The Power of Feedback Loops

Feedback loops are essential to our development and success. They are the basic mechanic for how we learn and grow as human beings. As we progress through our everyday lives, we constantly use feedback loops to guide us; making observations, corrections, and taking actions based on feedback from an array of different sources. Evolution itself is fundamentally based on the process of feedback; survival of the fittest by adapting to feedback from our environment. Feedback loops are therefore part of our biological make up…they’re in our DNA.

Today, technology is providing us with even more opportunities for feedback. On a personal level, we wear trackers to gain feedback on our health and fitness; we have apps on our mobiles to understand and optimise our productivity; and with developments in the Internet of Things and Artificial Intelligence, the world around us responds to the feedback we’re providing through our actions and behaviour. For organisations, technology is being used to gain feedback on customer interactions and satisfaction; team engagement; and the performance of products in real-time. All of these generate a deluge of data and potential insights that with increasingly sophisticated analysis techniques we’re now leveraging to adapt, correct, and improve ourselves, and our worlds.

Yet the vast majority of this is all happening unconsciously, built into our habits and behaviours. Being aware of feedback loops and actively looking to design, create, and use them can propel our activities to new levels. Understanding where we are, how we’re progressing, and where we can improve is a process that, when harnessed, can dramatically improve our performance and accelerate our success. Feedback loops are a key discipline used by high performers everywhere, from athletes to entrepreneurs, politicians to CEOs. Understanding and using feedback loops is a principle technique that stands these performers out – yet, these are practices that we can all adopt.

What are feedback loops and how do they work?

Back in the 1960s, Stanford University psychologist Albert Bandura pioneered the study of behaviour change and motivation, including the potential of feedback loops to affect behaviour. Through his experiments, Bandura observed that individuals with a clear goal and a means to evaluate their progress toward that goal greatly increased the likelihood that they would achieve it. He further expanded this thinking into the concept of self-efficacy, where the more we believe we can meet a goal, the more likely we will do so.

Feedback loops allow us to evaluate progress towards our goals, and course correct accordingly to meet them. We can use them to drive ourselves, our teams, our companies, or our products. They can also be used to drive behaviour in broader populations en masse; for example traffic speed indicator signs (rather than speed cameras) have been proven to reduce speeds by over 10% in populated areas due to the feedback that they give motorists.

A feedback loop is made up of a series of stages that work together as a continuous cycle:

i. Design and plan
All feedback loops have to start with a design or plan in the first place. This is our reference point, the basis upon which we’re aiming to make improvements. That plan should specify the methods and metrics that you’re going to use to monitor delivery and performance, which in-turn form the feedback that you’ll use to refine and hone the plan moving forward. In this respect, plans aren’t one-off exercises but rather ongoing iterative cycles.

ii. Collect data
As our design or plan is implemented we start to collect data. Data is generated as we quantify the behaviour of ourselves, customers, teams, or things – whatever it is that we’re looking to develop and enhance. You can’t change what you can’t measure.

It’s important to understand what it is that we’re measuring though. As The Lean Startup author Eric Ries explains, “Unfortunately, the majority of data available in off-the-shelf analytics packages are what I call vanity metrics. They might make you feel good, but they don’t offer clear guidance for what to do.” The data that we collect should reflect the drivers of behaviour. They should be things that you can not only observe, but also lead to specific actions that you can subsequently take.

iii. Analyze
Once you’ve collected the data, you need to analyse it to turn it into meaningful insights upon which you can base decisions. Analysis is looking for patterns in the data that suggest causality: if these events happen, then we can expect this to be the consequence or result.

iv. Communicate and discuss
This is a stage that’s often missed. Sharing your results and discussing their implications not only improves the efficacy of your decision making process, but it also leverages the feedback to bring others with you in the achievement of your goals. This is just as relevant for self-improvement as it is with a broader team, product, or business. Discussing and collaborating with others is essentially another form of feedback, yet when we base it on measurable insights, that feedback is grounded on a reality.

v. Course correct
Once we’ve shared and discussed the feedback we can make decisions based on its insights for how to improve our initial design or plan. These decisions aren’t definitive answers, but the next stage in our experimentation and iteration to evolve our plan over time. In this respect, the decisions course correct our plan, providing the loop to take us back to the start of the process…

…and then we go round again.

Feedback loops work because they harness our emotional drivers as part of the cognitive decision-making process. They do this in three key respects:

i. They provide evidence
The process of collecting and analysing data provides us with empirical evidence to support our decisions. Evidence imbues assurance and trust in the outcome; that we’re educated and informed to be able to make more effective decisions and take action.

ii. They create relevance
The fact that the feedback loop is geared to specific goals and grounded in the plan / design, means that it has relevance. In this respect, it turns rational information into an emotional imperative – we must act on the feedback to meet our goals.

iii. They highlight consequences
The essence of feedback is that it shows that things are either happening or not happening. In this respect, you know that there will be consequences to your actions. Feedback gives you the opportunity to act on the information knowing that things will be different as a result.

Key Feedback Loops

Feedback loops can be applicable in many disciplines and scenarios. Here are some of the key examples for marketers and entrepreneurs:

i. Feedback Loops for Productivity
Personal or team productivity can be significantly enhanced through the adoption of feedback loops. There are many factors that we can measure and use to drive changes in our habits and behaviour in order to increase the efficiency of how we organize our daily lives and enhance our outputs:

All of these can be recorded, assessed, and course corrected so we can be more effective.

ii. Feedback Loops for Product Development
Throughout the development process we can introduce feedback loops to guide the design, roll-out, and optimisation of products and services. These can range from concept tests, alpha / beta programs, usability testing, regression testing, A/B testing, and so forth. Getting feedback as you introduce new designs or features enables you to iterate and improve your solutions on an ongoing basis.

iii. Feedback Loops for Customer Experience
As we service, interact, and engage with customers there are a multitude of opportunities to gain and use feedback so we can not only enhance our core offering, but also build the overall customer experience. This is fundamental – according to a study by Monetate, 73% of customers will buy from a company again if the experience is good, compared to 89% who would switch to a competitor if the experience wasn’t satisfactory. In any customer relationship there are an array of touch points where we can gain feedback: welcome or first purchase emails, subscriber newsletters, retail checkouts, helplines or help desks, etc. In a lot of cases we already have customer contact information and their permission to talk to them – we just have to reach out. A more formalised approach to creating a customer feedback loop is Net Promoter Score, or NPS, a methodology developed by the business strategist Fred Reichheld and adopted by companies including Apple, GE, American Express, and Phillips. The Net Promoter Score is calculated based on customer responses to a single question: “How likely is it that you would recommend our company / product / service to a friend or colleague?” The scoring for this answer is based on a 0 to 10 scale; those who respond with a score of 9 or 10 are called ‘Promoters’ and are considered to exhibit value creating behaviours such as buying more, remaining customers for longer, and making positive referrals. Those who respond with a score of 0 to 6, on the other hand, are labelled ‘Detractors’, and are believed to be less likely to show value-creating behaviours. 7s and 8s are ‘Passives’, with their behaviour falling in the middle between Detractors and Promoters. The NPS is calculated by subtracting the percentage of customers who are Detractors from the percentage of Promoters. Tracking NPS and diving in to understand feedback from both Promoters and Detractors is a well-used approach to improving the customer experience based on feedback.

iv. Feedback Loops for Marketing
Feedback loops in marketing are essential. Audiences move very quick, and it’s therefore imperative that we build feedback into our processes to ensure we stay relevant. Feedback for our value propositions, messaging, channels to market, ad creative, media placements, communications, content, social engagement, etc. are all means by which we can generate more impact, awareness, education, conversion, retention, and advocacy through our marketing activities. Increasingly, this feedback is being gained and used ongoing through technology. In many areas of the marketing mix automated tools and processes, such as programmatic media buying for example, are taking always-on feedback and applying it to actions and tactics in real-time. Although these have increased performance, we need to be conscious of how these feedback loops are working and what they are showing us.

v. Feedback Loops for Self-Improvement
Finally, feedback loops should play a central role in our own self-improvement. As we look to develop our skills, expertise, and knowledge, knowing where we’re starting and how we’re progressing along these paths is critical. Feedback can come in numerous guises: self-evaluation, peer group discussions, tests or exams, mentors, etc. It’s important that as we look to advance, we’re consciously building feedback loops into our methods and systems for learning and improvement.

Enhancing Feedback Loops

So, feedback loops can play a key role in driving overall performance for individuals, teams, companies, products / services, and brands. Start with your initial plan / design and determine your feedback goals, and then define the key measures that you’ll use to gain insights. As you construct your feedback loops, consider how you can enhance them:

i. Speed
Gaining feedback quickly is crucial to the effectiveness of feedback loops. The longer it takes for feedback to arrive, the less relevance it will have to influence future decisions. Find ways to tighten the feedback loop and present effects as soon as possible, either with real-life measurement and observations, or simulated results if needed.

ii. Measurability
Exactly what you’re measuring to gain feedback is fundamental. As highlighted above, beware of vanity metrics and focus on performance indicators that drive behaviour and lead to actions. Make sure your measurements represent reality, rather than abstract, vague, or unquantifiable feedback.

iii. Context
Feedback gathered or presented without the context of a larger goal isn’t as effective. Providing context for the feedback not only creates a signpost by which to measure progress, but actually frames the way people think about a problem. Be clear on your desired goals and how the feedback relates to their achievement.

iv. Motivation
Feedback only works if you care about the results. Whatever goal it is that you’re looking to achieve, understanding and leveraging the underlying motivation behind it will serve to connect the feedback with the ultimate outcome. Ensure that the goals are therefore meaningful – understand the ‘why?’.

Proactively defining, creating, and using feedback loops can play a significant role in improving performance. As a feedback loop for me it would therefore be great to know how you’re using them, what success you’ve had, and how you’ve improved their effectiveness?