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knowledge.emory.edu

Quality Insider

Emotional Engagement Adds Value

Transform the customer's experience

Published: Friday, July 18, 2008 - 04:37

Harley-Davidson knows how to build ownership. For decades, the motorcycle company has attracted and retained a client base that shows no signs of waning. People purchase its products without solicitation, and collectively they gladly spend millions of dollars to wear its advertising on clothes, attend national and international H.O.G. rallies, and even tattoo the Harley-Davidson logo on their bodies. As the tagline goes, Harley owners “live by it.”

For decades, Harley-Davidson has been “engineering” customer expectations, says Lou Carbone, founder and chief experience officer of Experience Engineering, a Minneapolis-based consulting firm. Carbone recently presented “Clued In: Managing Experience as the Value Proposition” to members and friends of The Emory Marketing Institute (EMI). EMI is based in the Goizueta Business School at Emory University.

What Harley-Davidson gets—as do Starbucks and Disney—is that it’s selling more than motorcycles (or coffee or entertainment). “It is all about understanding the psychology of the customers,” Carbone begins, launching into an entertaining and informative spiel. “It requires getting into the minds and hearts and heads of customers,” and ultimately, discovering the clues that make them loyal, sometimes irrationally so, to a brand.

“What we’ve done at Experience Engineering—and I say experience engineering, not customer engineering—is focus on how to turn the customer experience into value,” he says. “Whether it is an employee experience, a shareholder experience, or the customer experience, all of these experiences are the totality of creating valuable personal relationships.”

Several key principles are necessary to engineering customer experience, says Carbone. “You are moving from making and selling to really sensing and responding. We create an emotional [connection] by thinking and looking at everything from the customer back. It’s understanding and leveraging the role of the unconscious mind, becoming clue-conscious, and developing a rigorous system that manages those clues.”

Carbone fondly remembers the travels of his childhood, a time when the Howard Johnson’s restaurants and motor lodges were a habitual stop along the fledgling interstate highway system (eventually the chain boasted more than 1,000 restaurants and 500 motor lodges in 42 states and Canada). In the 1950s and 1960s, the United States was a country of budding baby boomers and, for the first time, disposable income. “HoJo’s” empire of orange-peaked roofs was as familiar a sight as the golden arches are today. The chain wooed children and adults with its dependability, always featuring 28 flavors of ice cream and special menu caps for the kids. It became a pop culture icon.

“I got to work with Howard Johnson’s in the last six months of its existence,” Carbone jokes. “I was very impressionable. I was going to work with this organization that created franchising, which founded one of the first restaurant brands,” he excitedly remembers. “I’m in meetings with these folks, and we’re talking about cutting a sixteenth of an inch off a straw in order to save $17,000. We’re trying to go from four-ply napkins to two-ply to save thousands of dollars. It was all about efficiency—how much value can we extract? They had three flavors of ice cream that took too long to produce. There was talk of getting rid of Frozen Pudding, because it had rum flavoring.”

Slightly overwhelmed, Carbone quietly questioned the vice president for marketing. “But you’re known for 28 flavors; that’s how the brand is known. He said, ‘Don’t worry about it, we’ll just tell people we are out.’”

Not long after this discouraging incident, he began to work for an organization called Disney. “I was never the same again,” he continues excitedly. “Here we were talking about the temperature of the velocity of the wind blowing in your face at Spaceship Earth. They were talking about the temperature at which an ice cream bar melts, because in summer it will melt at a very different rate in California than in Orlando. The scent of chocolate chip cookies is actually pumped out onto Main Street.”

Many have tried to mimic Disney’s success, but only a few have. “What we miss when looking at best practices is what next practices are. The ultimate beginning of next practices to me is in the genius of a man who understood a very essential question: ‘How can you make that emotional connection?’ He built a story with a set of clues, and then it clicks.”

“I became fascinated by the power of the mouse. Peter Drucker said years ago that the purpose of a business is to create value, and the reward is profit. We lose sight of the richness and the robustness and the palate that we have to draw on to create value when we become so focused on the manipulation of the dollars to generate profit.”

To understand the value, Carbone stresses, you have to understand people. “Customer satisfaction isn’t a predictor of customer loyalty,” he adds. ”Most defectors are actually satisfied customers. It’s really based on the need for emotional engagement.”

To prove his point, he cites another personal experience, this one with Northwest Airlines. Carbone hails from Minnesota and regularly flies to and from the Twin Cities airport on Northwest “which has 87 percent of the lift in Minnesota,” he notes.

“I’ve been platinum as long as they’ve had it, with almost four million actual air miles. They think I’m loyal.”

But Carbone says there is a distinct difference between necessity and likeability. “I hate [Northwest]. I feel they have to reward me for the pain that they inflict on my life and how they cause me to feel.”

Is this rational? Experiences have nothing to do with the rational side of your brain, Carbone says. “There are experiences that we accept, and experiences that we prefer. Then there are those we prefer with such a passion that we don’t even understand. How loyal do you have to be to tattoo someone’s logo on your body?” he asks, referencing Harley-Davidson.

Here in the 21st century, we are witnessing a dramatic shift in how and why people spend money. “The tools, perspectives, and the way we think and form our companies are still built off the model of making and selling in the industrial age,” Carbone says.

“The world has changed dramatically into a world of sensing and responding. Sensing things that we don’t even know we don’t know. So it is fundamental to understand how customers behave. We begin to become very concerned about attitudes. How they feel about us as a company. How they feel about our products and our brand. But the ultimate value is how it causes them to feel about themselves,” Carbone contends. All of a sudden, marketers are studying neuroscience.

“Customers consciously and unconsciously filter a barrage of clues and organize them into a set of impressions—some rational, some emotional,” he continues. These clues involve all five senses. Some clues are relayed from human behavior (voice tone, body language) and others are mechanical (design, color, temperature). Thus, without consciously knowing it, we are aware of the comfort of a chair in Starbucks or half-empty toilet paper rolls and how the towels are folded at our hotel.

In fact, says Carbone, it’s impossible not to have an experience. The server’s choice of words, the layout of a room, the music in the background while shopping all scream “experience” to a customer.

Unfortunately, most of the time it’s not the experience you want your customers to have.

Carbone’s lecture is just one of the many offering of Emory University’s Emory Marketing Institute (EMI), a research group that focuses on the advancement of brand-driven business performance. Visit the EMI webpage to learn more and to access free managerial articles.

This article was originally published on Knowledge@Emory, an online business journal that provides thought leadership, research, and strategic perspectives from faculty at Emory University and its Goizueta Business School that enable executives to optimize business trends and tackle complex business problems of the day.

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knowledge.emory.edu

This article was originally published on Knowledge@Emory, an online business journal that provides thought leadership, research, and strategic perspectives from faculty at Emory University and its Goizueta Business School that enable executives to optimize business trends and tackle complex business problems of the day.