Would you like to calculate your emotions?
By Gregory Ronczewski, Director of Product Design at Ibbaka. His skill profile.
In their research article published in Frontiers of Psychology, Jose Luis Retolaza and Leire San-Jose ask, "Is It Possible to Monetarily Quantify the Emotional Value Transferred by Companies and Organizations?" Their study seeks to identify emotional value with consumer surplus and, by extension, other stakeholders in a value transfer process. The result not only allows social accounting to be complemented with emotional value but also facilitates its incorporation into the strategy to optimize emotional value.
Then, we have an article by Jaakko Männistö posted on Feedbackly: How to Calculate Emotional Value Index (EVI®). In the second sentence, he writes, “A whopping 46% are saying that customer experience is the main driver of the purchase decision where pricing is only 20%.” It touches on the same questions I presented a few days ago in one of the blog posts on Ibbaka's Value Pricing Blog - the one with Leonard Cohen's quote in the title.
Colin Shaw, the Founder & CEO of Beyond Philosophy, writes on mycustomer.com
“Emotions drive or destroy value for a business, and often in hidden ways. Emotions influence our desire to buy or not to buy, what we choose from a company’s offerings, what we remember and share about the experience, and, perhaps most importantly, whether we will be loyal to a brand.”
Colin Shaw is the author of the best-selling book The DNA of Customer Experience: How Emotions Drive Value. The baseline model he presents contains 20 emotions organized into four groups, or clusters, as he refers to the groupings. The bottom section, called the Destroying Cluster, contains the following emotions: Irritated, Hurried, Neglected, Unhappy, Unsatisfied, Stressed, Disappointed, and Frustrated. One level above sits the Attention Cluster, which comprises five emotions: Interesting, Energetic, Exploratory, Indulgent, and Stimulated. Now, we are moving toward the most desired cluster - the Recommendation Cluster (Trusting, Valued, Focused and Safe), while the top of the pyramid includes only two emotions: Happy and Pleased under the umbrella of the Advocacy Cluster. According to Shaw, the whole set drives the long-term value while the bottom 2/3 drives the short-term spend, which occupies the lower two clusters.
The Hierarchy of Emotional Value - Beyond Philosophy
For Ibbaka, the Recommendation Cluster, which holds the key to customer loyalty and the Attention Cluster, with the effects materializing in the short-term spending, are the most interesting. These two are pivotal. Moving to the top of the pyramid becomes feasible when customers trust, feel valued and cared for. Neglecting the set of emotions in the Attention Cluster results in being demoted to lowest level of the pyramid. The Destroying Cluster sits at the bottom of the pyramid. These are the emotions you need to avoid triggering: Irritated, Hurried, Neglected, Unhappy, Unsatisfied, Stressed, Disappointed, and Frustrated. "Evoking any of these emotions during your customer experience will cost you money through lost revenue, lost opportunities, and higher costs fixing the problems that result," writes Colin Shaw.
Let's return to Retolaza and San-Jose's research - in the introduction, the authors propose that "Social accounting can measure the value generated and distributed to the stakeholders. It incorporates the market value through economic-financial accounting and non-market value through the fair value. Although the emotional value is considered a fundamental element, it has remained elusive to a systemic attempt to measure it in monetary units. This study seeks to develop a proposal to allow a systematic monetary valuation of that type of value based on the supply and demand curve."
The Emotional Value Index (EVI®) forms the foundation of Feedbackly - CX software that measures customer emotions. So, let's finish with this thought-provoking quote from Feedbacly:
"Today, 90% of companies measure 10% of what matters. Most businesses still measure customer experiences as they did in the 1970s, while innovative and forward-thinking organizations measure customers' emotional experiences. The world has changed – have you?"
I am not sure about you, but at Ibbaka, we have. So, how are we calculating the elusive emotions impacting every decision we make? Stay tuned - I will share a bit more in the coming months.
