Customer Happiness: Why It Matters And How To Measure It
How happy are your customers? Do you know how contented they are with your products, services and support?
So, what is customer happiness and why is it so important?
In this blog piece we will go on to explore this, as well as ways to measure and improve customer happiness. But before we do anything else we need to define exactly what customer happiness is.
Why is customer happiness important?
Having briefly touched on the value of customer happiness, it can help to explore this in a bit more detail.
Here are some reasons why customer happiness matters:
Your customer and brand loyalty improves
Generally, happy customers tend to come back to companies they love and support. And the happier they are the more loyal they’re likely to be in terms of choosing your brand over your competitors.
Customers that are happy with your brand are more likely to recommend your company to friends and family. They’re more likely to leave a positive review and share good things about their experiences with you on social media too, which all helps to make you more successful moving forward.
You can cut customer churn
Customer churn is never a good and can seriously harm your revenue if left unchecked.
While it’s difficult to keep every customer completely happy with your products and services all of the time, it’s important to keep any customers from choosing to leave to an absolute minimum.
Customer churn can occur for a number of reasons.
- You have some of the wrong types of customer
- Your customers aren’t satisfied with your products
- Your competitors are performing better than you
- Your customers no longer see great value in your products
- A poor customer experience is putting off customers
By reviewing and identifying key areas of your business and where you need to make improvements, you can make the adjustments needed to ensure your customers are satisfied.
It helps you to beat your competitors
When your customers are really happy, they’re more likely to choose your products and services over your competitors too.
Consider the café that goes above and beyond to deliver the service that keeps their customers returning and even bringing new customers with them.
Well, if you’re delivering the service and experiences that make your customers happy, it’s likely they’ll keep returning and helping to keep you one step ahead of your competitors too.
It can improve your customer lifetime value
When you invest in customer happiness, your Customer Lifetime Value (CLV ), which is a figure that forecasts the projected revenue that a customer will generate during their lifetime with you, will increase. According to research, a completely satisfied customer can generate 2.6 times as much income than a somewhat satisfied customer and up to 14 times as much revenue as an unhappy customer.
How to measure customer happiness
Having read the many compelling reasons for why customer happiness matters and taken the decision to try and improve levels of contentment among your own customer base, you’ll want to know what customer happiness metrics are available for you to measure and improve it.
Customer satisfaction surveys
One of the best ways to measure how happy your customers are is to ask them directly through a customer happiness survey. This will give you a good idea about how they feel doing business with you. And one of the most effective survey questions for this is the CSAT metric question.
The aim of CSAT is to measure a customer’s satisfaction with a product, service or support interaction using the following question.
‘How satisfied were you with our (product, service, support interaction)?
Each respondent is then invited to rate their experience, selecting this from a 5-point scale ranging from very dissatisfied to very satisfied.
CSAT is then calculated by dividing all the positive responses you receive by the total number of responses and then multiplying this figure by 100, to give you a CSAT percentage.
Scores closest to 100% will indicate the highest levels of satisfaction, with those at the other end of the scale the lowest levels of satisfaction.
If you’re pushed for time and would like a simpler and faster way of calculating this, then you might like to try our CSAT calculator.
Net Promoter Score® (NPS)
Calculating your NPS score can also provide a good indicator of how happy your customers are, in terms of their loyalty levels and willingness to recommend you to others.
You can measure your NPS, by asking your customers the following question.
‘On a scale of 0 – 10, how likely would you be to recommend our company to a friend or a colleague? (on a scale where 0 represents not likely and 10 very likely)
The scores are then grouped into the following classifications.
- 9-10 – Promoters (which represents clients who love your company and actively promote it)
- 7-8 – Passives (customers who like your company but don’t love it yet)
- 0-6 – Detractors (clients who are unhappy with your business and are at real risk of churning)
Your NPS score can then be calculated by subtracting your number of detractors from your number of promoters. This should leave you with a positive or negative number, which you will need to divide by your total number of survey responses and then multiply by 100. You’ll then be left with a number between 100 and –100, on the basis that the higher your score the more desirable it will be.
A simple and faster way of calculating this is also available by trying our NPS calculator.
Social media sentiment analysis
Finally, social media platforms can also provide another option for gauging levels of happiness among your customer base.
Compared to other mediums your customers use to communicate with you, the more informal nature of social media platforms, means you’re likely to see customer thoughts and feelings being discussed, that you may not otherwise be aware of.
By monitoring and listening to what people are saying about your company and your products, it can help you to make the necessary changes you need to keep your customers happy.
How to improve customer happiness
While it’s crucial to keep track of customer contentment levels with customer happiness metrics, you should always be analysing key parts of your customers’ journey too. This way you’ll quickly be able to see any areas you need to improve.
However, some key ways to improve customer happiness is through…
Great customer service
There are many benefits to having a strong customer service and one of the biggest is happy customers.
Considering that 89% of consumers are more likely to make another purchase after a positive customer service experience and 68% willing to pay more for products and services from a brand whose reputation is built on strong customer service, the ability to consistently deliver a great customer service is paramount.
Providing a strong product or service
No one wants to pay for poor quality products or services, which can impact your brand and reputation.
So, if your customers are complaining about what you’re offering, you need to be putting in the time to sort this out.
But this will pay dividends if you can, as those customers who are consistently happy with what they buy from you, are more likely to be happy with your brand and stay loyal to you.
Personalising your customers’ shopping experiences
The more you can personalise your customers’ shopping experience the better.
In fact, studies reveal that one in five customers feel more loyalty towards brands that personalise their experiences.
Sending customised emails, discounts and incentives all help to create a great shopping experience for your customers. And they help strengthen your relationship with them too, helping to increase customer loyalty and happiness.
Always being honest and transparent
When it comes to your customers, you should never lie or try to hide anything from them. Hidden fees or conditions of service in particular can cause problems and usually results in a negative experience for the customer.
Similarly, if you or one of your employees makes a mistake, always deal with it right away. Be honest and transparent about the issue, and how you plan to resolve it.
Honesty about any mistakes you make displays customer care and a willingness to resolve any issues in the unlikelihood that they should arise.
If you can do this, your customers are more likely to be understanding and you should be able to convert them back into happy customers more quickly.
Why it pays to keep customers happy
From customer retention and attraction to customer loyalty and recurring revenue. Given just how much your customers’ happiness affects all aspects of your business, it literally pays to keep them as satisfied and contented as you can. And if you can monitor the essential areas of your business and regularly collect your customers feedback with customer surveys, you should have all the insights you need, to make any necessary improvements and keep your customers happy.