Worlds Largest Emotion Database: Part 1 - CX Consulting · 2016-04-22 · Worlds Largest Emotion...

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World’s Largest Emotion

Database: Part 1Steven Walden

Senior Head of Research and Consulting

Beyond Philosophy


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Beyond Philosophy © All rights reserved. 2001-2011 2

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The Beyond Philosophy Perspective

Customer Experience

is all we do!

Thought leadership is

our differentiator

Offices in London,

Atlanta with Partners in

Europe & Asia

New Fourth book

Is now available

Focus on the emotional side of

Customer Experience

Links with Academia

www.beyondphilosophy.com 4

We are Proud to Have Helped Some Great Organizations…

Beyond Philosophy © All rights reserved. 2001-2011


Experience Value is Emotional Value

4Ps rational

understanding

Sub-conscious

& Emotional

understanding

Customer

Satisfaction

Emotional

Signature

Beyond Philosophy © All rights reserved. 2001-2011 5


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

10

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 emotion

as a philosophy for building a better

experience for customers as

presented in the book is a compelling

one.

The methodology for undertaking the

necessary emotional analysis

is practical, simple, potentially very

effective, and enables organizations to

benchmark 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 DATABASE

The 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

NegativesN= 25,000 New Overall Business Index


The Failure of Perspective



Internal Bias Towards Controlling Losses



Avoid The Cost of a Negative Experience


Case Study:

Enterprise with 2 million customers

Revenue = $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


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

26

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 Walden

Senior Head of Research and Consulting

Email: [email protected]

Tel USA: +1 678-638-3050

Tel UK: +44 158-263-5007

Worlds Largest Emotion Database: Part 1 - CX Consulting · 2016-04-22 · Worlds Largest Emotion...

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Transcript of Worlds Largest Emotion Database: Part 1 - CX Consulting · 2016-04-22 · Worlds Largest Emotion...