Worlds largest database part 1

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World’s Largest Emotion Database: Part 1Steven WaldenSenior Head of Research and Consulting Beyond Philosophy


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The Beyond Philosophy Perspective

Customer Experience is all we do!

Thought leadership is our differentiator

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New Fourth book Is now available

Focus on the emotional side of Customer Experience

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Experience Value is Emotional Value

4Ps rationalunderstanding

Sub-conscious& Emotional

understanding

Customer Satisfaction

Emotional Signature

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The Evidence from Marketing Experiments

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The principle of precedence: consumers attach greater importance to functionality (over hedonics) up to the point at which a "required" level of functionality is met.

The "principle of hedonic dominance“: after a required level of functionality is met, hedonic aspects drive consumer choice.

o a consumer shopping for a cell phone with at least an eight-hour battery life will choose an option that offers this level of battery life over ones that do not, even if this option is much worse looking than the alternatives. However, after the required level of functionality is met, consumers shift focus almost entirely to the hedonic aspects. Thus, if all available cell phones exceeded the eight-hour battery limit, the phone that looks best will be chosen, regardless of the differences among the options in terms of battery life.

Source: Form versus Function: how the intensities of specific emotions evoked in functional versus hedonic trade-offs mediate product preferences


The Evidence from Neuroscience


Patients with damage to certain regions of the frontal lobe suffer from an inability to appreciate negative outcomes. Though they can reason logically, their decision-making ability is flawed.

They have lost emotional reactivity at a high level; they can no longer sense, for instance, embarrassment or guilt or pride or shame. They have lost their ability to feel emotion relative to the future consequences of their actions and thus are no longer able to qualify their choices as "potentially good" or "potentially bad."

Professor Antonio Damasio

When making decisions in the future, physiological signals (or ‘somatic markers’) and evoked emotions are consciously or unconsciously associated with their past outcomes and bias decision-making towards certain behaviors. When a somatic marker associated with a positive outcome is perceived, the person may feel happy and motivate the individual to pursue that behavior. When a somatic marker associated with the negative outcome is perceived, the person may feel sad and act as an internal alarm to warn the individual to avoid a course of action. These situation-specific somatic states based on, and reinforced by, past experiences help to guide behavior in favor of more advantageous choices and therefore are adaptive

In contrast to economic theory, the somatic marker hypothesis proposes that emotions play a critical role in our ability to make fast, rational decisions in complex and uncertain situations.

Decision-making is devoid of emotions and involves logical reasoning based on costs-benefit calculations

Assumes that individuals have unlimited time, knowledge and information processing power and can therefore make perfect decisions.


‘Somatic Marker’ Marketing

Firms tend to see their experience as a detailed painting

Customer tend to see their experience as an impression



The Urgency of Measurement



Four Clusters of Emotions Drive or Destroy Value

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The 2 years of baseline research produced the framework against which we will compare your experience. The baseline model identified 20 emotions clustered into 4 hidden factors and that drive/ destroy value for business.

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The DNA of customer experience: how emotions drive value

“The case for focusing on emotionas a philosophy for building a betterexperience for customers as presented in the book is a compellingone.

The methodology for undertaking the necessary emotional analysisis practical, simple, potentially veryeffective, and enables organizations tobenchmark themselves by sector and'best practice'.

International Journal of Market Research Vol. 53 Issue 1, Peter Mouncey, Editor

Independent, Peer Reviewed Endorsement from the leading Journal for Market Research

Endorsement from Research Industry Magazine

http://www.research-live.com/magazine/why-we-must-measure-emotion/4003434.article


Scale development with Professor Voss of London Business School, Professor Raymond (Chair of Experimental Consumer Psychology at University of Wales) and Dr Miles (ex- York University) now Quantitative Psychologist and RAND corporation

Endorsement from the Market Research Industry


The 2 years of baseline research and subsequent 3+ years of client work has resulted in the world’s largest fit-for-business emotional database

The Emotional Signature® system has been independently corroborated and validated

It looks not just at the Past

But perspectives on the future

The Worlds Largest Database of EmotionsEmotional Signature® Database (N=25,000)

Benchmarking


EMOTION DATABASEThe Findings



Emotion Exercise


How would your typical customer feel towards your organization


The Emotional Database


N= 25,000 New Overall Business Index


Advocacy: Happy, Pleased Reduce


Reduction in Advocacy

2005 to 2011



Recommendation: Safe, Focused Reduce


Some reduction in Recommendation

2005 to 2011



Attention: No Change Except Pampered Reduces


Same levels of Attention

2005 to 2011



Negatives: Significant Reductions


2005 to 2011

Reduction in Negatives



The Failure of Perspective



Internal Bias Towards Controlling Losses



Avoid The Cost of a Negative Experience


Case Study:Enterprise with 2 million customersRevenue = $200,000,000 per year Average Revenue per customer = $100 per year

At risk — 55%Decline in wallet

share

Defect — 45%

Poor experience22%

Positiveexperience

78%

Complain2%

Do notcomplain

98%

At risk — 34%Issue not resolved

Defect — 28%

Resolved — 38%440,000customers

431,200customers

2,464 customers$246,400

194,040 customers$19,404,000

2,992 customers$299,200

237,160 customers$23,716,000

8,800customers

Sources: Cherry Tree Research, Bain & Co., McKinsey, Harvard Business Review and Gartner

Sources: Cherry Tree Research, Bain & Co., McKinsey, Harvard Business Review and Gartner


But Leave the Blight of the Bland

From the American Customer Satisfaction Index

Looks good except when you look at the scale!



Experience Psychology

Frederickson (1998) suggests that positive emotions ‘broaden the cognitive and behavioral repertoire, signifying new possibilities’, while negative emotions are more action specific e.g., fear leads to flight, anger to fight. Needless to say for the business manager the positive emotion set represents the best point of competitive differentiation in a marketplace focused on controlling the negative emotions: in particular, happy and pleased which relates to the concept of achieving advocacy or total satisfaction with an experience encounter



Rational 4Ps Trade-Offs No Longer Work


I see the experience

Loyalty Emotions = CLV

I feel wowed by the experience

That feeling embeds in my memory

I want to return

As expected, little different from your competitors = Rational Satisfaction and declining ROI

Price

Product

Promotion

Place


LoveMark your Experience

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Brands are running out of juice". Love is what is needed to rescue brands. Roberts asks, "What builds Loyalty that goes Beyond Reason? What makes a truly great love stand out?”Kevin Roberts, CEO Saatchi and Saatchi


http://en.wikipedia.org/wiki/File:Lovemarks_Book.jpg


TV ad: http://www.youtube.com/watch?v=M0mXUC0cUPg

http://www.youtube.com/watch?v=M0mXUC0cUPg


Reasons for the Change

The increasing transactional focus of companies on controlling the negatives in an experience by, for instance, reacting to customer complaints has led to a decline in negatives. With most competitors focused on this end of the emotional experience, the positive emotions have been largely neglected.

The increasing use of Six Sigma, Lean and other BPR initiatives has led to an increased focus of control on the negative emotional experience. This has been to the detriment of value-adding positive emotional experiences.

The recession has led to a cut-back in initiatives that focused on positive emotional experiences.

The meaning of a positive emotional experience has changed under conditions of hyper-competition. That is to say that to score highly on a word like happy requires an increased effort over and above what has happened before to match changed expectations. For this to have been the effect, firms efforts would have been minimal over the last few years to evoke a positive emotional reaction from clients and consumers.



Managerial Implications

The positive emotion set represents the best point of competitive differentiation in a marketplace focused on controlling the negative emotions: in particular, happy and pleased which relates to the concept of achieving advocacy or total satisfaction with an experience encounter.

1. MEASURE THE EMOTIONS

2. MAP THE EXPERIENCE

3. CREATE POSITIVE EMOTIONAL PULL



Questions or ideas?Contact

Thank You

Steven WaldenSenior Head of Research and Consulting

Email: [email protected]

Tel USA: +1 678-638-3050

Tel UK: +44 158-263-5007

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