No matter what business you are in, the point of a business is almost universally to fulfil a market need or want and to have satisfied customers. You could be making widgets or coffee, providing banking, accounting, engineering, media, advisory, or cleaning services, selling books or any myriad number of other businesses. It doesn’t matter, because at the end of the day customers are what it is all about.
And in this digitised world of disruption and changing customer experiences it is easy to think the key to long-term success is the efficient provision and fulfilment of customers' needs and desires.
But that is only part of the answer according to Stefan Thomke, a professor of business administration at Harvard Business School. In a report in MIT's Sloane Management Review, Thomke said that his view started to change when lecturing on "the development of principles that can be applied to the design of great customer experiences." He said he started to hear something that was outside of the conventionally accepted wisdom in academia and business: emotion.
Thomke says he started to hear stories of great customer experience which were emotive. He says he was surprised by the language used by his executive students because it wasn't "the standard language of business". Rather than use terms like functional value, efficiency, and cost-value analysis, his students instead described the emotional impact.
The result was a changed emphasis on what he believes makes a truly great customer experience. Thomke said emotion is the missing ingredient. And this led him to a critical insight.
"Customers want their choices to align as much with their feelings and senses as with their values and ethics," he wrote. "The rational approaches taught at most business schools — offer customers more value for money, add features, make service more efficient — are not enough. Creating memorable experiences for customers also requires a bit of emotional magic."
In a world with the Amazon approach of customer centricity through product pricing, range, and speed of delivery, it is easy to forget that many customers want to have a connection to the businesses they deal with and buy from.
Citing a report from Gallup, Thomke said, "organisations that optimise emotional connections outperform rivals by 26% in terms of gross margin and 85% in terms of sales growth". By working with emotionally-engaged customers, he said, they are able to cultivate these buyers as less price sensitive, more sticky, repeat shoppers, and more likely to recommend a companies services.
Interestingly, Thomke said that when companies focus on the consistency of customer service they may actually harm their prospects in regard to building this connection because "reducing variability can eliminate terrible and great experiences".
"While eliminating bad experiences may reduce complaints, result in fewer angry customers, and trim costs, the unanticipated consequence of moving most customers to the middle of distributions is that it will also result in consistent mediocrity. They will have undifferentiated, average experiences, which will leave them with few, if any, memories," he said.
And his counterintuitive entreaty for companies is to embrace this variability while putting in place structures that will allow terrible experiences, which may "spawn negative emotions", to become an opportunity.
Building the emotional connection
Thomke suggested a 4 step plan in order to build this connection with customers and calls on businesses to remember they need to focus on the whole journey because people "may remember emotions generated anywhere along the way".
- Stimulating the senses will trigger emotions such as surprise, trust, joy and even anticipation, Thomke said. Don't create sensory overload though – that's trying too hard. Rather, he said, use an Apple style approach and allow sensory appeal to give way to simplicity.
- Turning disappointment into delight is a must if you are going to allow the kind of variability in experience that will build the emotional connection. It's a challenge for companies wanting to lock down variability and deliver great customer service and it needs a management culture that empowers staff to be ready "to transform negative experiences into positives".
Thomke said magicians understand this and the "emotional value of rapid shifts from disappointment and confusion to happy resolution. They have developed techniques to change people’s emotional states".
- The way to do this in a business context is to plan to surprise, Thomke said. And to do that companies need to work to "thrill customers again and again through continual innovation and unexpected solutions to problems". This, in turn, will allow your business to build "a loyal, delighted following", he said.
Business owners and managers need to pay "attention to the smallest detail". This can be through design, service delivery, or building cultural capability into your staff.
- Stories matter if we are talking about emotions and, Thomke said, companies that build a strong emotional connection with their customers tell compelling stories.
He said that "for most of our existence, oral narratives have been a primary means of learning, socializing, and transmitting knowledge, so we are conditioned to understand, remember, and tell stories". As a result, it is companies, businesses and managers that infuse these stories "into the customer’s brand experience", which will in turn "provoke an emotional response and create sticky memories".
The point of all this is to build a connection with customers and clients. No matter what your business, that's a powerful way to keep them engaged with your offering and to help create customers who are as sticky in this current environment of constant change, business disruption, and economic slowdown.
Success isn't guaranteed, but stickier customers can help make businesses more profitable and sustainable over the long term.