How can emotional insight improve customer relationships?
How do emotions influence decision-making and how can a better understanding of customer emotions help brands improve customer experiences?
There is certainly some truth behind the suggestion that the customer experience is the competitive battleground for today's businesses. But the area where the war will be won may actually sit a layer deeper - within the field of emotion.
Peter Dorrington, founder of XMplify Consulting, explains: "The advent of digital, and especially mobile, has contributed to the fact that many goods and services are now considered 'commodities' - purchased as and when needed.
"All the possible providers look the same - they are delivering good products, and delivering them well; but that's just what consumers have come to expect."
Even if your product is technically differentiated, things like comparison websites tend to boil them down to what they have in common with everybody else and not how they’re different.
That doesn’t mean there aren’t disruptors. But these tend to disrupt the delivery mechanism rather than the fundamental product or service – Uber, for instance, is a mini cab service with a good app’ it’s quick and convenient and easy to use but still ultimately about getting from A to B.
So, when your product or service is no longer the differentiator - what's left? The answer is the relationship you have with your customers. And it is both the foundation and objective of great customer experience.
The challenge here, as noted by Dorrington, is that experiences are evaluated on how we perceive them. In other words: 'Beauty is in the eye of the beholder'.
“It’s not what you do but how it is perceived and interpreted by the person going through the experience,” he explains. “And when we get into the world of perception and the way in which it influences decisions, that is really dependent on emotions.”
How do emotions influence decision-making?
Work in the field of behavioural economics has demonstrated just how dependent on emotions we are for decision-making - even very big decisions, where we think we are acting 'rationally'.
The famous neuroscientist Antonio Damasio, for instance, reported a patient who had suffered an accident robbing him of the ability to feel emotions. Without the tiny emotional prompts nudging him in one direction, the man simply could not choose between similar options.
Dorrington explains: “A lot of people have recognised that if customer experience is the new competitive battleground, not only does it have to be good, but it has to be unique and valued by the person experiencing it – and therefore you have to address the emotions.”
If organisations had a method of estimating how each customer feels about them, it could help in every operational decision you make, insists Dorrington.
If customer experience is the new competitive battleground, it has to be unique and valued by the person experiencing it – and therefore you have to address the emotions.
At the highest level of abstraction, it could support the design of more efficient and effective customer experiences at the strategic level - putting the 'relationship' back into customer relationship management and relationships are founded on feelings.
If a business could understand within customer journeys how customers generally feel at different stages - what might be motivating them, what might influence their decisions – then generally it would be able design a better experience.
But what if organisations could make it relevant to one-to-one relationships with customers? This is the operationalising piece that is particularly tricky, because regressional analysis on emotion doesn’t work, according to Dorrington. But if it could be cracked, the potential is enormous.
How can emotional insight improve customer relationships?
One example of how this insight could be used would be in the arena of receptiveness. An organisation could convert the emotions into understanding whether a customer would be receptive to hearing from it. This would therefore influence whether they are marketed to, what is marketed to them and how it is done.
Dorrington says: “I might think that a customer was a great candidate for upselling from the gold card to the platinum card as she meets all the criteria. But just before we send the messaging, we do a check to see if she’s receptive and it becomes clear she is not – perhaps there has been a transactional issue, or there may be more of an emotional zeitgeist thing where banks are getting hammered in the press.
Not only should we consider emotions in the operational aspects of our business, we need to think about the role they play in the product of service itself.
“Therefore, it may be decided that the message won’t be sent, and she is instead put in a different campaign, designed to heal the relationship. So it can influence the timing, the nature and the mechanism of marketing or sales.”
There are also implications for deciding what the next best offer / action should be. Dorrington explains: “It may be that I was going to sell you product A, but based on your functional needs and your emotional needs we have determined that product B will be a better fit, and the one that is going to make you feel closest to the way that you want to feel.”
Elsewhere, there are also implications for the way that inbound interactions are handled. For instance, an organisation may be able to anticipate that the customer will call and that if she calls she will be upset, so the company can put her through to a senior handler who is better at dealing those kinds of conversations.
The use of emotional insights could also extend into the world of bots and AI, enabling organisations to choose which script to use and which tone of voice to adopt.
And the evidence shows that people will pay a premium to those organisations that they believe will make them feel the way that they want to expect to feel.
Dorrington continues: “Not only should we consider emotions in the operational aspects of our business, we need to think about the role they play in the product of service itself: as well as considering the functional needs of the customer, think about their (changing) emotional needs as well; it affects everything they do and research shows that customers will pay a premium to organisations they think will meet their emotional needs better. And our own research shows that customers are more loyal towards companies that meet their emotional needs.”
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Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.