Build a feedback flywheel

This week's main topic is "feedback flywheels."

What you'll read this week

• How a well-timed cancellation follow-up led to a great insight
• What a feedback flywheel is and how to build it
• Weekly Bootstrapping Update

Enjoy!

This week's insight 👉 Bad news can lead to profound insights

One tactic I recommend is following up with cancellations. Why someone churns is as essential as why they bought in the first place.

When it's done right, boy, it can pay off.

That's the case in today's insight. The author of this post on r/SaaS shared how he hit his first $1000/day. But what stood out was this paragraph.

He achieved that first milestone day by asking a user why they left after they canceled.

It's a powerful technique (more below). And one that can turn bad news into fantastic news.

Build a Customer Feedback Flywheel

The best companies are ones that listen to customers constantly.

They live and breathe customer feedback.

They do customer discovery as a habit.

Are you customer-led?

But for many, getting feedback can feel like a chore, pulling teeth, or is just given lip service. Low response rates, getting ghosted, and no-shows plague those whose job is gathering feedback.

Which leads people to say incorrectly:

• "Sure, we're a product-led org. Of course, we use feedback."
• "We constantly get customer feedback."

But when you go and look. It's sporadic and not systematic. Or often nonexistent.

That's dangerous because, in a crowded market, you must know your target customers' problems better than your competition to succeed.

Today's SaaS markets are crowded. Very rarely are new markets built. Generally, new markets are just a previous market but with some new tech or approach added. (We're seeing that right now with AI.) So, how do you stand out in a crowded market? By out-knowing your competition, your target customers, and their problems.

(From Issue 5 - Never skip talking with future customers)

Feedback Flywheels

Thankfully, there's a way to make getting feedback far less of a chore, repeatable, and systematic.

And that's a feedback flywheel.

A feedback flywheel is a simple concept where you programmatically prompt your customers for feedback.

By building a system to gather feedback, you're constantly seeking feedback but doing it with automation, saving yourself the headache of figuring out who and when to ask.

The feedback flywheel principles are simple:

1. At key touch points with your software
2. Send a brief and topical email to the user
3. Make the feedback request dead simple
4. Automate all of the above

Now, your job is to reply to every response you get.

Key touch points to gain the insights you need

You'll want to target customers when they're most engaged OR when they start disengaging.

Feedback across types will vary, but you don't want only positive feedback. You need the negative stuff just as much.

Why someone churns is as important as why someone bought in the first place.

Here are the five customer touchpoints I like to target the most:

• Upon signup — They're the most hopeful now. Why did they decide to purchase or sign up? What is their hope? This can be valuable feedback for marketing copy.
• Upon their first aha moment — You're likely catching the user at the most engaged they'll ever be. They just experienced the power of this fully armed and operational battle station… oops I meant the full potential of your SaaS. Now is the time to see if they got it.
• Upon new feature usage — Over time, you'll be adding features. Do your customers get it? Do they see the new way to do things? Or did they go meh, or use it and not even notice?
• Upon decreased usage — Monitoring customer usage is critical. When it starts declining, or better, when your analytics suggest it's declining, it is an opportune time to step in. In a larger SaaS, customer success would be pouncing on this. But that's your job if you're a small, founder-run startup.
• Upon cancellation — And finally, no matter what, customers will churn. Knowing why is the key to unlocking growth and maximizing lifetime value. What led to disillusionment? Was something missing? Are they not a fit after all? Any clues are worth their weight in Bitcoin.

What should feedback request emails say?

Thankfully, the ask is straightforward. Just hit these five points:

1. Personalize the email with their name.
2. Make the email topical to what just happened.
3. Keep it brief!
4. And make them feel special by sending it from someone high up in the company.
5. Make it easy to respond.

It's as simple as this:

Hi Susan, I just saw you signed up. Thanks! What are you hoping to achieve with [software name]?

Just hit reply. I respond to every email.

Thanks,

Your name, your title

That's it. Anything longer will surely go to the bit bucket. The same goes for email subjects; be concise and personalize them. "Hey Susan, thanks for signing up"

What about emails when it's a negative moment?

Hi Bill, I just saw your cancellation notice. Thank you for being a customer.

Can you tell me why you canceled? We're always trying to improve, and your feedback is highly valued.

Thanks,

Your name, your title

Cancellation feedback emails usually go un-replied. But like today's insight, it can provide profound feedback.

But suppose Bill has seen your emails asking for feedback in the past. In that case, he's far more likely to respond, especially if he previously replied.

It's the emails, when the founder or head of product has never reached out to a customer before, where the customer goes, "Oh, now you care about me!"

That's why consistent touchpoints are critical and another way the feedback flywheel wins.

What to do when they reply

Once someone replies, thank them, and be honest about the feedback.

Be sure to respond quickly!

If it's good feedback, say so, but don't make promises you can't keep.

If it's confusing feedback, follow up and ask for clarification.

Once they start talking, they'll usually stay engaged.

This is also the perfect time to get on a call with them.

Hearing is 100x better than reading feedback. Plus, you get a better chance for follow-ups.

So reply, thank them, and if it makes sense for you, ask for a follow-up call and send a scheduling link.