The idea that empathetic companies – those that “step outside of themselves” and “walk in someone else's shoes” - are more successful and more likely to discover opportunities for growth isn’t new. Ever since Dev Patnaik and Peter Mortensen wrote their bestselling book Wired to Care: How Companies Prosper When They Create Widespread Empathy, empathy has become an important management skill. If empathy yields benefits on the production side, what about the consumption side? In addition to fostering the empathetic company, @@should managers invest in empathetic consumers?@@
From a conventional marketing perspective they shouldn’t. For Itamar Simonson and Emanuel Rosen, for example, smart companies will not focus on influencing the consumer’s emotions and instead communicate the “absolute value” – what consuming the product or service is really all about. That’s because, in a landscape where detailed product reviews are readily accessible, consumers are less influenced by emotions or long-held beliefs and instead value-maximize in a rational way.
What approach describes reality best? Should companies go rational or emotional? Should they optimize the decision journeys for technologically empowered and rational consumers? Or should they invest in empathetic consumers?
To answer this question, my colleagues Ela Veresiu, Ashlee Humphreys and I studied a market widely recognized to be an archetype of smart, technologically networked, rational consumption: Uber’s ride-hailing market. In particular, we investigated what influenced generalized and consumer perceptions of Uber between 2010 and 2015. We found that, although Uber was widely heralded as a path breaking innovation, consumers often shunned Uber’s value proposition. And to address this issue, Uber’s management team initially did what Simonson and Rosen recommend: they cut down on their emotional brand spin and instead communicated Uber’s absolute value – the true comfort, ease and luxury of an Uber ride. But the problems persisted.
As Uber’s leadership dug deeper, the root of the problem appeared: Uber is a platform business that, by facilitating exchanges between two or more interdependent parties, shifts numerous risks to individual producers and consumers. Hence, Uber consumers weren’t rational agents. Instead they were confronted with a host of physical, social and economic risks – from surge pricing and the loss of possessions to personal injury and even death - with fear, anxiety or anger. To remedy this situation, Uber needed a whole new way of managing the market as an emotional system.
To illustrate this point, consider “Anna” - one of the Uber passengers we interviewed during our study in 2015. Anna’s Uber X driver caused a major accident that bruised his face and gave her whiplash. Here is how she felt when she discovered that the police had left a message on her phone asking for further details needed to prosecute her driver:
“At first, I thought about calling them back and going on record…[about the driver’s mistake]. But then I realized that this would probably have terrible consequences for the guy, his job and his family. I mean, just put yourself in the driver’s shoes here for a second. It’s a terrible situation to be in. The truth is, I really feel for the guy and I felt a strong responsibility as a customer to do the right thing, you know. I mean, aside from what happened, he had been really great to me as a customer. And so, in the end, I decided not to respond to the call. Instead I gave him a lower score.”
Anna’s statement illustrates how consumer empathy can help govern a market in the absence of formal regulation. Accordingly, Uber’s management team realized that, in order for Uber to succeed, consumers needed pretty much the opposite of “absolute value” – not a rational communication about the product’s de-facto benefits but “relative value” – an emotional message about the importance of taking another person’s (driver) perspective. Accordingly, Uber is investing in empathetic consumers.
It is crucial for marketers to understand that even the most technologically networked markets provide human experiences. As such, they are emotional systems. Wise companies therefore encourage consumer empathy while fostering the institutional arrangements necessary to make market-destabilizing emotions such as anxiety and anger less likely to occur. Creating a customer experience that is truly greater than the sum of its parts isn’t always about promoting absolute value. More often than not, it’s about nurturing the value of taking the producer’s point of view.