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Happy Customers Everywhere
How Your Business can Profit from the Insights of Positive Psychology
By Bernd Schmitt, Glenn Van Zutphen St. Martin's Press
Copyright © 2012 Bernd Schmitt
All rights reserved.
ISBN: 978-1-137-00046-0
CHAPTER 1
THE CASE FOR CUSTOMER HAPPINESS
I'm sitting in a café at the corner of Orchard and Scotts roads in Singapore after a long flight from New York. The iced latte is just what I need to slake the weary, jet-lagged feeling that's defining this moment. Surrounding me are sparkling shopping malls, massive five-storey-tall outdoor TV screens, restaurants, hotels and movie theaters. Luxury brand names spill out of boutiques onto the sidewalk as easily as the shoppers who flit from store to store in search of retail satisfaction.
Singapore is one of the epicenters of shopping, not just in Asia, but globally. Of course, nearby Hong Kong deserves a nod for its stretch of malls from Pacific Place to Central and into the International Finance Centre of Hong Kong Island, and for its massive retail malls in Tsim Sha Tsui. Expansive shopping malls have also been developed in Beijing and Shanghai. The Ginza shopping district in Tokyo has been revamped. The United Arab Emirates' shopping malls are following suit. In South America, too, I have seen glitzy new malls. In terms of sheer, over-the-top, slick consumerism, Singapore is at least equal to — or surpasses — all of them, including the Mall of America in Minnesota, Fifth Avenue in New York City, the Golden Mile in Chicago and any European shopping street.
There are many nationalities sitting around me. I listen to excited shoppers talking in different languages about what they've just purchased. Everyone seems to be making the most of their lattes, cappuccinos and warmed muffins before beginning the next round of retail therapy. People seem to enjoy that sort of experience: relaxing between shopping. More than that, and this may seem strange, they look — and sound — happy. There seem to be happy customers everywhere!
How can this be? Haven't philosophers over the centuries and numerous writers and psychologists argued and proved that materialism is bad for us? That shopping distracts us from achieving our true goals in life? That it's superficial and that commercial consumption can't create happiness?
Maybe these authors were missing something. Maybe people can experience happiness as consumers. Maybe it is possible, as the ads of stores surrounding me proclaim, to "find happiness in shoes," to "find happiness within" (ice cream, that is) and to "forget love" entirely and "fall in chocolate." After all, how do you explain consumers' obsession with Apple products? How do you explain why people may go out of their way to find something as mundane as the right hair conditioner? And doesn't an argument over Coca-Cola versus Pepsi sound like a lovers' quarrel?
Consider McDonald's "Happy Meal." Launched more than 30 years ago in June 1979, the "Happy Meal" is viewed by some as a gimmick to get young consumers hooked on the company's burgers and fries with a cheap toy. Nonetheless, in its approach McDonald's was far ahead of its time in considering the notion of customer happiness.
The usual explanation, brand preference, just doesn't seem to do full justice to what's going on. Some consumers do not just prefer a brand; they seem truly happy about their purchases and are genuinely in love with the brand.
The core premise of this book is that shopping for goods, buying them and consuming them can indeed make people happy. While consumerism and marketing are often critiqued as distracting individuals from the pursuit of finding happiness in their lives, if done right and with a genuine interest in consumers as real human beings, commercial activities and marketing can enhance an individual's well-being, quality of life and life satisfaction.
Specifically, shopping, buying and consuming can result in pleasurable moments and sometimes in meaningful and engaging experiences that create happiness. Moreover, customer happiness does not need to be a passing mood. It can last and create an intimate and ongoing close relationship between a company and its customers. This relationship can strengthen the brand and result in future revenue.
My argument is entirely consistent with conceptual developments and empirical research over the last decade in the field of psychology. Thus, throughout the book, I will use psychological concepts to develop strategies and methods that can lead to customer happiness.
HAPPINESS: THE NEW APPROACH TO CUSTOMER BEHAVIOR
Nowadays, customer behavior is being approached on a different level and more deliberately than ever. Companies seek to build close relationships with their customers and not merely market to them using transparent advertising messages. They want customers to experience pleasure, find meaning in their products and services and be fully engaged online. Companies want to connect with their customers on an emotional level: they want them to fall in love with their products and services. They want to appear on customers' blogs and tweets and on their social networking sites.
As a result, companies today are spending big money — as well as much effort and time — to develop happiness campaigns and to incorporate them into their customer-oriented business strategies.
In 2012, following the success of its McCafé, McDonald's will accelerate a USD 2.4 billion program to rebuild, relaunch, and refurbish thousands of its restaurants around the world. In what it's calling the first restaurant makeover since the mid-1970s, the company's "Experience Engineer" and VP of Concept and Design, Dennis Weil, has devised four concepts for seating zones: chilling out, working, casual dining and group events. The cool revamp, with its clean lines and modern design, is an effort to make McDonald's restaurants a place where people will come to hang out. It's supposed to be a sort of fastfood town square, a place where people will nurture relationships that researchers tell us are central to happiness. The plan appears to be a winner: sales are up 6 to 7 percent at locations that already sport the new look. The company is banking on the fact that the new McDonald's will change behavior and draw in people for a mutually shared happy experience, rather than the traditional pattern of pickup-and-go.
CUSTOMER HAPPINESS IS EVERYWHERE
Customer happiness is no longer just associated with what you eat or drink. Hotels, car manufacturers and life insurance companies are trying to make us happy. Consumer electronics manufacturers are jumping on the bandwagon. Happiness is also no longer limited to large firms. Ask any Pilates studio or private yoga instructor: they all want to make you happy, too.
The concept may be coming to your local bank as well if you live in Australia. In 2007, the Bank of Western Australia in Perth, commonly known as Bankwest, challenged its larger competitors in the Australian banking industry to explain why banking can't be more positive. This led to its "Happy Banking" and "Banking Refreshed" advertising campaigns. The ads showed various happiness experts helping the bank to understand what would make customers happy and how to improve service.
The retail campaign entailed the creation of 160 new branches across four states. According to Bankwest, from 2007 to 2010 the "Happy Banking" campaign helped double the number of customers, from 450,000 to over one million.
If today's marketers want to empathize and connect with customers, it's hard to imagine getting any closer to the target consumer than Procter & Gamble's (P&G) campaign for the Always brand of feminine hygiene products, "Have a Happy Period." As its dedicated website says: "This is the time of the month that's all about you. So be your own best friend. Make it your mantra to indulge yourself and celebrate 'being girl.'"
The website hyperlinks to another website, seemingly aimed at pubescent girls and their concerns about menstruation, relationships and other pangs of adolescence. Inspired by the recent wellness trend, the "Have a Happy Period" page gives tips on how to, well, have the best period ever. The website offers the following practical suggestions:
• Make a hot cup of herbal tea.
• Melt away stress by taking a warm bath with candlelight and bath oil.
• Take a walk or a yoga class.
• Watch TV with a heating pad on your stomach.
• Consider dry heating pads — warm wraps that will let you leave the house and participate fully in your life.
• Sleep in late on the weekends and serve yourself breakfast in bed.
• Satisfy your cravings for a particular food.
It's important to note that this campaign, which started in 2007, got a lot of flak from journalists and letters from some indignant women, including this open missive to P&G from a blogger in Austin, Texas:
"Sir, please inform your accounting department that, effective immediately, there will be an $8 drop in monthly profits, for I have chosen to take my maxi-pad business elsewhere. And though I will certainly miss your Flexi-Wings, I will not for one minute miss your brand of condescending bullshit. And that's a promise I will keep. Always."
Yet, despite these and other subpar reviews of the campaign, it seems to be quite successful. Infegy's Social Radar social media monitoring and analytics system says the "Happy Period" campaign has remained overwhelmingly positive since it first appeared in March 2007. The campaign probably would not have worked 10 or 12 years ago, when customers did not desire such a personal relationship with manufacturers and brands, especially involving such a sensitive topic. Its success today shows how important the concept of happiness has become in people's lives.
Even national governments are getting in on the act. My colleague at Columbia Business School, Professor Joseph Stiglitz, a Nobel Prize–winning economist and former World Bank chief economist, is pushing governments to make sure they consider the happiness of citizens as equal to, if not more important than, the mere measure of gross domestic product (GDP).He believes that looking at GDP without considering the cost of economic progress (environmental degradation, for example) gives a false picture, and he urges governments to look at both the assets and liabilities on society's balance sheet.
The idea behind this new approach is that after a certain point, rising national wealth stops making its citizens any happier. This effect, called the Easterlin Paradox, has raised the question "What does it take, then, to make people happy?" In response, "Happiness Economics" has emerged as a discipline over the past 15 years. Combining economics with psychology and sociology, it quantitatively studies topics like well-being, quality of life and life satisfaction in addition to the traditional notions of wealth, such as income or gross domestic product.
In late 2010, the government of the UK announced that it would start measuring people's psychological and environmental well-being, making it one of the first countries to monitor the happiness of its citizens. The governments of France and Canada are considering similar measures. Let's see whether the government of the country that wrote the pursuit of happiness into its Declaration of Independence will start a happiness campaign soon.
HOW IMPORTANT IS HAPPINESS IN B2C AND B2B?
Just like other recent business trends (branding in the 1990s, customer experience in the early 2000s and new media in recent years), customer happiness as a topic first appeared on the agenda of B2C companies. Customer happiness is very important in B2C businesses and is used increasingly for competitive advantage. However, I expect it to be picked up by B2B companies as well since the message is no less useful there.
B2B dealings may involve different products and services and use different criteria for decision making (order time, proximity to a factory, global sourcing system, etc.). But if you are running a B2B business, you should also be concerned with whether your company customers, suppliers and trade customers are happy with your services. After all, the decision maker will be an individual or a group of individuals. Small pleasurable moments during a sales meeting or an immersive experience at a trade show can make a big difference. Also, doing business with a company that shares similar values can be rewarding. Most importantly, you should engage both business customers and end consumers alike to ensure a healthy bottom line.
Many of the benchmark cases and best practices featured in this book will come from B2C. Yet this book also includes B2B examples — like the case of Brainlab, a company that sells medical technology equipment; the Central Asia Group, which explores the use of mobile banking technology in Afghanistan; and IBM's Smaller Planet campaign.
THE PHILOSOPHY AND SCIENCE OF HAPPINESS
Wikipedia defines happiness as "a mental state of well-being characterized by positive emotions ranging from contentment to intense joy." According to psychologist Ed Diener, individuals experience happiness "when they feel many pleasant and few unpleasant emotions, when they are engaged in interesting activities, when they experience many pleasures and few pains, and when they are satisfied with their lives." Because the emotional experience of happiness is often evoked by an event or a person, it may be measured by asking to what degree the event or person (or brand) contributes to happiness, or, reversely, how much an individual might miss the event, person or brand if it were no longer present. Moreover, happiness is a subjective psychological state: what makes people happy differs from person to person. Happiness is often momentary and transient, although it can also persist to the point of becoming a characteristic trait. When we characterize someone as a happy person, we refer to their consistent display of positive emotions and life satisfaction over time.
For two and a half millennia, thinkers like Confucius and Buddha, Socrates and Aristotle and Immanuel Kant and Karl Marx have been philosophizing about what constitutes happiness and/or a "good life." Naturally, their views varied widely. Some advised a "religious life," while others advised us to stay away from religion (Karl Marx wrote that "the first requisite for the happiness of the people is the abolition of religion"). Buddha taught that happiness entails wisdom, and Aristotle proclaimed that happiness is intricately linked to ethical conduct and virtues. We will sort out these different views and examine their relevance to business in chapter 2.
It is also useful to look at modern-day scientific thinking on the topic. The positive psychology movement, in a sense the basis for this book, has put the spotlight on happiness since the beginning of this century. Martin Seligman and Mihaly Csikszentmihalyi, two of its key proponents, consider it as a science of positive subjective experience. The field of positive psychology thus provides an alternative perspective to traditional psychology's decades-long obsession with damage repair and healing. Positive psychology stresses positive experiences (including wellbeing, contentment, satisfaction, hope, optimism, flow and love), positive individual traits (such as aesthetic sensibility, perseverance, originality and future purpose), and positive institutional values (such as responsibility, civility, tolerance and work ethic). This book will use key concepts of positive psychology to develop business frameworks and tools for creating happy customers.
Why, you might ask, should companies dedicate their limited resources to making customers happy? Aren't they in the business of making money, not spending it on something as elusive as customer happiness? Making customers happy may be an admirable goal. But are we, as business people, now supposed to become therapists, social workers or, to use a more contemporary term, "life coaches" for customers?
Assuming we are even able to devise tools for creating happy customers, how will doing so impact on the bottom line for business?
Make no mistake, there is a business objective here — a big one. Companies don't create happiness campaigns just to be nice. Happy customers provide immense value to a company. Companies want to profit from customer happiness. In other words, companies see dollar signs on customers' happy faces.
(Continues...)
Excerpted from Happy Customers Everywhere by Bernd Schmitt, Glenn Van Zutphen. Copyright © 2012 Bernd Schmitt. Excerpted by permission of St. Martin's Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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