Could CHO Be More Important Than CRO? What You Need to Know About Customer Happiness Optimization

by Friendbuy

June 22, 2015

Imagine you woke up on December 21st and the present you'd ordered your beloved child for Christmas still had not been delivered.

And not just any present ― but THE present.

Like a Cabbage Patch Kid in the 80s, Tickle Me Elmo in the 90s, or Nintendo Wii in the 2000s.

You'd start to freak out a bit, right?

This actually happened to Amazon customer Joe Nocera when he ordered a PlayStation for his child. Mr. Nocera did what most if not all of us would do - he logged onto Amazon and tracked the package. His heart sank when he saw his neighbor had signed for the package when it was delivered. He quickly realized the PlayStation must have been stolen from his apartment building, so he decided to call Amazon customer service, knowing he didn't have much of a case.

After telling the Amazon rep his story, he was shocked by the response he got.

Confirming Joe's story, the rep shipped a replacement PlayStation immediately and it arrived on Christmas Eve. The Christmas Crisis was averted. Even more, in a stroke of luck for Amazon, Joe Nocera happened to be a columnist for The New York Times, so he wrote about his experience for the paper in a story that blew up and went viral on the web.

This is why Amazon CEO Jeff Bezos says:

"If you build a great experience, customers tell each other about that. Word of mouth is very powerful."


Jeff Bezos


Joe Nocera is now an Amazon customer for life and he told the entire world about it in America's newspaper of record. All because Amazon is obsessed with customer happiness.

So if customer happiness is so important, how does it apply to ecommerce?  How is it different from CRO?  And how do I optimize for customer happiness? This series of blog posts will untangle these questions with a little help from our friends so you can turn your ecommerce brand into a customer happiness powerhouse.

Don't Stop Short At CRO...

We asked Lindsey Gusenberg, former Senior Inbound Marketing Consultant at Hubspot and currently an Inbound Marketing Consult, what ecommerce marketers miss when it comes to Customer Happiness Optimization (CHO).

Here's what she said:

Lindsey Gusenberg

"Most ecommerce marketers don't get that customer happiness is extremely important — it's not just about the sale. Loyalty and referral business is a huge part of how ecommerce companies can stay profitable. If a brand has to pay to acquire the same customer over and over again, that becomes very costly very quickly. However, there's a definitive lack of a nurturing customer experience in ecommerce."

If you're still a bit confused, Lindsey defines customer happiness as  "a quantitative and qualitative measurement of a customer's satisfaction with your brand and product."

Think of CHO as optimizing the customer journey and CRO as optimizing your conversion funnel.

As ecommerce marketers, we're obsessively laser-focused on CRO, looking for any nook or crook to increase sales and put more revenue in the bank.

But this often comes at the expense of the customer experience, which can make all those conversions you fight for worthless in the end. This is seen in studies that have shown 89% of shoppers have stopped buying from ecommerce stores after experiencing bad customer service.

89% of shoppers have stopped buying form online stores after they've experienced poor customer service 

Bottom line: All the conversion gains of your CRO efforts will be short-lived if your customers jump ship because of poor experiences.

So let's talk a bit about how to think more long-term about the customer's journey...

Converting Visitors Is Not the Same as Earning Customers

We're all familiar with what a conversion funnel looks like. It's pretty straight-forward:

conversion funnel 

But mapping out a customer's journey through every touchpoint of your store can get a little... well, complicated:

Customer Journey Map 

A customer's journey with your brand involves every touchpoint you can think of, both before and after they convert - from the ads they see to conversations with their friends to how you let them know their purchase has been shipped.

The problem is this: most ecommerce marketers don't take the customer journey into account when optimizing for growth, leading to some of their CRO efforts actually working against them.

As Rand Fishkin, the CEO of Moz, says:

"When you get aggressive about converting customers fast and early, yes, you can really juice your revenue. You can turn a lowconversion rate into a high one. But you can also, in the long run, cost your company if you aren't measuring and thinking about the right things."



And even though it may seem like CHO doesn't apply to ecommerce because of its one-off nature, Amazon's efforts in this arena prove that CHO is essential to both lowering marketing costs and increasing sales. It's why Amazon is willing to forgo $600 billion in shipping revenue every year. In fact, they believe in the importance of customer happiness so much that it's mandatory for all Amazon employees to answer customer support calls for two full days every two years - even head honcho Jeff Bezos.

If you're not convinced, there's data to back up what Rand is saying:

Converting a boatload might feel good temporarily - like a sugar high - and it's easy to put on a PPT slide and sell to your boss. But did you know that it's 7x more expensive to get a new customer than retain an existing one? Seven times. Not twice as expensive. Seven times as expensive.

It's 7x more expensive to get a new customer than to retain an existing one 

If you're finding you're not getting enough return customers, increasing order sizes, or seeing customers share your products on social media, you might actually be converting too early the customer journey.

Now that you understand why CHO is better than CRO, how do you measure your Customer Happiness Index (CHI)? [Holy crap, another acronym!] And what are the metrics for measuring customer happiness?  Our next post is going to include tips how to optimize your customer happiness index and make your customers happy.

See how Tonal uses Friendbuy to drive up to 7% of online revenue. >>