How founders can embed a customer-obsessed culture in their startups

This article is from an episode on Matrix Moments by Matrix Partners India, a podcast featuring candid conversations on what it really takes to survive the startup world. This is heavily revised from the original show transcripts. For the full interview, go here. 

What does it mean to be truly customer-obsessed? In this episode, Matrix Partners India founder and managing director Avnish Bajaj talks about how customer obsession, delight, and satisfaction are instrumental in taking your startup to the next level.

Customer obsession, delight, and satisfaction sound like they mean the same thing. Can you differentiate the three and identify some examples?

The key point is we are all customers. We are all human beings. We feel a certain way when we’re satisfied, delighted, and obsessed.

Satisfaction means I got what I expected. Things didn’t go wrong. Delight means something new happened, so a “wow” factor comes in. There’s an element of surprise. Obsession means you can’t stop thinking about something. You think about it when you go to bed at night and when you wake up in the morning.

One time, I stayed at a Ritz-Carlton hotel, and I remember asking for a newspaper, a particular type of pillow, and a specific time for when I prefer to have my breakfast. Next time, I was in a different part of the world and checked in at another Ritz-Carlton. There was a note on my pillow welcoming me back, which is pretty normal in most hotels – and this was in the 1990s. But it also said my pillow and newspaper requests had been noted. It also mentioned my preferred time for breakfast.

That was true delight, but one that comes from obsession, I think. Delight can happen as a one-off. So if I have to define it, a company that is truly obsessed about its customers delights them all the time versus just one time.

An excellent book I recommend about service management is Delivering Happiness: A Path to Profits, Passion, and Purpose by online shoe retailer Zappos CEO Tony Hsieh.

How can companies measure customer obsession, delight, and satisfaction?

There are a bunch of metrics. The first one is CSAT, which is the customer satisfaction score. Second is NPS or net promoter score. Now, interestingly, companies use these interchangeably, but they are two very different things.

Then, there’s cohort analysis, which is basically the number of repeat users you get based on a particular group of users. Another metric is repeat rate. Again, companies tend to confuse these two. Cohort analysis is this: How many of the users I have in, say, January 2018 are still there in February 2019? On the other hand, repeat rate is this: In February 2019, what percentage of users have transacted with me before (which means the sum total of everything)?

You can have good-looking repeat rates and poor cohorts at the same time, which is less healthy than if you had great cohorts. And the reason is that it depends on how your business is growing.

But if I had to prioritize metrics, cohorts and repeat rates are trailing indicators. One could argue that CSAT is a leading indicator because if you have transacted with somebody, you often ask them their satisfaction score. But guess what? It depends on when, where, and how you measure these things.

For example, I was transacting on an ecommerce site the other day, and it asked me how satisfied I was (CSAT) and how likely I would recommend the platform (NPS). But since I had yet to receive the product, should I rate the product I ordered, the website experience, or the delivery service? It’s very confusing.

You’ll have to separate the signal from the noise because a lot of what you would see out of a score like that is pure noise. The most important part of an ecommerce experience is the entire end-to-end fulfillment. This is why where, when, and how you measure these things is very important.