Article

Why empathy has moved from buzzword to business necessity

By Erin Hueffner

Published July 31, 2020
Last updated November 9, 2020

It used to be that brands were built on strength. If your product was better or cheaper than the competition, your business would succeed. But things have changed. In today’s interconnected world, we are inundated with choices, which is both paralyzing and exhilarating. You can spend several hours online comparing any single item, as I did recently while shopping for roller skates. With so much choice, brands have to work harder to earn our loyalty.

Besides product reviews or competitive pricing, consumers are also quick to boycott brands that don’t align with their values and will intentionally buy from brands that support causes they believe in. Consumers expect companies to stand for something, deliver outstanding experiences, and anticipate customer needs. And that was before COVID-19 hit and turned our collective world upside down. What the pandemic has made extra clear, as businesses serve customers who have lost employment, or are balancing work and homeschooling, or are grappling with anxiety, is that connecting with your customers on a human level is more important now than ever before.

More and more, it’s the customer experience that sets a brand apart. According to IDC, 73 percent of customers say a differentiated experience is what it takes to keep them loyal, not just an acceptable one. Now the key to loyalty isn’t just built on price or high quality product, it’s based on great customer experiences. This shift means big brands need to deliver highly personalized service, and they need to do it at scale for millions of customers, every single time. And loyalty begins with customer empathy.

Consumers expect companies to stand for something, deliver outstanding experiences, and anticipate customer needs.

We talked to Alan Webber, Program Vice President for Digital Strategy and Customer Experience at IDC about how to put empathy at the center of your customer experience and why it matters.

Put customers at the center of your orbit

A true measure of customer empathy is putting the customer first in everything. And at a time when many retailers are struggling, Zappos is growing their business by creating real, human connections with their customers.

Empathy has always been at the center of Zappos, which has long been known for its customer-first ethos. Every employee takes customer service calls as part of their onboarding process, even at the executive level, to ensure they start building empathy from the very beginning. After getting lots of customer requests for single shoes, or mixed-size pairs, the company launched the Zappos Adaptive Single Shoe & Different Size Shoe Test program in July of 2020. It’s an effort to cater to shoppers who have prosthetics or naturally have different-sized feet. And if a customer buys a single shoe, they won’t pay the full price of shipping—it costs exactly half the price of the pair to ship a single shoe.

According to IDC, 73 percent of customers say a differentiated experience is what it takes to keep them loyal, not just an acceptable one.

Or, in another example, Webber pointed to a time when his son lost a pin at Disney World and a cast member turned what could have been a bad experience around. Webber’s son was ten years old at the time and had saved up his money to buy this trading pin from Disney. But somewhere between rides he lost it, so the family started searching the grounds. This caught the attention of a Disney cast member, who asked if they needed help. Next thing you know, his son had a voucher for a new pin. “It was amazing,” said Webber. “He was upset, but now he talks about that as a great experience. That’s what empathy looks like.”

[Related read: Leading with empathy: What you don’t say is just as important as what you do]

Customer data provides contextual clues

Empathy in business is about being able to understand the context around what a person is most likely feeling, before coming up with the right response. The way a doctor would respond to a patient having a heart attack, for example, is much different than the way they’d respond to someone who comes in with an earache. Both are healthcare experiences, but the context is different, so the doctor’s response is different. The same idea applies in business. You need to have the right data to build meaningful context into a customer experience. “Data is the foundation of empathy,” said Webber. “And empathy is absolutely the differentiator of tomorrow.”

Having customer data is one thing. But to truly understand customers and see things from their perspective, you need to dive deep into analytics to glean insights. And that takes an investment in technology. According to IDC, companies will spend an estimated $553 billion on technology in 2020 to improve their customer experience. And that’s key, because good customer experiences are what fuel loyalty.

You need to know who your customers are to understand their needs, but collecting and using data comes with responsibility. Customers are trusting your company to safeguard their private information and be transparent about how it will be used—and you need to make sure the benefit to the customer outweighs the price of their personal information. If you break a customer’s trust, you risk losing them.

Empathy in business is about being able to understand the context around what a person is most likely feeling before coming up with the right response.

Trust is key to loyalty—and it takes empathy to build trust
There is a huge business risk in not being able to empathize with customers, Webber warns. “It really comes down to irrelevance. If you don’t invest in empathy, then you're competing on product or price. And those are the two easiest things to overcome.”

When a customer has a poor experience, they’ll tell their whole social network about it. So the risk isn’t just losing one customer; it’s potentially losing hundreds (or thousands) of customers. On the flip side, investing in customer experience can build your business: according to Zendesk’s Customer Experience Trends Report 2020, 84 percent of customers say customer service is important when considering a purchase, outranking both convenience and reputation. And 67 percent of customers are willing to pay more for a great experience. When someone has a really wonderful experience, they’ll recommend your company to friends and family, and help you gain the trust of potential customers.

[Related read: In a digital world, let customer trust be a differentiator]

4 ways to deliver empathy at scale

1. Listen to what customers are asking for
When you put your customer at the center of your company’s orbit, you’re on the right path. Focusing on your customer means listening to their feedback and taking action to make things better. It means seeing your customers as the heroes, not as an annoyance or a problem to solve. Customer-centricity also means flipping your design thinking—rather than starting with what your company wants to achieve, it’s starting with what your customer wants or needs and going from there. “It’s no longer about ‘Build it and they will come,’” says Webber. “It's more like ‘Let’s build it together.’”

This approach pays off in more ways than one. According to research by Deloitte, customer-centric companies are 60 percent more profitable than companies that aren’t. That might mean taking extra time to chat with a customer about the weather, making it simple to return a product, or adding a surprise item to a package. Those little things are what make a big difference.

When a customer has a poor experience, they'll tell their whole social network about it. So the risk isn't just losing one customer; it's potentially losing hundreds (or thousands) of customers.

2. Use data to personalize the experience
If your customer experience is one-size-fits-all, you aren’t tailoring to customer needs. Delivering a truly custom experience takes the right technology and analytics. Most customers today expect highly customized experiences: they want the company to know who they are, what they’ve purchased, even what size they usually buy. They also expect you to remember this information, so they don’t have to repeat themselves. And this is especially true when they contact customer support.

A real-life example comes from Mizzen + Main, a direct-to-consumer clothing company that wanted to create deeper customer loyalty through empathy. The company aimed to create personalized experiences tailored to every customer, and knew that meant digging into the data. By integrating customer data into a single source, agents could make sales with personalized product recommendations while on live chat or over the phone based on past purchase history. “The best way to live up to our customers’ expectations for high quality, personalized service is to put our trust in the customer data,” said Sabrina Abney, director of e-commerce at Mizzen + Main.

Focusing on your customer means listening to their feedback and taking action to make things better. It means seeing your customers as the heroes, not as an annoyance or a problem to solve.

3. Protect your customer data
Customer data can be the lifeblood of your business, and when you think of it that way, it becomes clear that it’s an asset that needs care and protection. “Eventually we'll see the exposure of companies that say they care about customers, but don't do anything to protect their data,” said Webber. A single breach of trust can cost you a customer forever.

[Related read: Business isn’t always about commerce; it’s also about community]

4. Be open to changing course
One-to-one, empathy means seeing things from another person’s perspective. As a business, it means listening to customers at large, even when it’s difficult. If you made a mistake, admit it and apologize. Recurring asks, complaints, issues or feedback are clear indications that you need to be doing something differently—and it’s likely all there in your support data. Sometimes that means prioritizing a fix or point of friction over a new feature or product.

Companies that want loyal customers need to create a culture of empathy. Tapping into customers’ emotional needs can transform your business and the entire customer experience. Ask yourself: What does my customer want, and how do they want to be treated? When you build your business around that answer, almost anything is possible. And it will help you stand out from the limitless other options your customers have at their fingertips.