What metrics do you use to measure your business performance? If you’re like us, you’ll say something like sales, profit, free cash flow, customer numbers, deal values and so forth. These are traditional measures of success and ones that we’ve been taught to work to all our life. But what if we’re missing the one metric that could actually make the biggest impact to our bottom line?
Walt Disney famously said, “Do what you do so well that they will want to see it again and bring their friends.” How do you do something well? By making the customer happy. This is the metric we've been forgetting about all along.
Yes, the bottom line of every business is directly impacted by customer happiness - so why in the world don’t we actually think about this more? Perhaps because we don’t think it makes that much of an impact. Well, we’re all wrong there. Which is exactly what Justin Dry and Andre Eikmeier thought when they decided to shake things up at VinoMofo, the company they co-founded.
Dry and Eikmeier told StartUpSmart.com.au that that their previous metrics were putting the focus on the wrong type of behaviour and this wasn’t consistent with their company culture or values, so they ran a little experiment. Splitting their team into two halves, one half continued with traditional metrics and the other half started using happiness as a metric.
The results? “Absolutely Insane.”
The happiness-focussed team achieved around 30% better results and sales than the traditional metric focussed team. Pretty astounding after a few short months. But it's important to note that the benefit to the bottom dollar goes well beyond making one sale through making someone happy in the moment.
Happy customers can generally be considered loyal customers and on average, a loyal customer is worth around ten times as much as their first purchase value. So when you secure a customer and you keep them happy, you can expect the investment to pay off in the long run.
Furthermore, it is 6 to 7 times more expensive to acquire a new customer than it is to keep a current one. So you’re essentially saving money and making money by simply investing in customer loyalty.
So how can we take a leaf out of VinoMofo’s book and change our number driven culture to one that actually utilises the power of happiness?
It's quite a significant culture shift for most businesses. However, there are some steps that every business can take to slowly integrate measuring customer happiness into our culture and metrics.
1. Baseline Test - How happy are our customers?
Do you ask for feedback after a transaction? Not a lot of businesses do. It’s quite an easy process and as long as everyone commits to the implementation process, it works well. So start by creating a form (online on your website or in print) and send it to your customers (via email for online surveys and via post for print surveys). If you pay for a CRM, this can usually be automated however if you don’t, ensure a staff member is responsible for finalising deals or orders and chasing up the feedback. If you’re stuck for what to ask, click here for some ideas.
2. Assess the Results - What areas can we work on?
Start to look at the results and if you need some analysis help, turn the qualitative data into quantitative data by giving answers scores from 1 to 10 based on keywords and sentiment. When you see the trends, whatever they are, take note of them and start to think of how you can maintain the already positive and how you can improve on the negative.
3. Create innovative and productive ways to improve those results.
It takes a few small changes by the work team to improve a customer experience. Checking off these positive experiences is a great place to start.
- Easy to navigate and use website
- Fast communication times
- Easy access support channels
- Phone response when required
- Problem resolution and solution time
- Delivering work within deadlines
- Delivering work promised
- Additional or complimentary services
- Positive customer interaction (happy calls, enthusiasm, real conversation)
- Personal approach to customer relationship management
- And with some tailored solutions to the trends you saw based on your unique feedback, the improvements will come naturally.
The most important thing to remember is that every business should constantly be collecting feedback from clients. Client feedback is all we have to guide us with our own business improvement. So keep it running smoothly and revisit it every three months - happy clients and a better bottom line will be knocking at your door!