How can leaders start using empathy as strategic driver for competitive advantage? The tool: dedicated customer personas.
It’s true, customer empathy can be used as strategic instrument to build a clear competitive advantage. Henry Ford once said that “if there is any one secret of success, it lies in the ability to get the other person’s point of view and see things from that person’s angle as well as from your own.”
This mental ability to imagine oneself in the situation of another is much more than a soft skill. The ability to reflect from the perspective of our target audience enables us to understand their behavior and motivation. Moreover, it ultimately allows us to design more delightful and meaningful products and services for the customer. Investing in empathy significantly improves the bottom line. Thus, empathy is in stronger demand from corporate leaders than ever before.
Empathy as competitive advantage
Building empathy is not only a bottom-up approach, as it affects companies’ culture, processes, and strategy design. It should be initiated and continually reflected with the leadership team. The SAP Center for Digital Leadership uses personas as a helpful tool to apply empathy and customer-centricity in a strategic decision-making process. Personas represent the goals, behaviors, and challenges our target audience is facing, and they help us consistently share and absorb customer insights in a relatable and tangible way.
Unlike market segmentation, personas come to life through profiles with names, photographs, and individual characteristics making it easier to envision yourself in others’ shoes. Through their explicit and compact nature, personas facilitate strategic decision making and enable us to focus on delivering what is most valuable and relevant to our audience. At their highest impact, personas provide customer focus across all customer touchpoints within the company, break down business silos, and help build the foundation for a holistic customer experience.
Using personas to define new product and service opportunities
Provisional personas designed on the company’s understanding of its customers help the leadership team shape and illustrate a common understanding of customers’ needs.
Using lean customer research to validate assumptions made during persona design helps generate evidence about the accuracy of the defined needs. These insights will sharpen the personas and enable ideation of potential opportunities that address the identified customers’ needs.
Assessing the outcome in three dimensions and highlighting it in a matrix helps a company focus on the most promising opportunities:
- Desirability: How well will the solution fill the persona’s needs? Will it delight them?
- Viability: How well does it align with the business’ vision? How big might the return on investment be?
- Feasibility: Can we make it happen? How long will it take to implement?
Rapid prototypes of the most promising opportunities help validate the value proposition to customers and ensure the team is on the right track. Those opportunities that prove value can be designed and tested with customers in iterations and, over time, establish a vital customer-centric product and service portfolio
To unleash the power of empathy as strategic driver for corporate positioning and competitive advantage, leaders must act as role models and jointly initiate the process. Provisional personas are a hands-on starting point enabling companies to quickly set a common, empathetic focus. They can be used to define customer-centric business opportunities and foster strategic decision making. They enable constant synchronization, validation, and alignment of customer needs throughout the company in a relatable and tangible form.
Without validation, the designed personas and identified opportunities are just assumptions. It is essential to synchronize the business assumptions with the real world to ensure the right path forward. By doing so, businesses start taking the first step towards the creation of a holistic, end-to-end customer experience that delights the customer and stands out.
For more on creating empathy in your business, see 5 Steps to Your Customer’s Heart with Emotionally Aware Computing.