When Bain first invented the Net Promoter Score (NPS) measurement system, they introduced Inner and Outer Loops. These loops are used mainly by most Voice of the Customer (VoC) practitioners. They use these definitions of the loops:

  • The Inner Loop responds to individual customers
  • The Outer Loop makes changes that individuals and teams cannot manage on their own

Something that I’ve noticed is that when some VoC vendors shout about ‘Closing the Loop’, they only mean the Inner Loop. Is this because the Inner Loop is easier to manage, so it’s more achievable to close?

However, the Inner Loop, like many business aspects, doesn’t come without issues. Businesses struggle to pinpoint benefits with this system – hence the rise of automation and AI responses. It also leaves customers open to repeated issues, which compromises customer experience and costs. I believe this focus on the Inner Loop exacerbates the malaise we often speak about in CX.

I first explored the VoC when I devised and delivered an Outer Loop project in the early nineties. I am a big fan of the Outer Loop and realise it doesn’t achieve enough. To shift the Inner Loop-focus on ‘Closing the Loop’, I want to introduce the ‘Innovation Loop’. 

The Inner Loop

The inner loop can improve relationships between customers and brands and understand customer intent. To meet these goals, it must:

  • respond in a timely manner.
  • act with empathy.
  • address immediate and underlying customer issues.
  • share lessons and feedback with the Outer Loop (Bain recommends we create Huddles for this communication).
  • align experience and brand / customer promises.

It is best managed by a strong Customer Service team. Where does that leave the Customer Experience team?

For me, customer experience must support the Inner Loop with governance and communication. We have a duty to support our Customer Service colleagues with clear expectations and advocacy.

Example: I dread logging in
Response: provide support, escalate if necessary

I would like to see more in the Inner Loop. I call this the Emergent Loop.

Imagine your Customer Service team facing a rash of similar issues. They need space, communications channels and influence to persuade experience owners to act. Experience owners may learn of issues sooner than waiting for operational data. Furthermore, the data Customer Service provides gives experience owners a lever to implement immediate and long-term fixes.

Example: We normally see five login support queries an hour. We have had 50 since 10:00am
Response: inform operations of a potential issue

The Outer Loop

My definition of the Outer Loop is consciously broader than Bain’s, which could be interpreted as fixing the complex issues of individual customers. Because the Inner Loop retains customers by fixing their specific issues, it supports only the vocal ‘few’. I define the Outer Loop to support the ‘many’ by identifying systemic and re-occurring issues. 

The Outer Loop understands the customer perspective and its impact on the organisation. It uses data from multiple sources to:

  • tell a story
  • build a case for change
  • prioritise issues.

It works alongside products, services and processes. It further helps system owners to identify, implement and validate solutions. So the Outer Loop places greater demands on the CX team, the leadership team and every member of the business. Conversely it is the only way to silo bust and build the relationships we need to develop and implement a CX strategy and design customer experiences that meet the needs of Customers.

To be successful in the Outer Loop we need:

  • governance: setting and monitoring CX goals and supporting all teams to achieve them
  • the skills and tools to build cross-functional relationships
  • the ability to show how CX contributes to business goals and those of other departments.

Example: 1 in 200 login attempts fail and 26% of customers do not retry
Response: redesign login journeys, processes and systems

The Innovation Loop

Let’s consider the fix, improve, transform mantra. The Inner and Outer Loops fix. The Outer Loop also improves. But we need transformation (doing the same thing better) and creation (doing something fresh).

The Innovation Loop takes Voice of the Customer to a higher level. It uses customer feedback to innovate products, services and journeys. It transforms by delivering a smoother journey and creates by translating feedback into needs to add more customer value. The Innovation Loop is adventurous and has the highest potential for creating sustainable growth.

At its simplest, the Innovation Loop brings the Voice of the Customer into product, service and touchpoint design. It minimises expensive post launch fixes and updates by designing our customer experience ‘right first time’. And gives us a high point for further innovation.

Example: Password-based logins are losing customers
Response: integrate our app with device authentication such as fingerprints

At the other end of the scale, the Innovation Loop introduces disruptive ideas. That could be a disruptive offer or the critical 1% change that converts customers into fans. This is the hardest of all loops.

Here’s Jeff Bezos on Customer Centric innovation at Amazon:

“Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf. No customer ever asked Amazon to create the Prime membership program, but it sure turns out they wanted it, and I could give you many such examples.”

Cross-team collaboration is a precondition to closing any feedback loop 

To close any loop, the CX team must influence and work with many different people. People given different priorities by the same leaders. People motivated by different hopes and aspirations to CX professionals. People who design and deliver products, services and touchpoints.

And that’s the beauty of the Voice of the Customer. It’s data driven, not our opinion. It helps us help our colleagues to meet their goals and objectives while meeting our own. For me, closing the feedback loop well is the best way to foster collaboration in CX.

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