If They’re Happy, You’re Happy

Boy, it’s nice to be right. I have often argued that companies looking for long-term success should spend their time making customers happy. Now, a recent study covered last month in The Wall Street Journal (“What Separates Web Winners From Losers”) appears to confirm my theory.

David Aaker and Robert Jacobson, along with Techtel Demand Research, surveyed Internet users between July ’99 and November ’00 to look for parallels between the consumer perception of Internet companies and the stock prices of those companies.

In the typical marketing mindset, we might think that online brand awareness would be a predictor of success. Not so, say Aaker and Jacobson. They observed “no association between gains in awareness and changes in share price.” What did make the difference? Consumers’ attitude toward the brand. “Firms experiencing [positive] gains in attitude… outperformed firms experiencing losses in attitude.”

You may or may not be surprised by this. If you’ve always thought that the secret to success is getting more users to know your name, you’re half right. But what a half! The secret is in getting the folks who do know your name to feel good about your name. If you have strong brand recognition, but much of that recognition is linked to a negative perception, you’re on shaky ground. If, on the other hand, most people who know about you feel good about you, you are poised for success.

It all comes down to how well you are serving the user. Happy customers mean repeat customers. Repeat customers free your business from the vicious (and unprofitable) circle of customer acquisition: Get customer, process customer, lose customer, get customer… Someone who returns of his or her own accord is someone who can make you money. And the way to get someone to return of his or her own accord is to make that someone happy.

This is where marketing for the user comes in. Finding out what problems customers want solved and working to solve them will make your customers happy. Do market research, do user testing, and do not assume that a snappy Web site, a press release, and an ad campaign will satisfy your customers. These three things can give you a great corporate image, but this study seems to find that, contrary to popular opinion, image is not everything.

Marketing for the user pays dividends in many ways. While it may not be the single best way to drive page views, it makes those page views worth something. This study indicates that marketing for the user is not just a nice idea, but also has important financial implications. We don’t typically think that good customer service and well-designed products equal money in the bank. Aaker and Jacobson’s work begs to differ. Treating the customer right does pay off.

For many online companies, I think the answer will be made crystal clear in the coming months. Where little focus has been placed on pleasing the customer, and rather more on pleasing analysts and investors, all three will be facing a losing hand. Those companies with a long-term view, a soft spot for their users, and an emphasis on making each customer happy will ultimately be the survivors.

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