An article published in the Harvard Business Review (HBR) recently, citing fresh research, attempts to initiate a renewed debate on the importance of customer emotions in a marketing ecosystem.
It calls for enterprises to pursue emotional connections as a science and a strategy.
Co-authored by Scott Magids and Alan Zorfas of consumer intelligence firm Motista, and Daniel Leemon of CEB, a best-practice insights and technology company, the article states that it is possible to measure and rigorously target the feelings and emotions that drive a customer’s behavior strategically.
The authors write, “Our research across hundreds of brands in dozens of categories shows that it’s possible to rigorously measure and strategically target the feelings that drive customers’ behavior.
We call them 'emotional motivators.”
The trio says such emotional motivators provide a better gauge of customers’ future value to a firm than any other metric, including emotional branding awareness and customer satisfaction, and can be an important new source of growth and profitability.
Emotional Intelligence
Emotional connections, emotional intelligence, and emotional quotient —call it what you may —are not a new concept.
It’s been around as a hypothesis since the early 1990s, if not earlier.
It is to be found in the best-selling 1995 book, ‘Emotional Intelligence’ by an internationally renowned psychiatrist and author, Daniel Goleman, so as in the ‘Goleman Principles’, both of which are famous and an inspiration for leadership courses (‘Emotional Intelligence’ was named one of the 25 “Most Influential Business Management Books” by TIME Magazine).
To put it rather simply, emotional connection is the skill of empathizing with fellow beings, creating an overall positive experience.
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Today, with the advent of new technologies, including the ability to measure and analyze vast amounts of data using computers, more and more businesses are actively exploring EQ as a new tool to attract new customers, increase loyalty, and gain market share.
It is indeed a fact, as emphasized in the HBR paper, that until now, most B2B or B2C companies have been getting along by simply “guessing” their clients’ emotional needs, but slowly, surely, this is changing.
What are your customers’ needs is what this science aims for, which is obviously also different from the cold, analytical world of big data.
Humans are big on emotions; we all know that. But occasionally, brands forget that. Brands can gain a competitive edge over others by using emotion-based segmentation.
When a positive emotional connection with a customer is forged, a majority of the customers are more likely to stay loyal to the brand and spend more.
What is needed for this is for your company to adapt its personalization and engagement strategies.
Emotional motivators serve as effective triggers for consumer action and reaction.
Generally, there are four types of segmentation levels: demographic, behavioral, psychographic, and motivational.
The most commonly used is demographic segmentation, wherein customers are grouped together based on attributes such as gender, age, income, etc. But for emotion-based customer segmentation, psychographic segmentation is the key market segmentation.
What is Psychographic Segmentation?
Under psychographic segmentation, you break down your customers into groups based on their beliefs, values, and all the psychological aspects that influence their purchase behavior, such as lifestyle and social status.
The basic idea here is to understand who your customers are as individuals, not just as buyers. It is mainly conducted based on “how” people think and “what” they aspire for their life to be.
You can categorize your customers into distinct units based on characteristics such as personality, values, beliefs, lifestyle, attitudes, interests, and social class.
This, along with other forms of segmentation, will enable you to market to them more effectively. Understand ‘why’ your customers think the way they do. Additionally, why are they choosing to purchase from your company?
For psychographic marketing to work, the following factors must be taken into consideration:
- Why do your customers act the way they do?
- What do they value the most?
- How will you address their pain points?
There are five psychographic variables based on which you can club customers:
- Personality
- Lifestyle
- Social Status
- Belief
- Viewpoint
For all of this, marketers need to collect psychographic data. The latter is subjective data, compared to, say, demographics, and thus requires a detailed investigation.
Do You Operate An Emotionally Intelligent Business?
The answer to that, to some extent, lies in the big data analytics model you may have deployed.
If you can’t find it there, or have not, so far, deployed a statistical model to analyze your customers, there are two ways to turn your business into an emotionally intelligent one.
The first approach could be to implement a model that involves constructing a “complete view” of the customer experience, from start to finish – encompassing product development, marketing, sales, and service, as well as all the emotions a customer associates with that experience.
That could lay the groundwork for a high Emotional Intelligence (EQ).
At the other end of the scale, enterprises can invest in big data analytics or bring in outside consultants with a deep understanding of how to measure a customer’s Emotional Intelligence (EQ).
For both, the business needs to collect customer feedback at all stages of its buying journey.
This includes not only formal surveys but also inputs from online reviews, call center feedback, and feedback on social media, all of which can capture the various stages of a customer’s sentiments.
Walmart is a classic (and well-known) example of how emotional intelligence (EQ) can help pull in more customers or anticipate their needs.
The global chain has two different teams that work in tandem – one to improve employee IQ, the other to improve customer EQ.
However, one does not need to be a Walmart to undertake this exercise. Any company, at a very basic level, can initiate and implement a structured process to learn about its customers’ emotional motivators.
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Understanding a client’s EQ will especially help companies in financial services, retail, and technology to create a detailed picture of their customers, enabling them to retain the valued ones.
To give an example of the role a customer’s emotional intelligence (EQ) plays in his/her buying decision: It helps a car retailer to understand the purpose of a potential customer wanting to buy a car.
Is it for speed or utilitarian purposes? Will the car be a public statement for the buyer? Or is it just another buy for the spouse who needs it for her shopping?
All these sentiments, when captured, tagged, and analyzed, will enable marketers to create targeted messages tailored to individual groups of potential customers, aligned with their needs.
Conclusion
Emotion-based customer segmentation offers a powerful and insightful approach for businesses to understand and connect with their customers on a deeper level.
By proactively addressing negative emotions and resolving customer issues, businesses can enhance the overall customer experience and build a positive brand reputation. By considering the emotions and sentiments behind customer behaviors, companies can gain a comprehensive understanding of their customer base and tailor their marketing efforts accordingly.