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How To Make Happy Customers
There is a difference between what makes customers happy and what happy customers do.
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When you think about your happiest customers, it’s tempting to want to make everyone happy just like them. Who wouldn’t want all customers to be extremely happy? As a result, it’s a common exercise to analyze exactly what your happiest customers do in your product, and then encourage all users to do those same things.
For example, if happy customers tend to add a lot of users in the first few days you might update your product to encourage them to add more users quickly. You might send a bunch of emails to ask them to add more users. You might nag them to add more users every time they log in. In general, you might focus everything on getting them to add users quickly to make sure they are as happy as possible.
But, wait, are we sure that those actions made them happy? Or are happy customers more likely to take those actions because they are already happy? Can you tell the difference?
If you are like most companies, you cannot tell the difference.
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To be fair, it’s a hard problem. People joke about the confusion between correlation and causality, as things can happen at the same time (correlation) but not be related in any way (causality) but you can’t tell the difference from the data. There is even a great website that shows you charts of hilariously unrelated things that are highly correlated. Here’s a great example:
Source: Spurious Correlations
Even though it’s hard, it’s absolutely critical that you understand what drives happiness in your customers! That basic understanding is key to every aspect of your future product strategy, as you want to use those drivers of happiness to accelerate your business.
So, how do you tell the difference?
Talk to your customers. While correlation is hard to separate from causality in data, it’s easy to do in a conversation. Modern organizations excel in quantitative decision making, but this is a case where you need qualitative input to make a decision. If you ask someone why they are happy it’s much better than guessing.
Segment your customers. One of the easiest ways to confuse happiness is to assume it’s related to one customer characteristic when it’s really related to another. If you segment your customers you can group together everyone with similar characteristics and in doing so control the potential drivers of happiness. If you look only at customers in California that have been with you for a year and have over 20 users, you know that location, duration and size are not factors since all customers (both happy and not) share those same characteristics.
Test. Instead of looking at the data and making assumptions we can run tests! These are more sophisticated than simple A/B tests, since those won’t provide enough context to know if A or B is the driver of happiness. No, these tests involve modifying the customer experience in ways that follow a specific path and isolate variables. They are involved and complex, such as building multiple different customer on-boarding flows and seeing which produce happier customers.
There is a new generation of analytics and statistics tools that specialize in separating causality from correlation, but they rely on the data you have available. If the cause of customer happiness is not in your data, they can’t help you! These tools will improve, as will our data collection, but until then we need to do the hard work ourselves.
We all want more happy customers, but to get there we need to really understand why they are happy. That means looking at all of our assumptions about them, and taking a hard look at the real drivers of happiness. There are probably more than one!
You have happy customers today, do you know why? Are you sure?
For more on Customers and Product Strategy, see:
When Customers Attack it’s an opportunity!
Your Three Kinds of Customers and how to manage them.
Solving The Day Zero Problem is the key to customer satisfaction.
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