Customer empathy(opens in new tab), while one of the latest hot topics in industry, is often misunderstood and under-addressed in winner-takes-all corporate environments. My hope is that the reset imposed by COVID-19 will drive companies to take a new look at how they think about their customers.
Just what is customer empathy? In its simplest form, it is a deep understanding of the needs and feelings of the people who buy your goods and services. But it goes far beyond knowing and tackling their basic requirements. Done right, an empathetic POV puts your value to the customer in context because you’re actually looking at yourself from the customer’s perspective.
Empathetic sales leaders engage customers with a process that takes into consideration the risks and rewards of buying a complex product or service. In product development, customer empathy guides developers to make features that not only help someone accomplish a “job to be done” but also fits well into the customer’s overall workflow, belief system and lifestyle.
An empathetic point of view leads to products that are a joy to use.
An empathetic organization sees customers not as numbers on a sales scorecard or lines on a balance sheet but as whole people, or in the case of B2B, teams of people working together toward a common goal. When you look at it that way, you get a broader perspective on how your products fit into the wider scope of their lives, their jobs and their communities.
Tempted to roll your eyes and write customer empathy off as “woke culture” or “virtue signaling”? Go ahead and click on something else. I’ll wait. But while you’re at it, think about the products and companies you love and why you can’t do without them. Could be someone’s actually thought hard about the needs of customers like you.
For the rest of you, a variety of studies show(opens in new tab) that empathic companies outperform their peers in plenty of areas. Yet I often see misaligned financial goals based on the wrong-headed idea that customer empathy will negatively impact the bottom line. As an example, think about a customer who buys a product that no longer serves her needs. Let’s take an extreme instance for this one.
A bride buys a wedding gown only to have her intended call off the ceremony a week before the event — long after the dress has been customized and altered and therefore with minimal resale value.
An empathetic shop owner would understand that the gown, which was a symbol of happiness and love, now connotes hurt and disappointment. She would take the dress back, provide a full refund and perhaps even send flowers to the bride expressing thanks for her loyalty and sympathy over the cancelation.
The cost of that empathetic gesture is quite high if considered in the light of this one transaction — after all, the bride is not returning a product and getting a replacement. She’s actually unlikely to buy another product for some time. This complete loss of revenue may strike a CFO or financially conservative leader as wasteful; after all, the dress was customized. However, a smart leader understands that the cost of taking the gown back will be far outweighed by the negative publicity and bad brand emotion that would come from not helping a customer in a time of need.
By taking the dress back, the shop is likely to experience a positive return in the form of word-of-mouth advertising among the bride’s attendants, friends and family. If the average wedding has 200 guests, of which 100 are from the bride’s “side,” imagine the goodwill that comes from that story being passed along.
Let’s take another example in B2B software development. When dev teams understand that a product isn’t used in a vacuum, it helps them sort out the interdependencies and external factors that impact the user experience. It also helps them understand that different buyers have different motivations for using a product or service and different definitions of success. While the job at hand is important, there are many factors beyond that basic task that play into a customer’s overall satisfaction with a product — starting with the complexity of the buying process and extending through long-term support.
Customers want to feel valued, understood and engaged in their buying journeys. An empathetic product team takes this into account. They solicit and pay attention to customer feedback and translate complaints into functional improvements.
Remember, when people care enough to grouse about your product, that means they are invested(opens in new tab).
Suppress your employees’ natural empathy as you develop product, marketing and sales plans at your peril. Realize that decisions are not the result of rational thought alone. There are always influencers, emotions and previous experiences just under the surface that sway a customer’s choice. Not taking those into account is a mistake.
Once teams allow themselves empathy, they begin to anticipate market demand because they relate to customers as human beings, not “end users.” They embed themselves in the customer experience, which leads to them caring that their solution truly meets and exceeds the customer’s needs.
While again there is an expense to this approach, this customer lens leads to growth, revenue — and most critically, loyalty.
Let’s talk about that customer loyalty equation for a moment. There is, of course, a point where customer empathy can turn into an overly expensive, time-consuming and money-losing proposition. This generally happens when your customer is too far from the ideal client profile for your firm and your products. They demand more and more for less and less, often mistreating your staff and creating obstacles to a healthy relationship, much less a healthy profit margin. An empathetic organization understands that this client would be better off somewhere else, with a firm that better meets its needs and a relationship that would be positive.
Develop a process to tactfully and professionally “off board” such clients. You’re not “firing” the customer. You’re helping find a better fit by providing recommendations, turning over documents and offering advice, devoting as much attention as you did when onboarding. In this way, you maintain the culture of your organization while still taking a firm stance with the problem client.
Remember, people move around and take their impressions of vendors with them. And who knows, maybe in five years there will be growth or change such that the client is now ideal for your services.
Even a moderate increase in customer experience generates an average revenue increase of $823 million over three years for a company with $1 billion in annual revenues, says the Temkin Group.(opens in new tab)
Finally, and often most challenging, is focusing on customer empathy in product development. A product or service that works well on paper or in the lab but that in real life is difficult to use, time-consuming to learn and frustrating to get help for can lead to high churn rates as well as low customer satisfaction or net promoter scores. To tackle that, create focus groups and have developers spend time with clients. Familiarity breeds empathy.
Fail to understand customer needs, and you’ll miss out on key insights that might lead to improvements or even market-altering new features. Listening closely breeds success: This is a lesson we can all learn from software companies that embrace a product-led growth strategy. Not truly listening to customers means you’ll miss launching new features, improving your user interfaces and spotting product-line extensions. That’s a gift to competitors.
Bottom line, freeing your team to bring their empathy to work is good for them and your bottom line.
Janet Schijns is the CEO of JS Group and a former C-Suite Fortune 500 executive with experience ranging from Verizon to Motorola to Office Depot. Her clients regularly increase their revenues by more than 40 percent and achieve high levels of market-share growth. Areas of expertise include routes to market, channel programs and solution development, and she has worked with vendors, distributors and partners in a wide range of technology areas including services, cloud and advanced solutions. Got questions? Please contact her at firstname.lastname@example.org.