Examining the Demographics of Happiness

I read an interesting article this week by Adam Davidson in the New York Times called Money Changes Everything. It’s one of the growing number of articles raising the discussion about happiness. I’ve blogged a bit about happiness and decided to dive into our latest dataset of responses from 10,000 U.S. consumers and examine the demographics of happiness. Here’s what that analysis uncovered:

• 74.4% of U.S. consumers agree that they are typically happy
• Females are happier than males
• African-Americans are the most happy and Caucasians are the least
• People who live in the South are the most happy and those who live in the Northeast are the least
• Happiness increases with annual income, up to about $100,000. Additionally, consumers who make less than $25,000 are considerably less happy than other consumers.
• Consumers older than 65 are the most happy and those between 45 and 54 are the least

The bottom line: What can we do to raise all of these numbers?

Hilton, Westin, and Lexus Have the Happiest Customers

In my previous two posts, I examined the link between happiness and loyalty and exposed happiness levels by consumer segments. Now I want to look at which companies have the most (and least) happy people as customers. We did not ask if the people were happy with the company, just if they were happy in general. The companies probably have little influence on the overall happiness of their customers, but there is still a gap across companies.

I examined 249 companies that had at least 100 consumer responses and identified the average “net happiness” ratings for their customers. The “net happiness” is the percentage of people who agree that they are typically happy minus the percentage that disagee with that assessment. The overall “net happiness” for the U.S. is 66% (74% are happy and 8% are unhappy).

Here’s what we found:

• Hilton, Westin, Lexus, Alamo, Hertz, and Courtyard By Marriott have the happiest customers
• Medicaid, TracFone, Virgin Mobile, 21st Century and EarthLink have the least happy customers
• The “net happiness” scores range from 56% to 82%

My take: Since our previous analysis shows that wealthier people are more happy, we’d expect companies that serve wealthier consumers to have higher happiness ratings. So it’s no surprise that there are a number of upscale brands at the top and Medicaid at the bottom. But what does this mean for a company?

Since happy people are more loyal, the companies that attract happier customers will have a disproportionate advantage in building loyalty. Also, I would imagine that it will tend to be more pleasant to work as a front-line employee at companies that serve happier customers.

The bottom line: I’d rather work in the front-lines for Hilton and Westin than for Medicaid

Women And Wealthy Are Happiest

In the previous post, I showed the link between happiness and loyalty. Now it’s time to look at which consumers are the happiest. So let’s start by examining happiness across the entire U.S. population, where we find that 74% of people are typically happy.

But the level of happiness is quite different across consumer groups. To begin with, I examined the differences across age and gender. The data shows that women are happier than men in every age group except for the oldest Americans and that people 65 and older are the happiest.

Do you know the old saying that money can’t buy happiness? Well, it might be wrong. We examined the level of happiness based on age and income levels. It turns out that consumers with higher incomes are happier across all age groups. The largest income-happiness gap is with 55 to 64 year-olds. The oldest and youngest consumers have the smallest gap.

In my next post, I’ll examine which companies have the most (and least) happy people as customers.

The bottom line: Women, wealthy, and elderly are happiest people.

Happy People Are More Loyal Customers

I’ve been following the research on happiness for several years, because I think it has a strong link to customer experience. The theory is that happy people tend to be more loyal customers and more engaged employees.

So I took a look at our consumer data to see if there’s a quantifiable link to loyalty (look for the same type of analysis around employee engagement later this year). My analysis looked at the likelihood of consumers to recommend companies across 18 industries based on whether or not they agreed with the statement “I am typically happy.” Please note that we were not asking consumers if they were happy or unhappy with a company.

It turns out that happy people are more likely to recommend companies across all 18 industries. The largest gap between happy and unhappy recommenders is in rental cars, where happy people are more than twice as likely to recommend. Even the smallest gap, 11 percentage points for retailers and parcel delivery services, is still substantial.

In my next post, I’ll examine which consumers are happy.

The bottom line: Happy people are more loyal customers