Some pointers that I've got are:
High-Impact Motivators - Hundreds of “emotional motivators” drive consumer behavior. Below are 10 that significantly affect customer value across all categories studied.
1. Stand out from the crowd - Project a unique social identity; be seen as special
2. Have confidence in the future - Perceive the future as better than the past; have a positive mental picture of what's to come
3. Enjoy a sense of well-being - Feel that life measures up to expectations and that balance has been achieved; seek a stress-free state without conflicts or threats
4. Feel a sense of freedom- Act independently, without obligations or restrictions
5. Feel a sense of thrill- Experience visceral, overwhelming pleasure and excitement; participate in exciting, fun events
6. Feel a sense of belonging- Have an affiliation with people they relate to or aspire to be like; feel part of a group
7. Protect the environment- Sustain the belief that the environment is sacred; take action to improve their surroundings
8. Be the person I want to be- Fulfill a desire for ongoing self-improvement; live up to their ideal self-image
9. Feel secure- Believe that what they have today will be there tomorrow; pursue goals and dreams without worry
10. Succeed in life- Feel that they lead meaningful lives; find worth that goes beyond financial or socioeconomic measures
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 a 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 a large number of customers and brands, comparing survey results about people’s emotional motivators with their purchase behavior and identifying spikes in buying that are 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 that of 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. In fact, their relative value is striking across a variety of metrics, such as purchases and frequency of use.
The pathway is an important guide to where companies should invest—and it reveals that they often invest in the wrong places. To increase revenue and market share, many companies focus on turning dissatisfied customers into satisfied ones. 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. And the highest returns we’ve seen 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 our research are especially relevant to firms looking to build on emotional connection.
1. Emotional motivators vary by category and brand.
Of the 300-plus motivators we’ve identified, 25 significantly affect customer value across all the categories we’ve analyzed. Anywhere from five to 15 additional motivators are important in any given category. 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 in any effort to strengthen emotional connections—and that point won’t necessarily relate to conventional measures of brand perception.
2. 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 features to connect to those sentiments, leading to its fastest-growing new credit card.
3. 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 important. To maximize results, companies must align their emotional-connection strategies with their specific customer-engagement objectives—acquisition, retention, cross-selling, and so on.
4. Emotional-connection-driven growth opportunities exist across the customer experience, not just in traditional brand positioning and advertising.
For example, social media can have a big impact on emotional connection. One condiments 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 a matter of 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 were stagnating, 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 large, unexploited opportunities and allowed the retailer to better direct investments across the firm.
A. Target connected customers.
We set out to answer two basic 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 with its competitors. The process began with surveys to discern how consumers related to key 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 on the pathway from unconnected to fully connected.
Our analysis showed that although fully connected customers constituted just 22% of customers in the category, they accounted for 37% of revenue and they 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 deep desire for excitement, social acceptance, and self-expression. As a group, Flourishers are the most emotionally connected segment by far; half are already fully connected to the category. Comparing the ratios of various emotion-based segments’ spending to those segments’ size highlights extraordinary 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.
B. Quantify key motivators.
Next, by analyzing tens of thousands of Flourishers across the category, we quantified the impact of more than 40 motivators on the group’s purchasing, spending, loyalty, and advocacy. We identified the most important category motivators—the ones that bore the strongest relationship to purchases—and assessed the retailer’s competitive position in each. The financial analysis and modeling showed that further investments to strengthen the customer experience around the desires to “feel a sense of belonging,” “feel a sense of thrill,” and “feel a sense of freedom”—the motivators driving category purchase behavior and for which the retailer already had the strongest position—were likely to yield the highest ROI. Those motivators therefore became the focus of specific customer-experience investments.
C. Optimize investments across functions.
To maximize opportunities from emotional connection, companies must look beyond the marketing department. The retailer examined every function and customer touchpoint to find ways to enhance high-ROI emotional motivators. This brought four major investment areas into focus: stores, online and omnichannel experiences, merchandising, and message targeting.
D. Systematize, measure, and learn.
Leveraging emotional connection does not require turning your business processes upside down; you can embed relevant strategies into existing work streams. This is most effectively done by making emotional connection a key performance indicator and including it on the cross-functional senior-management dashboard.
The retailer developed a scorecard that gives the CEO and the executive team a single-page view of customers’ progression on the emotional-connection pathway, along with the increase or decrease in connected customers of the company and its key competitors. The scorecard shows the correlation of customers’ emotional-connection scores with lifetime value measures such as annual spending, churn, and tenure. It also shows how the business impacts of specific emotions are trending and how Flourishers engage with key in-store and omnichannel touchpoints that drive emotional connection. In addition, the retailer includes emotional-connection metrics in its ongoing testing of media messages, store designs, and digital and mobile experiences.
Getting Started
Identifying and leveraging customers’ emotional motivators can be broken into three phases.
First, inventory your existing market research and customer insight data. You will probably find qualitative descriptions of your customers’ motivating emotions, such as what aspects of life they value most (family, community, freedom, security) and what they aspire to day-to-day and in the future. From there, pursue research to add detail to your understanding of those emotions. Define a set of emotional motivators to probe—the list in the exhibit “High-Impact Motivators” will provide ideas, as will your qualitative research. Online surveys can help you quantify the relevance of individual motivators. Are your customers more driven by life in the moment or by future goals? Do they place greater value on social acceptance or on individuality? Don’t assume you know what motivates customers just because you know who they are. Young parents may be motivated by a desire to provide security for their families—or by an urge to escape and have some fun (you will probably find both types in your customer base). And don’t undermine your understanding of customers’ emotions by focusing on how people feel about your brand or how they say it makes them feel. You need to understand their underlying motivations separate from your brand.
Second, analyze your best customers—those who buy and advocate the most, are the least price-sensitive, and are the most loyal. To do this, identify those who are highly satisfied with your brand—whatever the degree of their emotional connection—and divide them into quartiles according to annual purchases, advocacy, and so on. Examine the top quartile to see how the characteristics and behavior of your best customers differ from those of people in the other quartiles. Look at demographics, whether people buy in person or online, how much they buy from your competitors, and where they get their information about your brand (traditional media, social networks, and so on). Compare the emotional motivators of your best customers with the ones you’ve researched for your overall customer base and see which are specific or more important to the high-value group. Find the two or three of these key motivators that have a strong association with your brand. They will serve as an initial guide to the emotions you need to connect with in order to grow the most valuable customer segment of your business and to the marketing strategies and customer experience tactics that will provide the greatest connection opportunities.
Third, make the organization’s commitment to emotional connection a key lever for growth. Use the language of emotional connection when you talk about your customers—not just in the marketing department but across the firm. In our experience, successful strategies based on emotional connection require buy-in from the top and must be embraced across functions. For example, if people in product development are working on a version that’s easier to use, they shouldn’t just ask whether customers will be satisfied with it; they should learn which emotional motivators it resonates with and how it will strengthen emotional connections.
Yours,
Something Small Thinking Big
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