Customer Happiness in SaaS: What is it and How Can You Improve it

Are you measuring customer happiness?

Should you?

In this article, we’ll look at ways you can use user feedback to understand what makes your customers happy or not. We’ll also go over some of the best strategies to boost customer satisfaction and make customers happy.

What is customer happiness?

Customer happiness refers to the degree of satisfaction users have after interacting with your team and product. It also determines user loyalty to your brand—the higher the customer happiness, the higher the likelihood they’ll stay subscribed to your software.

Customer happiness vs. customer satisfaction

Customer happiness is not to be confused with customer satisfaction.

The latter refers to meeting what users expect from the product or service while trying to get their job done.

This is not bad by any stretch of the imagination, but if you can go the extra mile to make customers more than satisfied, why wouldn’t you?

Customer happiness is about exceeding users’ expectations.

It’s about delivering the goods and then some.

Why is customer happiness important?

As a predictor of brand loyalty, customer happiness is about delivering more than expected value to your audience, resulting in repeat business and sustained revenue.

In fact, by doing everything under your power to continuously delight users, they will most likely return the favor through positive reviews and referrals.

By developing customer loyalty, you can turn users into advocates who can help drive your product’s growth.

Also, happy customers form emotional bonds with your brand. As a result, replacing your brand with something else will not be top of mind for them.

How to measure customer happiness

By collecting information on what makes your users happy, you can set a benchmark for your customer happiness and work your way towards improving it through your business strategy.

But it’s not just a metric you’re going for.

Collect analytics data concerning customer loyalty, measure customer satisfaction, stickiness, and any other metric that can give you insights about customer experience.

Here are some metrics that will help.

Measure customer satisfaction

By measuring and monitoring satisfaction using customer satisfaction (CSAT) surveys at different touchpoints and interactions with your software, you can understand user experience much better.

Nicereply uses a CSAT survey after customer support tickets get closed. The survey asks customers to rate the reply based on how “nice” it was (get it?).

Measure customer retention and stickiness

There are various reasons why customers stick to a product or not, and one of them is happiness.

The greater the happiness users have with your product, the likelier they’ll stick with your brand through thick and thin.

To compute customer stickiness, you can divide the daily active users (DAU) by monthly active users (AUR). For example, if you have 100 DAUs and 500 MAUs, the customer stickiness is 0.2 (100/500).

Measure customer lifetime value

Happy customers have no reason to churn. And the longer you retain customers, the higher the customer value or lifetime value (LTV) becomes.

Customer value talks about how much a product is worth to a user, while LTV refers to the amount of money your company has earned from a customer as a paying subscriber.

By identifying your customer value, you can zero in on what makes loyal customers stay, and replicate that for new users.

Computing for customer lifetime value requires dividing average revenue per account (ARPA) by customer churn rate. For instance, if your ARPA is $100 and your churn rate is ten customers a month, your CLV is $10/month (100/10).

Measure customer loyalty with a Net Promoter System

Unlike CSAT, which measures individual customer experiences, the net promoter system (NPS) measures overall customer loyalty.

An NPS survey asks, “How likely are you to recommend us to your friends?” where customers must choose an answer on a scale of 0 to 10 (10 being the most likely).

Based on their answers, you then divide customers into three groups:

• Detractors – Score between 0 to 6. They are unhappy with your company and won’t speak positive things about you to anyone.
• Passives – Score of 7 or 8. They are your satisfied customers who have had decent customer interactions with your support team and feel that your company met customer expectations.
• Promoters – Score of 9 or 10. They feel you’ve exceeded expectations based on your software features and excellent customer experience.

Monitor social media brand mentions

Brand monitoring is about analyzing what people say about your brand on different channels to understand user sentiment.

Happy customers might share their experiences with others and drive word of mouth.

From here, you can check what delighted them and how these reasons contribute to your customer happiness.

Conversely, unhappy customers post their negative experiences with your company on social media. In these cases, you must be mindful of their words and the instance that made them unhappy.

13 Strategies to improve customer happiness

Using the insights collected you can then try implementing some of the strategies below to increase customer happiness.

Collect customer feedback at different touchpoints and close the loop

Collecting customer feedback is the first step. But it’s not enough to simly ask for feedback and analyze the data if you don’t also close the feedback loop by acting on the insights.

Build a feedback management system where you collect active and passive customer feedback, and use the insights to improve both the product and the user experience.

The important part is to collect feedback directly at multiple touchpoints not just once in a while. This will give more specific data to work on.

For example, Miro has implemented multiple feedback widgets across their UI, to collect more granular feedback.

Guide new customers to experience value fast

The happy path is about the minimum number of interactions a user must go through before experiencing value.

Guiding users on the happy path specific to their use case will get them to experience it faster.

You can do this by personalizing the first-time user experience.

For example, if a customer moves to your email platform, you want to allow them to migrate their lists and campaigns from the old tool to yours.

ConvertKit does precisely this, so users don’t have to do this manually and can continue building their lists and engaging with them through email campaigns and automation.

By monitoring which paths aren’t getting users to where you want them to be, you can improve unhappy paths and increase customer happiness.

Provide excellent customer service with self-service support

Customer service is about providing users with the support they need, when they need it.

To exceed their expectations you should look at automating customer service as much as possible so you won’t need to invest in growing your support team across the globe as you grow.

Here’s where self-service support comes in.

Implement an in-app resource center that gives users access to on-demand help, right from inside the product.

Add interactive guides, tutorials, educational resources, and direct access to provide feedback or reach your support team if they need more help.

Celebrate success and make sure customers feel appreciated

We tend to repeat actions that drove us to success. If something works, we need to keep doing it even more.

UX gamification taps into user psychology and through emotional design results in increased dopamine levels and higher engagement with your tool when users reach success,

An example of gamification in action is Duolingo. Adding goals you need to complete and how close you are to completing them motivates you to stay engaged and reach more milestones.

Implement a customer loyalty program

Launching a customer loyalty program can be seen as an incentive to engage with your software, encouraging users to stay loyal, and giving them extra reasons to love your brand.

There are different types of customer loyalty programs you can try:

• Points-based programs – customers earn points by completing specific actions
• Referral programs – offer rewards when you get a new customer through a referral
• Rewards program – customers can win certain prizes if they perform certain actions
• Mission-driven loyalty programs – instead of using points or rewards, contribute to a cause, making users feel part of a greater good

Whereby presents a mission-driven loyalty program in which the company plants trees every time you use its video meeting software.

Don’t neglect unhappy customer

Unhappy customers are important too. Acknowledge negative feedback and understand where it’s coming from so you can act on it.

A way to do this is by tagging specific qualitative responses you collected from your NPS surveys and identifying common themes that correlate with low scores – aka unhappy customers.

You can then automate in-app responses or personally reach out via email to better understand the cause of dissatisfaction and help.

In the example below, “Missing Features” is a common reason that users with low NPS scores are mentioned in their feedback.

Improve customer experience with UI feedback

Problems with your software’s user interface (UI) occur when users don’t perform the necessary action your software requires.

An example is not entering the correct values to the required fields in a signup form like name, email address, and others.

To fix this, implement UI feedback to decrease user friction and provide customers with the best customer experience possible.

Incorporating feedback error messages in your signup forms points users to the right course of action and increases conversions.

Make sure each customer interaction is a happy one using in-app guides

To further provide a frictionless customer experience, use in-app tutorials and guides.

In-app guides help with end-user training which is all about helping users engage and learn how to use your product in order to get their job done.

Training your users with automated guides will also reduce the level of help and support they will need.

You can easily create these using instructional design software without having to code.

Personalize in-app communication with advanced segmentation

Help and guidance need to be contextual. With proper segmentation, you can identify the most appropriate tips and hints to show a specific group of users.

Use behavioral segmentation to personalize each in-app experience.

You can segment based on product usage rate (how often are they engaging with the product), needs-based (what is their main job to be done) or product usage (the features they engage with most).

Or, create segments based on user feedback and automate in-app messaging based on it.

Close the value gap and increase customer satisfaction

Customers will use your product to get their job done. Once they learn how to do this, it’s all about repeating the same steps.

They don’t log in with the intention of discovering what’s new.

Your failure to communicate new feature launches that could add extra value creates a value gap.

Don’t wait for users to discover new features. Use tooltips and hotspots at different touchpoints to point out relevant features that will provide more value.

Achieve customer happiness with small rewards and an emotional connection

You shouldn’t only solve the customer’s problem through fast and great customer service, but also try to listen and spot opportunities to delight users through various customer interactions and small rewards.

One time, we sent a t-shirt to one of our customers who jokingly asked for one during a support discussion.

The result? A happy customer that shared the joy via social media.

Now, this is next-level personalization and you can’t and shouldn’t do it for all your customers.

Drive upsells in a contextual way

Similar to helping users discover relevant features, prompting them to upgrade at the right moment will improve customer satisfaction.

The emphasis on “right” is deliberate.

Loom is an example of upselling done right.

After customers hit the five-minute recording limit several times with their free account, a modal appears recommending they upgrade, while mentioning why this will bring more value.

Offer alternatives to churning

When users cancel their subscriptions, you might think there’s nothing left to do.

Understanding why can help improve the experience for future customers and reduce churn.

Use churn surveys in your cancelation flow and ask users the main reason that made them cancel.

This user offboarding process is an opportunity to offer alternatives to canceling. For example, maybe someone doesn’t need your tool for a few months and they are canceling because they don’t want to pay the subscription.

In this case, offer to suspend and freeze their account in the meantime. This way, they can keep their data to get back without hassle when needed.

Conclusion

Customer happiness is something all businesses should strive for.

By discovering how happy (or unhappy) your customers are with your software, you can make necessary improvements to make unsatisfied users more than satisfied and happy customers happier.

Want to get started with customer happiness? Get a Userpilot Demo and see how you can delight more customers and keep them subscribed for a long time.