Empathy Economy Promises More Meaning For Customers

Pedro Pereira

In stark contrast to the archetypal hard-nosed, ruthless, go-getter philosophy historically prescribed for success at work, empathy is the new currency for progress.

In recent years there has been constant evolution in the world of consumer marketing and the concept of buying and selling. The focus has transitioned from a push strategy, where organizations create products and then market and promote them to get people to buy; to a pull strategy, where the idea is to motivate and draw customers to seek out a product willingly.

Today, the new breed of business is hinged on relevance and purpose—for customers, for companies themselves, for the world and community at large; and for the company’s purpose in the larger scheme of things. And this has led to a very interesting concept of the empathy economy. It is an economy that is human-centric, and values empathy, placing it at the core of all activities and business. It is an ethos that drives the pull strategy, by truly understanding and adapting to the needs of the customer.

Improving people’s lives is the key engine of an empathy economy

While growing competition in the marketplace has pushed quality levels higher and prices lower, digitization simultaneously has grown to become a big equalizer of marketing platforms. It’s become nearly impossible these days for companies to survive on the tenets of price and performance alone.

So, what we need today is the overarching need to produce value by engaging customers and creating personalized experiences for them. However, the dilemma sits right at the core of doing business – our approach and mentality to the concept of buying and selling.

By putting ourselves in the customers’ shoes, we are able to deliver a heightened level of personalization and relevance to them.

As someone who has professionally been involved in transformation, what am I really alluding to? My point is this: As technologists, we need to adopt an empathy mindset towards customers and guide design thinking across an organization.

But how is an empathetic strategy different from personalization? Empathy strategy is more about a major shift in the mindset, focused on close learning from customers. Personalization on the other hand, is focused on selling more to customers.

The key point is that companies need to think exponentially to solve the big challenges for the larger community, and to do this, a pure capitalist model cannot work. An empathy economy balances such a “buy & sell” model with a focus on caring about improving peoples’ lives.

Technology bridges people, empathy and meaningful experiences

If you think of personalization today, organizations look at it as purely multichannel transactions. However, now there is a shift towards customer experiences and building relationships. That’s where empathy dovetails customer experience.

While one end of this spectrum is the need to “inspire to recommend,” which targets the commercial and transactional aspects of the customer relationship. On the other end is “inspire to create meaning,” which translates into an empathy ethos for an organization, aimed at creating life with meaning and freedom as its end goals. But this leads us to the obvious question: In this whole empathy discussion, how do digitization and technology fit in?

Everything starts with connecting people. And digital transformation is the tool to connect and establish a uniform view of relationships. Since people are aggregating and converging on digital platforms, so too is the heart of the customer relationship. And at the top of this value chain is the digital core.

What makes a company empathetic?

From the digital core as a starting point, we need to be able to sense across the board what customers are doing and what they need. After that, moving onto the next level is using technology and applications to create meaningful experiences.

To achieve this, we need to consider five elements:

  • Understand
  • Inspire
  • Fulfill
  • Trust
  • Freedom

Let me superimpose these empathetic considerations into a basic technology framework. For example, to understand manifests itself via supercomputing, which gives you an unprecedented ability to use data. Never have people been better understood by technology than they are now.

Inspire, on the other hand, is relevant for machine learning because personal relationships are simulated and one can understand how to inspire the customer by learning from information that customers themselves share with you. Can you inspire or surprise them?

Similarly, hyperconnectivity enables fulfillment, the platform economy creates meaning, while blockchain and smart contracts represent trust.

For all these elements to be in place, we need to find an integrating application to service customers and tie in with the overarching objective of helping them lead a meaningful life.

Reimagining customer relationships

Every customer relationship starts with inspiration, which is the comfort that someone knows you well enough. However, without fulfillment, customers get very frustrated. This is where hyperconnectivity steps in to enable true fulfillment.

A classic example: Harley Davidson decided to gather community information to create personalized bikes for its customers. But customization as an afterthought can cause significant delays in delivery to customers.

The innovation came in the form of using hyperconnectivity of its supply chain, which managed to help the company reduce production time from 21 days to 6 hours. By using advanced digital technologies that connected systems on the shop floor, Harley was able to manufacture customized products at the efficiency of mass production to give customers what they want, when they want it, while streamlining the supply chain.

These automated production lines made it possible to quickly change configurations to adapt to the needs of specific customers and build approximately 1,700 bike variations on one production line and ship a customized bike approximately every 90 seconds.

Thus, this became a simple and meaningful relationship for customers, despite the complexities involved in integrating this experience. What Harley really did was to show care through personalization, by capturing that “high” of differentiation customers experience when they purchase a customized Harley.

By reimagining their traditional view of customers and acknowledging the emotion of the purchase, Harley-Davidson managed to reinvent their brand.

Going full-circle

To go full-circle in the customer relationship value chain, following fulfillment comes last-mile delivery. And the platform economy is a great enabler of this. Look at how things have evolved as a result.

A global leader in travel accessories found that their customers were expecting same-day delivery. To meet this need, the company cleverly integrated its delivery services with Uber RUSH, thereby ensuring delivery expectations. Turning the concept on its head, the store became the warehouse and Uber became the last-mile connectivity supplier.

This is what one can call a clever leverage of resources, because it makes life and the experience more meaningful to customers who are always on the move. By taking the pain of delivery out of the way for themselves, the company also cut waiting time for the customer.

In the empathy economy, we also need “empathy trainers” – because we need to add the human emotion of compassion to teach the AI-driven systems we are gravitating towards. A good example of this is Kemoko, Inc.’s Koko Services, a machine-learning system that teaches systems to be more sympathetic. Other examples include Apple’s Siri, Amazon’s Alexa, and Cobot, SAP’s conversational chat bot that is currently working on integrating emotional capabilities.

Empathy works from the inside out

If you’re talking about platform economies, the conversation is incomplete without a discussion on trust. The world around us is preparing to become more ethical. Because all of this finally dovetails into ethics and privacy for the customer, blockchain offers a perfect solution.

Empathetic enterprises preserve and refine their intuition and lead with empathy, despite the deluge of Big Data that seeks to quantify human relationships. An empathy economy thus traverses the fundamental chasm that exists between natural human behavior – which can often be sentimental and equally unpredictable – and the design of organizations, which is rational, results-oriented, and consistent.

The empathy economy is not just about customers. It is about pursuing an ideal. By connecting all these stakeholders in a meaningful experience, digitization and automation can inspire everyone to aspire to a higher ideal. An empathetic business caters not only to actual human needs but also aspires to the greater purpose of improving the human condition.

For more on this topic, see For Digital Transformation, Enterprise DevApp Efforts Need Feelings.

Pedro Pereira

About Pedro Pereira

Pedro S. Pereira is Head of Digital Innovation for Middle East and North Africa at SAP.