Are your customers happy?

Let's say you've launched your product or service.

It's been a few months or years with things are ticking over. But you've got a niggling feeling in your gut that something's missing, but you're not quite sure what it is. 

Your current customers are happy-ish. Sales are okay-ish. Growth is fine-ish. Retention is...alright-ish. 

They say that retention is the fastest way to grow your business as it's cheaper to keep a customer than it is to acquire a new one. Most businesses seem to focus more on acquisition than retention. There are many reasons why that might be: New usually feels better than old. You may also feel like your customers are happy enough with your product and services so you don't need to worry about them. 

There may be other valid reasons why your customers are sticking around, but your business may face problems when the market shifts, or when more competition enters your space that is easier to use or cheaper buy.

And unfortunately, this happens all the time.

Is she using your app, or checking out the competition?

So how do we solve this?

Well, one approach is to dig into your customer base. You can do this by segmenting your customers into different types of users:

🤑 Happily paying

🙃 Reluctantly paying

😐 Indifferent

🤬 Unhappy

Ideally, you would have more of the former and fewer of the latter. One way to segment this group is to run an NPS survey which asks your customers how sad would they be if your product or service no longer existed. This can be an illuminating question. 

What usually happens with this is that only certain types of users fill this out so you need to be mindful that your product isn't just developed for your noisiest customers.

One way around this is to try to engage with customers over different channels. Email them, call them, even write a letter to them (if it's appropriate). If you can, maybe talk to them in person to find out if what segment customers fall into.

Segmentation

The first part of this step is easy.

Very politely ignore your unhappy customers for segmentation. If you've treated these people with fairness and respect and they still don't like your service, then it's unlikely you'll be able to use the data you gather from them for this exercise.

Likewise, I suggest you do the same with your indifferent customers. If you haven't provided enough value for them to care either way about your business then there currently isn't enough to learn for you to make better decisions from.

Next, move onto your happily paying customers. This group of customers is key. You need to know why they're so happy - and hopefully, it's to do with your business! Is it because you solve a particular pain point? Do you enable them to do a job faster or better? Do you help them look good in front of their colleagues or managers? Is it your customer service?

Work to understand what the key things are that keep them happily paying. Try to see if there is a correlation between all your customers or different customer profile types. What value do they think you offer? This is crucial because as we say, it's often very different from what the value you think you provide. 

Watch out if the overwhelming reason your customers are happy with you is the price. Differentiating on price can be a difficult position to defend. A competitor could come along and do a similar thing to you at a cheaper price and your customers would shift. It's important to not turn your product into a commodity.

Now to look at your customers who are reluctantly paying.

As with your happily paying customers, you should try to find out what they're paying for and why. What is important to focus on is their reluctance. Why are they begrudgingly paying you? What life event or circumstance is causing them to need your product or service? Dig into this information as you could uncover other pain points for these customers. What you find out will also give you steps to improve your offering too. 

What next?

You should now have a wealth of (ideally) unbiased knowledge that will allow you to understand more about why your customers are staying and paying, their understanding of your value, and what pain points you're solving.

Your customers are rarely buying what you think you're selling. You may think you're just a marketplace, but you may be much more. Or something completely different in your customers' eyes. With this process, you'll find out.

Armed with this, you can convert your reluctantly paying customers to happily paying and make your happier customers even happier.