What is a Negative Feedback Loop?

The first step toward improving anything is identifying areas of weakness. Negative feedback loops are a powerful tool for isolating areas of improvement. In this post, we explore what they are and how they can help improve customer satisfaction, employee retention and even personal job performance.

Gathering feedback is an important first step when seeking improvement. No company can positively change the customer experience without knowing where the pain points lie. Similarly, steps to boost employee morale and retention are unlikely to yield results if companies don't first understand what's causing high rates of dissatisfaction and turnover.

Seeking feedback is also essential to personal growth. As Jasmine Escalera, Ph.D., career and confidence coach for Women of Color, writes, "Other people typically have a good handle on what you are great at because they ask you for help often. Ask around and log people's responses so you can identify patterns."

While the need for feedback is simple to understand, using it to identify those patterns and create a strategy for change is more complicated. A negative feedback loop is one approach to turning criticism into action.

Negative Feedback Loop Defined

A negative feedback loop refers to a closed system where a reaction leads to a response opposite to that reaction. The term has scientific origins. The human body uses a negative feedback loop to keep blood sugar levels in check. When levels spike above normal, it releases insulin to bring them back down within the normal range.

In business, a negative feedback loop is when an organization or individual gathers criticism to pinpoint areas that need improvement, and then uses it to implement a plan to create the opposite experience. As a loop, the system continues from there. The company seeks more feedback, finds more areas of concern and makes more improvements.

Negative Feedback Loop Examples

Organizations and individuals can use negative feedback loops in many ways. Here are two examples.

Improving Customer Satisfaction

Company XYZ has no trouble attracting new customers to its brick-and-mortar store, but repeat sales are far below expectations. An online survey of customers reveals many of them experienced long wait times for assistance.

Based on this feedback, Company XYZ hires greeters for its store locations. These individuals greet customers within 30 seconds and gather basic information to pass on to sales associates. They provide regular updates to waiting customers and hand them directly to associates when they become available. Company XYZ continues to collect feedback through surveys to identify additional areas of improvement.

Increasing Employee Retention

Company ABC has high rates of turnover in its customer support call center. It begins with open-ended questions during exit interviews to learn why employees quit. By analyzing data, the company discovers that employees don't feel supported by supervisors.

To address the problem, Company ABC trains supervisors on coaching and motivation. It reworks procedures for escalating customer complaints and develops better reference materials for representatives to use while on the phone. The company uses exit interview data to evaluate the success of this strategy and make additional changes.

Steps of a Negative Feedback Loop

Organizations and individuals can use negative feedback loops in many ways. Here are two examples.

• Solicit feedback through surveys, questionnaires, interviews or social media
• Ask open-ended questions to gain a thorough understanding of issues
• Review criticism and look for trends or patterns
• Identify the top area of concern
• Develop and implement a response plan to mitigate this concern
• Solicit additional feedback and repeat the process

Negative vs. Positive Feedback Loops

Negative feedback loops lead to improvements by identifying things that an organization or individual needs to stop doing or do differently. But what about the things the business does well? This is where positive feedback loops come into play.

Positive feedback loops uncover the biggest strengths of a business or individual. Like negative feedback loops, they begin with gathering information, but with a focus on identifying what an organization does especially well. A company can use the data to determine how to do even more.

For example, a restaurant discovers through surveys that customers really love their French fries. It expands the menu to serve its delicious fries with three new toppings: chili cheese, gravy and truffle oil. Without a positive feedback loop, it might have invested resources into developing new burger options that may not entice its customers.

Final Thoughts on Negative Feedback Loops

Negative feedback loops can effectively drive change, but because they focus on criticism, companies and individuals should use caution when deploying them. Focusing too much on the negative can be demotivating.

Combining positive and negative feedback loops is a more balanced approach. Knowing that they're doing one thing well may make it easier for a person to accept that they need to improve elsewhere.

How a supervisor frames negative feedback also matters. When sharing it with team members, assure them that the company values what they do daily. Explain that the intention is not to call them out or embarrass them and focus on the issues rather than the individuals.

Above all, supervisors should take ownership of how they contributed to the situation. Simply saying, "This was a blind spot for me, too. I'm glad we have a chance to improve now," can be very powerful.

Top Takeaways

• Negative feedback loops involve identifying weaknesses and developing strategies to overcome them.
• Soliciting information, asking questions, reviewing data, identifying areas of concern, developing response plans and implementing plans are the key steps in a negative feedback loop.
• Positive feedback loops involve identifying strengths and developing strategies to reinforce or expand them.
• Feedback loops can benefit initiatives related to product development, customer satisfaction, employee retention and other business goals.

(Reporting by NPD)