Study: The science between emotions and communications – Algorithms don’t feel, people do.
Given the enormous opportunity to create new value, companies should pursue emotional connections as a science—and a strategy. However, for most, building these connections is more guesswork than science. They have little idea of what works and whether their efforts have produced the desired results.
When companies connect with customers’ emotions, the payoff can be huge. Consider these examples: After a major bank introduced a credit card for Millennials that was designed to inspire emotional connection, use among the segment increased by 70% and new account growth rose by 40%. Within a year of launching products and messaging to maximize emotional connection, a leading household cleaner turned market share losses into double-digit growth. Moreover, when a nationwide apparel retailer reoriented its merchandising and customer experience to its most emotionally connected customer segments, same-store sales growth accelerated more than threefold. Given the enormous opportunity to create new value, companies should pursue emotional connections as a science—and a strategy. However, for most, building these connections is more guesswork than science. They have little idea of what works and whether their efforts have produced the desired results.
The 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.” They provide a better gauge of customers’ future value to a firm than any other metric, including brand awareness and customer satisfaction. They can be an important new source of growth and profitability.
At the most basic level, any company can begin a structured process of learning about its customers’ emotional motivators and conducting experiments to leverage them, later scaling up. At the other end of the spectrum, firms can invest in in-depth research and big data analytics or engage consultancies with specific expertise. Companies in financial services, retail, health care, and technology are now using a detailed understanding of emotional connection to attract and retain the most valuable customers. The most sophisticated firms are making emotional connection part of a broad strategy that involves every function in the value chain, from product development and marketing to sales and service.
High-Impact Motivators – Hundreds of “emotional motivators” drive consumer behavior. Below are ten that significantly affect customer value across all categories studied.
Defining Emotional Motivators – Our research stemmed from our frustration that companies we worked with knew customers’ emotions were important but couldn’t figure out a consistent way to define them, connect with them, and link them to results. We soon discovered that there was no standard lexicon of emotions. So eight years ago, we set out to create one, working with experts and surveying anthropological and social science research. We ultimately assembled a list of more than 300 emotional motivators. We consider customers to be emotionally connected with a brand when it aligns with their motivations and helps them fulfill deep, often unconscious, desires. Important emotional motivators include desires to “stand out from the crowd,” “have confidence in the future,” and “enjoy a sense of well-being,” to name just a few.
Identifying and measuring emotional motivators is complicated, because customers themselves may not even be aware of them. These sentiments are typically different from what customers say are the reasons they make brand choices and from the terms they use to describe their emotional responses to particular brands. What’s more, as we’ll discuss, emotional connections with products are neither uniform nor constant; they vary by industry, brand, touch-point, and the customer’s position in the decision journey.
Why Emotional Connections Matter – Although brands may be liked or trusted, most fail to align themselves with the emotions that drive their customers’ most profitable behaviors. Some brands by nature have an easier time making such connections, but a company doesn’t have to be born with the emotional DNA of Disney or Apple to succeed. Even a cleaning product or canned food can forge powerful connections.
The process, in brief, looks like this: Applying big data analytics to detailed customer data sets, we first identify the emotional motivators for a category’s most valuable customers. High-value automobile customers, for example, might want to “feel a sense of belonging” and “feel a sense of freedom.”
Next, we use statistical modeling to look at many customers and brands, comparing survey results about people’s emotional motivators with their purchase behavior and identifying buying spikes associated with specific motivators. This reveals which motivators generate the most-profitable customer behaviors in the category. We then quantify the current and potential value of motivators for a given brand and help identify strategies to leverage them.
The model also allows us to compare the value of making strong emotional connections with scoring well on standard customer metrics such as satisfaction and brand differentiation, thus highlighting the potential gains from looking beyond traditional measures. We find that customers become more valuable at each step of a predictable “emotional connection pathway” as they transition from (1) being unconnected to (2) being highly satisfied to (3) perceiving brand differentiation to (4) being fully connected.
Although customers exhibit increasing connection at each step, their value increases dramatically when they reach the fourth step: Fully connected customers are 52% more valuable, on average, than those who are just highly satisfied. Their relative value is striking across various metrics, such as purchases and frequency of use.
The pathway is an essential guide to where companies should invest—and it reveals that they often spend in the wrong places. Many companies focus on turning dissatisfied customers into satisfied ones to increase revenue and market share. However, our analysis shows that moving customers from highly satisfied to fully connected can have three times the return of moving them from unconnected to highly satisfied. Moreover, the highest yields have come from focusing on customers who are already fully connected to the category—from maximizing their value and attracting more of them to your brand.
Four insights from research are especially relevant to firms looking to build on emotional connection.
Emotional motivators vary by category and brand. Of the 300-plus motivators we’ve identified, 25 significantly affect customer value across all the categories analyzed. Anywhere from five to 15, additional motivators are essential in any given group. For example, the sense that a home furnishings store “helps me be creative” inspires consumers to shop there more often. The wish to “feel revived and refreshed” drives loyalty to fast-food restaurants. Emotional motivators also vary within categories, depending on the desires of brands’ most valuable customers. Because brands differ in how well they align with their customers’ motivators, each may have a different starting point to strengthen emotional connections—and that point won’t necessarily relate to conventional measures of brand perception.
Emotional motivators vary across customer segments. Recall the credit card designed with Millennials in mind. Our model uncovered desires to “protect the environment” and “be the person I want to be” as key motivators in the banking category for that age group. (Traditional industry motivators such as desires to “feel secure” and to “succeed in life” are more typical of older groups.) The bank crafted messaging and featured to connect to those sentiments, leading to its fastest-growing new credit card.
Emotional motivators for a given brand or industry vary with a person’s position in the customer journey. In banking, the desire to “feel secure” is a critical motivator when attracting and retaining customers early on. When cross-selling products later, the wish to “succeed in life” becomes more critical. To maximize results, companies must align their emotional-connection strategies with their specific customer-engagement objectives—acquisition, retention, cross-selling, and so on.
Emotional-connection-driven growth opportunities exist across the customer experience, not just in traditional brand positioning and advertising. For example, social media can significantly impact emotional connection. One condiment brand found that 60% of its social-network-affiliated customers (especially followers on Facebook, Twitter, and Pinterest)—versus 21% of all customers—were emotionally connected. It accelerated growth in months by increasing its focus on its social media network, developing its online customer community, and pointing customers to the website for recipes and promotions.
Putting Emotional Connections to Work
Let’s look at how an emotional-connection strategy paid off for a national fashion retailer. The company was struggling with common industry challenges. Although it had a well-known brand and a strong market presence, same-store sales stagnated, and promotional pricing was shrinking margins. So it focused on cost management, logistical efficiency, and streamlining the merchandise and store mix—with limited success. Over the past two years, we worked with the retailer on a four-part strategy to identify, understand, and quantify the value of the most emotionally connected customers. This exposed substantial, unexploited opportunities and allowed the retailer to better direct investments.
1. Target-connected customers – We set out to answer two fundamental questions: How valuable were the retailer’s fully connected customers, and could the company attract more of them? We used statistical techniques to measure the strength of customers’ emotional connections with the retailer and its competitors. The process began with surveys to discern how consumers related to significant motivators in the category and with analysis to see which motivators best predicted purchase behavior. We then modeled the financial impact of building emotional connections with customers at each step from unconnected to fully connected.
Analysis showed that although fully connected customers constituted just 22% of customers in the category, they accounted for 37% of revenue, and spent, on average, twice as much annually ($400) as highly satisfied customers. Enhancing emotional connection could be a viable growth strategy if the retailer could attract fully connected customers from competitors, transform satisfied customers into fully connected ones, or both.
Further segmentation revealed a group of especially valuable customers. We labeled them Fashion Flourishers because apparel connects to their sincere desire for excitement, social acceptance, and self-expression. As a group, Flourishers are the most emotionally connected segment; half are already fully connected to the category. Comparing the ratios of various emotion-based segments’ spending to those segments’ size highlights remarkable differences in value: Flourishers have a ratio of 1.9—nearly twice the market average and more than nine times that of the least-connected group (whom we called Can’t Please Them, and whose ratio is just 0.2). Given the relatively fixed cost structure of retailing, acquiring and retaining Flourishers represented an opportunity to boost revenue and margins.
A detailed profile of Flourishers underscored their attractiveness and exposed ways for the retailer to target them. Customers in this segment:
Have a high lifetime value, spending an average of $468 a year in the category versus $235 for other customers.
Shop more often and advocate more: Fully 46% of Flourishers shop key fashion categories at least monthly, versus 21% of all shoppers. Flourishers are 1.4 times as likely as other customers to recommend retailers to their friends and family members.
Are less price-sensitive: They are 2.3 times as likely as other customers to say they are “willing to pay more for the best fashion products,” 1.7 times less likely to make fashion purchase decisions solely based on price, and 1.3 times less likely to shop for the lowest prices.
Are predominantly female and younger, more ethnically diverse, and more likely to live in urban centers than other customers.
Are more digitally engaged than other segments: They are 2.3 times as likely to research a fashion retailer online, 2.9 times as likely to shop for fashion products through their mobile devices, and 3.7 times as likely to follow a retailer on social media.