How happiness can be understood with large scale computational psychometrics

There are several major technical areas to solve in order to quantify customer delight.  Customer delight is a well-documented, but hard to achieve KPI. It is a form of “measured happiness”. Jeff Bezos understands how important it is and has 5 teams working on it at Amazon. It’s that important.  

Most organizations prioritize deep understand of “data of the past”, a term Clayton Christensen, the well-known Harvard professor, uses when describing the shortcomings and ultimate demise of market leading organizations. By focusing on data of the past, even if you are applying predictive analytics to that data, can lead to shortcomings and misleading results. Many organizations predict the obvious because it is safe to do and creates the least amount of risk to the culture of the organization. Just ask Kmart, Sears and GoPro to start. Reinventing oneself is not new and it should not be so hard.

While Clayton is fascinated why great organizations fail, we would like to see that issue avoided. If technology can help, the better we all would be.

Data at scale is a start. Having massive data at scale on people activities means one has the building blocks of a better way. When you understand what people do in their lives and work helps form the basis of understanding why they make certain purchasing decisions.  

Having a job to be done is fine, understanding why the job is to be done is much better. People are different and combining Big Data with predictive characteristics of people based on that data drives real results back to CRMs.

Many companies can quantify human activities, demographics, income and wealth data. Many sources of data can tell us what types of occupations and cars we drive. What this lacks is what does it mean to be a scuba diver, a plumber, drive a certain type of car and on and on. By converting human activity and demographic data into predictive psychometric data, one approaches a much better understanding of who our customers are and why they buy. It leads to quantifying what delights people. When Clayton talks about “jobs to be done”, the lack of a psychometric context of the person limits the choice that person will make. By understanding people psychometrics at scale, you can see CRM patterns that are otherwise invisible.

We have discovered that what drives sales, psychometrically, can be described by a handful of variables closely associated with a person’s personality and traits. Those variables are much greater indicators of what will be purchased in the future than past sales data, cookie data and the like. Just because you went to Paris does not predict you will keep going. Today, companies like Amazon do very well “predicting” ink sales if we buy a printer. They recommend we buy lens caps if we buy a camera, cases if we buy a hard drive. While these are good reminders, they are not delightful. Lacking delight opens up the risk of price shopping and loss of brand equity of the organization, something Jeff Bezos understands well. No one can win a price war in the long run.  

The words people use can be converted into a rich understanding of their beliefs, desires, relationships and personalities. By understanding cognitive patterns and connecting to CRM data, we find the psychometrics of the CRM. Doing so creates certainty which drives speed and alignment with the organization. If you ever fretted over an analytics program, you understand how so many choices often do not lead to a clear path.

Once we understand why people buy and are delighted, we have a clear path to creating customer delight and remove complexity and uncertainty within the organization. Customer delight is broken down into 3 key elements:

  1. Create customer loyalty. Instead of rebuying your customers through paid media, how can we get people back easier?
  2. More profits. Easy to say, hard to execute. While many businesses are offering discounts right away, having customer delight slows down the coupon bus. Apple does not have coupons, you don’t need them either.  
  3. Reviews. A customer who gets it, says nice things, online and to friends. They own it, flaunt it and you win.  

According to a Bain & Company report on Net promotor score and profits, only 9% of organizations surveyed could sustainable profits and growth for 10 years. By understanding the psychometrics of people within our CRM, we eliminate complexity, the enemy of certainly.

Our research has found that only 2 to 4 personality types are profitable for any given SKU or product line found in an entire CRM. When we look at market share of most companies and we examine the details of the Bain & Company search on sustainable profits, we see a reason why organizations are limited. They spend most of their funds focused on people they cannot delight. It creates anxiety and frustration with the organization, expending resources with no outcome. We found that a 10 to 1 difference exist between the most profitable personality vs the least. Organizations that understand why we have a job to be done are most likely to scale and outperform competitors.  

Organizations that focus with the end in mind and prioritize what is important most, can create customer delight. A 5% increase in customer retention alone can yield 25% to 100% increase in profits if they have the predictive data appended to their CRM. Companies that go beyond the CRM and create look-a-like models can locate audiences that while harder to reach, prove to be a better path to sustainable profits and long term happiness, both inside and outside the organization.

We know this is a complex topic and we left out a lot of secret sauce. Contact us if you want to solve real problems, we are delighted to share how and help you reach that better place. To learn more and see how we can help you, please contact us.  We promise a call is worth the effort.

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