Emotions. We all have them but we don’t always like to talk about them. Nevermind admit to them playing any kind of role in our decision-making process. We are rational beings after all.
Over the past few decades breakthroughs in academic investigation has pushed forward our understanding of emotions and their function in decision-making. The renowned neuroscientist Antonio Damasio developed his ‘somatic markers hypothesis’, where the feeling (emotion) attached to a memory is elicited during decision-making and influences the outcome. Amos Tversky and Daniel Kahneman, who won the 2002 Noble Memorial Prize in Economic Sciences for the work, put forward two ways that we think: Intuition (System 1) and Reasoning (System 2). Intuition thinking is fast, automatic, emotional and takes place on a subconscious level while Reasoning thinking is slow, logical, requires effort and takes place consciously. Amos and Kahneman argue that most of our decisions are intuitive (and therefore based on emotion).
This new understanding of how people approach decision-making has substantial implications for marketers and it’s no surprise that Marc Gobé ‘s 2001 book “Emotional Branding” quickly became a seminal text. Gobé put forward a new business model that works to engage and inspire people, offering the ’10 Commandments of Emotional Branding’ to help brands move from traditional concepts of branding to emotional ones that help customers connect with them.
Newly released research by Forrester Consulting, commissioned by FocusVision, proved that the way customers think and feel about an experience can predict how they will act toward a brand. Further, how a customer feels about the brand, their emotional connection with the brand, has a 1.5x greater impact on driving positive business outcomes than what they think. In short, emotions drive business results.
This may not be surprising to you. Certainly in the decades since the new thinking on emotions’ role in decision-making emerged, there’s widespread acceptance around its importance. This is apparent in the same Forrester study, commissioned by FocusVision, where 93% of companies agree that consumers are more likely to spend money with a brand that they feel connected to. Additionally, 88% agree that better understandings of how their customers think and feel will help them win new customers.
However, despite the recognition about the role of emotion, and the need to understand their customers in order to engage them in ways that will resonate, only 38% strongly agree they know why one customer chooses to buy from their brand while another doesn’t.
There’s clearly a disconnect.
And one that is explained when looking at the data that companies are using to understand their customers: more than half (56%) report relying more or fully on Big Data (versus Small Data) to answer questions about how their customers think and feel. Big Data – clickstream, transactional, POS, CRM, location and so on – is an important way to understand what your customers are doing. But it can’t tell you why they are doing it. It can’t convey how they think and feel.
Not knowing why your customer acts the way they do leaves opportunity on the table. Understanding Customer Truth helps you create positive experiences across all brand touch-points, and can create predictability in business outcomes. Who doesn’t want to know how their business will perform in the future?
As a researcher and one that leans more towards qualitative approaches, the need to get close to your customer is an inherent belief. Understanding their likes, dislikes, routines, habits, beliefs, values and all the other contextual information around how, where and why they are using your product or service, provides essential information to drive your brand forward. The Forrester study confirmed that belief, highlighting that Small Data isn’t just nice to have, it’s essential when it comes to winning over your customers’ hearts and minds and delivering experiences that don’t just keep them coming back, but also make them advocates for your brand.
Download a copy of the full Forrester Consulting study, commissioned by FocusVision: “How Customers Think, Feel and Act: The Paradigm of Business Outcomes”