The Business Value of Customer Empathy

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The Business Value of Customer Empathy

Posted by steve.perry on Feb 19, 2016 2:11:26 PM

 

 An Expedition Into Empathy

The Expeditioners

You may not have heard of ThyssenKrupp, but you very likely use their products and services every day in getting to work and getting back home. The multinational conglomerate consists of 670 companies worldwide. They are one of the world’s largest steel producers, and their technology division manufactures automotive technologies, elevator systems, marine systems, plant and factory technologies, and also provides ship-building services. 

If you are aware of TyssenKrupp, it may be because you recently read about ThyssenKrupp’s partnership with Microsoft to create the MAX system of cloud-connected, machine-learning elevators that deliver smarter lift experiences for elevator passengers. MAX improves lift availability, trafficking, and reliability by using the IoT (Internet of Things) to schedule elevator traffic, and predict maintenance issues.

The MAX system is lauded as a major technology enhancement, but it is also a major step forward in customer empathy. The creators of the system specifically intended to reduce the friction and time required for millions of us who spend so much of our lives waiting for and riding elevators during our daily urban transportation.

This move towards customer-centricity and customer empathy is a hot topic on the minds of ThyssenKrupp leadership.

 

 The Expedition

To deepen their customer-centricity efforts, ThysennKrupp engaged WDHB Strategic Learning, a unique executive learning firm that crafts bespoke “Learning Expeditions” for major brands across the globe. Their stellar client list includes Google, Siemens, Airbus, and Peugeot-Citroën, to name just a few. 

During a learning expedition, executives from WDHB client companies travel to several stops, visiting the most leading-edge and forward-thinking consulting firms, agencies, startups, and market leaders.

At each stop, they learn new techniques, concepts, and strategies, experience emerging technologies and trends, and gain new knowledge that can help propel continued success. In WDHB's own words, learning expeditions “allow executive teams to immerse themselves into unfamiliar environments and to explore business innovation, resulting in new approaches and strategic development.” 

So when WDHB asked Macquarium to be one of the stops on their November 2015 "Customer-Centricity" Learning Expedition for executives from ThyssenKrupp, we were honored and delighted to share our expertise. 

WDHB requested that we speak to ThyssenKrupp on the subjects of customer-centricity and customer empathy, and that we craft a customer empathy workshop exercise. 

Leveraging empathy, design, and technology to improve customer experiences are concepts we have advocated for many years at Macquarium, and we happily offered to:

  • Explain the Value of Customer Empathy
  • Illustrate Key Techniques for Gaining Customer Empathy 
  • Immerse ThyssenKrupp Executives in an Empathy-Generating Exercise
  • Show How Empathy-based Techniques Are Applied in Practice

 

The Value of Customer Empathy

Empathy Equals Emotion

As we explained to our guest expeditioners, empathy is gaining ground in being understood as a valuable driver of customer loyalty. Empathy is simply the ability to understand and share the emotions of another. Customer empathy means understanding customers’ emotional journeys as they do business with you.

The importance of understanding customer emotions in relationship to how they feel about your brand is critical. Forrester did a study on the subject and found that emotion is the number one driver of customer loyalty, beating out any cognitive or logical factors in how customers feel about you.

Tapping into this emotional understanding of consumers has now become an important part of many companies’ plans. Facebook’s addition of mobile “Reaction” emoji buttons are designed specifically to help capture emotional context in-the-moment, and are being hailed as a major opportunity for brands to gain a better understanding of customer emotions in real-time.

 

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 Facebook's Mobile "Reaction" Emojis

 

Emotion Drives Revenue

The reason for all of this attention on emotion as the source of loyalty is because even the slightest improvement in positive emotions towards your company brand creates the sense of having a better customer experience (CX), which in turn has a powerful impact on top- and bottom-line returns.

Studies everywhere are now showing that ROI on "hard-to-measure" soft improvements in CX have a concrete value. Another Forrester study shows that a mere 1% improvement in customer satisfaction with their experience can translate into an additional $175M annually in some industries. A similar Temkin Group study found that over three years a modest improvement in CX can earn companies up to $824M. The link between well-crafted customer experiences and company revenue can no longer be denied as abstract.

 

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 From the Temkin Group's ROI of Customer Experience, 2015  Report

 

Gaining Customer Empathy 

With the links between emotion, loyalty, and revenue understood, many companies are scrambling to figure out how to bring customer empathy into their business equation. As we explained to ThyssenKrupp, some excellent methods for fostering customer empathy in an organization are customer personas, customer journey maps, and empathy maps.

 

Creating Empathy With Customer Personas

You might think you already have customer personas if you are working with traditional market-segment customer profiles based on demographic information. But these do not capture the emotional attitudes and deeper characteristics of customer needs and behaviors. In the CX / UX world, personas are used to capture a much more refined understanding of customer types that cut across demographics and market behaviors. Two personas may have the same demographic characteristics, yet have completely different behaviors and emotional experiences. Personas help to create empathy for the needs and attitudes of different customer types even within a single segment.

 

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  A Variety of Customer Personas Within a Single B2B Customer Segment

 

Creating Empathy With Customer Journey Maps

Customer journey maps are also excellent tools for empathizing with customer needs, motivations, and emotions. Customer journey maps follow your customer personas as they interact with your brand, illustrating the journey they take with you step-by-step.

Because they capture the emotional context of each and every customer interaction, journey maps are invaluable in understanding and empathizing with both prospects and customers.

The two varieties of customer journey maps that we shared with ThyssenKrupp are varieties we often utilize with our clients at Macquarium: Current state and future state customer journey maps.

 

Learning from Empathy: Current State Customer Journey Maps 

Current state maps are fact-based portrayals of what customers are going through when doing business with you right now. They identify all of the pleasant and painful interactions that customers experience. Understanding the current state reveals your opportunities for improvement, as well your opportunities to go above and beyond and delight your customers. 

Current state customer journey maps focus heavily on the emotional understanding of customer personas at a given point in time when interacting with your company. They can be shared across the organization to infuse empathy with customer outcomes as they stand right now.

This kind of organizational empathy is critical to creating better customer experiences. When you understand the root causes of problems in the customer journey and how they impact customer loyalty, you can actually fix them. This may mean incremental improvements in a particular pain point, or it may mean redesigning the entire customer journey. Current state maps show customers expectations, thoughts, actions, and emotions, as they go through the journey you have created for them right now.

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  Current State Customer Journey Map Showing the Emotional Ups and Downs of a Single Customer Service Interation

 

Designing from Empathy: Future State Journey Maps and Service Blueprints

Future state customer journey maps portray the intentional redesign of a step in the customer journey or the entire customer journey itself. Future state maps are created by cross-functional teams within the organization to innovate and visualize an ideal state of being for the customer experience. These can be entirely digital experiences or digital and physical experiences (for example: online ordering and checkout / digtial and physical onboarding / digital and physical product setup / call- and contact-center customer care / in-store and digital engagement). 

Future state customer journey maps may come in the form of service blueprints. Service blueprints show the future state customer journey, and also identify all of the front-stage and back-stage actions that employees must undertake in order to make the new journey a reality. This means they must also identify and show all of the company processes and systems needed to support employees and customers in creating this new experience.

Future state customer journey maps represent one of the highest states of customer empathy in an organization. They portray what an intentionally designed experience could be, and how the company must reorganize around empathy for the customer.

 

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  Future State Service Blueprint Showing the Mechanics of Creating a New Customer Journey

 

Leveraging Empathy: The Intentionaly Designed Customer Journey

The effects of an intentionally designed, empathetic, and highly personalized customer experience can have immense value for both customers and companies alike. A recent article by McKinsey in the Harvard Business Review shows this play out in real-life, as illustrated by the exemplary customer journey designed by solar energy firm, Sungevity.

One author of the article is McKinsey analyst, David C. Edelman, who became an evangelical customer once immersed in Sungevity’s exceptional customer experience. In the article, he marvels that his customer journey was so personal and so tailored to his needs and emotions, that it immediately won him over as a customer, and has completely redefined the customer loyalty loop for Sungevity. 

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  Sungevity's Streamlined Loyalty Loop Creates an Emotional Bond Throughout the  Buyer/Customer Journey 

 

As an analyst, he recognized this as a revolutionary step forward in customer empathy and intentionally designed customer experiences that other businesses should learn from. He discovered that as a result of this new customer journey, Sungevity doubled their sales in 2015 to over $65M, far exceeding their growth targets. By empathizing with customer needs, exceeding customer expectations, and crafting a highly personalized customer experience, Sungevity has streamlined their customer path-to-purchase. Prospects no longer engage in extended consideration cycles, but happily immerse themselves in the experience, becoming loyal customers from the very start.

As manufacturers themselves, the example of customer empathy from Sungevity was exciting for our ThyssenKrupp engineering guests. We created a brief but immersive empathy mapping exercise to help their engineers develop an understanding of how to empathize with customers.

 

Creating Empathy With Empathy Maps

Empathy maps have been utilized for some time to introduce taking the mindset of another person and modeling with what they may be thinking, feeling, saying, and doing. While not a fully detailed persona, an empathy map is a good first step at empathizing with what your prospect or customer is experiencing.

An empathy mapping exercise takes a customer persona and places them in a real-life situation, often an extreme one to heighten the sense of emotion. Participants are then asked to walk in the persona's shoes for a moment, think and feel as they do, and write in the details of the experience from their viewpoint on a large printed empathy map canvas. There are several variations of empathy map canvases and printable templates can easily be found online.

 

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  Example Blank Empathy Map Canvas

 

For our guests, we crafted a light customer persona experiencing a realistic scenario. In this scenario, she is a customer of one of their major competitors, but is experiencing problems with her order for a large and important construction project with an upcoming deadline. Her order is not going be met on time, and she is now considering alternative vendors. This scenario presents an opportunity to win her business and loyalty – if they can empathize with her needs and emotions during a difficult situation.

With the persona and scenario in mind, we had the group form small teams of 2-3 to collaborate on what she was going through, to think and feel like her, and to write those experiences in on the blank empathy map to complete it. Each team deliberated, asked many questions, and were very engaged in thinking outside themselves and trying to think like their potential new customer. 

Afterwards, we asked our guests to outline their results for their empathy maps and how they felt the exercise contributed to their understanding of empathy. The ThyssenKrupp leadership team did very well in expressing the actions, thoughts, and emotions of our proposed persona. As each work group shared their outcomes, themes began to emerge in how they could identify with and cater to the specific needs of this customer prospect. 

 

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  A Completed Empathy Map Canvas Captures What Our Persona is Thinking, Feeling, and Doing 

 

When asked how they felt about the exercise, many of them commented how different, and how valuable it was for them to learn to think this way. As engineers, empathy was not typically the lens from which they engaged a situation. Learning how to see it from the customer’s viewpoint and empathize with her emotions helped the ThyssenKrupp leadership team to imagine more innovative actions and methods they might not have otherwise considered. They now had a deeper understanding of how empathy can help them on their quest to be more customer-centric. 

 

A Practical Path to Customer Empathy 

After the empathy mapping exercise, we presented a real-world example of creating customer empathy, using details from a recent project with one of our clients, who are also large global manufacturers.

Befitting ThyssenKrupp, this case study outlines the business challenges, activities, and outcomes of mapping the B2B customer buyer's journey from order to delivery, following customer actions and emotions throughout the supply chain. We showed how to put customer-centric methods into practice using personas and current state customer journey maps to empathize with customer issues, needs, and emotions, and to communicate this empathy across the organization.

We also showed how we helped our client apply this newfound empathy using future state journey mapping to create an intentionally well-designed new customer experience. 

Their path from gaining empathy to implementing customer-centric solutions involved several key steps:

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  High-Level  Example of One Company's Path to Empathy and Customer-Centricity

 

A key takeaway of this case study for our guests was that organizations do not have to fundamentally change overall operations in order to become more customer-centric. They simply have to change their point-of-view.

As a Six-Sigma organization, this client had pursued customer-centric efforts for many years using Six-Sigma quality improvement techniques. The difference was that Macquarium helped them make these efforts about customer empathy, not organizational processes. By starting with this outside-in point of view, they could better understand where their customer experience was flawed and why.

 

Empathy is Valuable and Achievable

Our guests learned not only that customer empathy has real value to their organization, but also how they can achieve it.

They have embraced empathy as a driver of business value, and have since taken steps to increase their emotional awareness of their customers and to empathize with customer experiences more deeply. 

They are on their way to becoming a more customer-centric organization. We wish them well on their journey and look forward to helping them along the way.

To learn more about how you can gain the value of customer empathy, please contact us.