Is real-time customer feedback a dream, or a nightmare? My in-person challenge to HappyOrNot co-founder Ville Levaniemi

Here's a bad way to cover an event: only meet with clients, or people who agree with you. I sharpen my chops by seeking out companies whose business models trouble me. Give me the clash of ideas - and the rethink.

At NRF 2019, it was facial recognition tech - and I put my own face to the test. This year, it was HappyOrNot, a company whose nearly-ubiquitous "instant feedback" buttons I am deeply skeptical of.

But give HappyOrNot and their PR team at Deliberate PR credit. Even after I sent them a critical email, their founder and Executive VP Ville Levaniemi was up for the challenge..

HappyOrNot is not exactly a startup desperate for my publicity - they could have easily blown me off in search of powder puff page views. Now with 4,000+ customers in 135 countries, including McDonald's, Elkjop, Amazon, JACK & JONES, and London Heathrow Airport, 1 billion+ have pressed HappyOrNot's green-to-red feedback buttons.

I'm sure they had more enthusiastic PR responses to choose from. Here's my pre-NRF response to their pitch:

"So I was at an airport recently, and a "happy or not" thing was in use at the gift shop.

A nice employee at the register was dejected because the last customer, they didn't have what they wanted, so he clicked "unhappy," which dings the employee and hurts her performance review, even though it wasn't her fault. She was just the one stuck delivering the bad news about an item they don't carry.

In short, I have real concerns about "happy or not" because of things like that, which tend to undermine already beleaguered and underpaid employees. "happy" or "unhappy" doesn't matter nearly as much as why and what's being done about it...

If Ville would like to have an honest discussion about that type of problem and what to do about it, then I'm interested in an interview.

Otherwise, I'll pass."

HappyOrNot accepts the diginomica challenge

Two weeks later, I'm sitting down at NRF with Levaniemi, who is far more gracious than I probably deserve. HappyOrNot is not an overnight success story. Now headquartered in Tampere, Finland, they were founded in 2009. But the idea goes back further. Levaniemi told me that his co-founder, Heikki Väänänen, had one of those classic/crappy moments of consumer frustration at an electronics store about ten years prior to that. Like many of us, Väänänen left the store disgruntled, but: he decided to do something about it.

Väänänen and Levaniemi founded HappyOrNot in 2009, based on the simple idea of empowering customers to give easy/instant feedback (initially, they were thinking employee feedback as well, which I like better, but anyhow).

To Väänänen and Levaniemi's surprise, there really weren't competing products at the time. Early use cases helped HappyOrNot figure out that the proper number of feedback buttons to provide was four (they started with two). Their first big customer? One of the largest supermarket groups in Finland. Not long after, Heathrow Airport signed on, bringing international visibility to HappyOrNot. In turn, that sparked the growth that led to our debate. Levaniemi told me their early supermarket client was eye-opening:

They told us, "Hey guys, we need this." They had a huge amount of data already available for the management. But: they didn't have any intelligence, any data that they could share weekly to the location level. Their challenge was that they were revamping their fresh produce operation. Some of the store managers resisted, and it just didn't work.

Store managers weren't necessarily tuned into how fresh produce was stored and stocked - at least for consumer needs. Väänänen and Levaniemi were thinking that they would install the HappyOrNot feedback buttons throughout the store. But the supermarket wanted to start in the produce section, by asking a simple question, "How fresh is our produce?"

They had 13 stores. Within about three weeks, the majority of those stores started to pick up their HappyOrNot score. We were told, especially when the store managers were off duty, they were seeing lots of improvements.

Levaniemi told me the stores figured out, based on the customer feedback, that evenings were a time where customer unhappiness with produce peaked. Within four weeks, the stores could tie improved produce freshness directly to improved store sales in that category. Levaniemi:

It's a really simple use case, but it changed the behavior.

The many problems of instant customer feedback

Of course, that's a problematic use case that underscores my concerns. What if the avocados causing the bulk of the dissatisfaction? Yet in this scenario, there was no way for customers to register that. But - Levaniemi told me it did provide value to his customer, and that's the bottom line. He also points out this isn't a typical HappyOrNot use case. It's really more of an illustration of how they found early momentum.

For example, today, HappyOrNot offers their customers a Smiley Touch option - a follow-up question with up to nine survey options. That would solve my "your avocados are gross" objection. A customer could clearly indicate which produce was great - or not.

That changes the potential use case a lot. Levaniemi agrees, with this caveat: he is not willing to make the tool complex to achieve this.

We never want to compromise the convenience or ease of use. Even with Smiley Touch, customers only have two screens.

HappyOrNot isn't one of those annoying surveys where if you drop off, you lose the result. If you drop off after the first screen, the data is still captured. Levaniemi:

It's really useful. Companies find out things they don't know. It's very useful for store managers as well, who can take our data and make their case for adding more employees during peak hours, for example.

As Levaniemi told me, he sees store managers able to justify their staffing decisions, based on the improved feedback sentiment, and the impact of sales.

My take - customers aren't always right

I have three problems with HappyOrNot: an ideological problem, a practical problem, and a culture problem (not their culture, but the culture of companies who use performance metrics from feedback systems to pressure already-exploited employees).

My ideological problem is this: contrary to the lazy bromide, customers aren't always right. Modern consumers - and I absolutely include myself - are crybabies who complain too much, often with a profound lack of perspective, and a debilitating sense of entitlement that is degrading both to ourselves, and to the overworked employees trying to serve us. Ironically, what we're missing out is not better service at all. We're missing out on the shared moments of humanity that bind us. Busy customers and pressured employees rarely find such common ground.

Instant feedback systems like HappyOrNot tap into a very primal thing: our jugular, in-the-moment reaction. But: a customer doesn't always understand everything that's in play. Maybe our airline hassle was actually caused by an urgent safety issue we weren't aware of.

So often, we fail to realize all the ass-busting work behind the privileged moments we find imperfect. In other cases, our grievances are completely valid, but employees on the ground may not be the ones who deserve our ire - or the performance review dings.

On the practical side, customer unhappiness is a valuable tool, IF the feedback is properly received. To me, that requires a few things:

• Why the customer is unhappy
• Who the customer is (how important is the customer to you, and how profitable)
• How quickly you can respond (a creative, real-time response to dissatisfaction remains a massive competitive edge)

On "Who the customer is," that's not something HappyOrNot ever wants to touch. They want to keep their feedback anonymous. That's a core value I can respect. Smiley Touch helps to address the "Why," The third point, on real-time response, is something HappyOrNot is pursuing aggressively. They've been heading towards it for a while, via their increasingly-used mobile app. Perhaps there is a fourth consideration: patterns of customer discontent (or happiness), and exceptions to those patterns. That's obviously right in HappyOrNot's wheelhouse.

So did my interview with Levaniemi change my view on HappyOrNot? Yes, quite a bit. Obviously, they have deeper functionality that I haven't seen in use. That functionality addresses a number of my stated concerns - assuming the store opts to use it.

But to be honest, I was more swayed by Levaniemi's decency and thoughtfulness. Still, as I told him, "I think there is an education component and responsibility on your part." His response?

Absolutely.

For HappyOrNot, that includes formal onboarding programs, and service partners in multiple countries. Here's how I see it now: plug HappyOrNot into a good workplace culture, and I see no problems. But, as I told Levaniemi, if you plug this kind of power tool into a flawed KPI culture that pressures employees with negative feedback, I see big potential for abuse. His response:

If the staff hates this, they aren't going to change the behavior... The store should always get the data first; it should never be used against them.

But would HappyOrNot walk away from a customer that was insistent on misusing the platform? That's an interesting question I'd like to revisit. Levaniemi also points out: an employee has the ability to comment on customer feedback via HappyOrNot's collaboration platform. That would apply to my airport example. He hopes this type of employee response can help to make his customers "learning organizations."  

Levaniemi also believes that we need positive reinforcement tools that go beyond sales targets. Now, that's where I am with him 100 percent. What about employees who go above and beyond? I think of an airport employee I know who entertains people, singing while slinging at the register. He probably isn't selling more product, but he deserves reward for brightening days. Levaniemi and his team are thinking about that too.

I believe this is exciting, because it provides a way for retailers to apply an Uber-type feedback tool to reward standout employees, rather than hold all to the same wage or perks. Wage pressure on retailers is real. If they could reward employees who make customers smile and who solve their problems, that adds a whole different option beyond compensation for salespeople.

Levaniemi says the HappyOrNot customer panel at NRF had some really good stories on gamifying the store experience, incenting teams to outperform each other. For positive alerts, he told me about managers asking teams, "Hey guys, you are rocking, what are you doing over there?"

That requires a real-time feedback push. Just this week, HappyOrNot officially raised the stakes:  HappyOrNot announces its new Real-time Collaboration, enabling teams to act and communicate in immediate response to data. Via their release:

The first solution of its kind ever created, Real-time Collaboration allows for managers and employees in sectors ranging from retail to hospitality, facilities to stadia, to be alerted as soon as a potential issue arises (based on spikes in 'Smiley' data), such as long waiting times at airport security or unstocked shelves in a retailer. When the number of negative or positive responses from designated Smiley Terminal and Smiley Touch products exceeds a preset value, staff are sent automated push notifications through the HappyOrNot mobile reporting app.

As for the potential for companies with flawed cultures and punitive performance metrics to abuse tools like HappyOrNot, Levaniemi acknowledged:

It's an ongoing battle.

Utlimately, it's the company's accountability, not HappyOrNot's. We're living in a time where just about everything can be (over)measured. If your performance culture is broken, there are plenty of tools that can be misused towards that aim. Now that I've met up with them, I believe HappyOrNot truly has an opportunity to change how we think about - and reward - employees. And, I'd argue, they have a responsibility to push their product (and its usage) firmly in that direction. When employees are energized, the so-called "customer experience" gets a heck of a lot better - and so does the resulting feedback. Let's see how they do.