same as market research, your own opinion or prediction about what would happen. Experiments are actually you conducting the business on a small scale.

How would you experiment with the following business ideas?

• A large investment into fishing business.

• Building a restaurant.

• Creating an e-commerce website.

• Opening a car repair shop.

• Owning a delivery and logistics service.

How can you tell if your business is doing well?Imagine you have created 3 business experiments as side-

projects, which one is failing and needs to be stopped?

Is this restaurant doing well?Can you tell for sure?

What if that restaurant’s balance sheet says:

• This March we earned $15,000.

• We spent $5,000 on ingredients for food.

• We spent $10,000 on wages for staff.

• We spent $7,000 on bills and maintenance.

• Total earnings: -$7,000

Looks can be deceiving.

Turned out that the restaurant looked busy because their prices were very low — and not enough to cover the costs.

How can you tell for sure?

Measure. Keep a record of all your earnings and losses.

Things you can measure:

• Income.

• Costs.

• Amount of work required.

Measure & track.Track = measure every day, every week etc.

How well each one of your businesses are doing?

Restaurant

Bar

Bakery

Total: $300

Measure everything individually.

Restaurant

Bar

Bakery

Total: $300

$-50

$250

$100

Today’s topic: feedback.

Feedback is a gift.

• Ask your customers for honest, truthful feedback - they usually will not give it to you otherwise.

• Your customers do not owe you feedback, but if they give it to you - thank them.

• Accept their feedback for what it is - you want to know exactly how your customers felt (good or bad).

Do not take it personally.

Your angry customers’ feedback is just as valuable as your happy ones’ - perhaps even more so.

You do not have to please everyone.

Some feedback might be useful, others not so much. Make yourself aware of what the customers are saying and thinking and proceed with your own

decisions based on that information.

Collect & synthesize.

• Collect a good sample of feedback (at least 10 people).

• Sort your feedback based on opinions and suggestions.

• Think how it could apply to your business.

Applying feedback.Evaluate each customer complaint, praise or suggesting:

• Is it feasible to make the changes?

• Does it align with your business objectives?

• Learn about your business from the customers’ perspective.

Feedback types.

• Complaint: “I didn’t like ___.”

• Praise: “I liked ___.”

• Feature request: “I wish ___.”

What kind of feedback does this review give. What types of feedback are they?

There are at least 2 feedback items in this review.

Public feedback.• Public feedback (reviews)

tends to affect businesses on a larger scale than private feedback as a lot of potential customers get to see it and make a decision before purchase.

• Public feedback isn’t new, but it is now applicable to a lot more small businesses.

• Public feedback is bound to consist of negative reviews from time to time.

Issues with public feedback.• Fake positive reviews from friends

or fake accounts. Customers can often see right through it and business could be banned or sued as a result.

• Libel and spam. Websites that host reviews have to be notified and should be dealing with those issues to maintain the quality and trustworthiness of their business.

• Inappropriate or ineffective replies from business owners to negative feedback. This is something that you can control.

Replying to online reviews.• You don’t have to. Remember, it’s a gift - just accept it.

• If the unhappy customer was clearly wrong in their review, you can correct them for the sake of other readers but don’t be rude. If they had a bad time it is a good manner to apologize.

• If you got a negative review and you have fixed the problem soon after, you can reply letting them know that you have righted the wrong.

• You can offer discounts or small gifts/deals to your customers who left unhappy. It might not cost you much but they will often be very appreciative. Plus, since it’s a public form you are letting other potential customers know that you are a delight even in a difficult situation.

How would you reply instead?

Assignment.❶Go on TripAdvisor and find a

business with 3 or 4-star rating and at least 10 reviews.

❷Group similar feedback together (by topic).

❸Assign the “feedback type” labels to each of the above groups.

❹Decide and explain why each feedback group should or should not be implemented in your business.