Lately, terms like “human-centered” and “customer-centric” are becoming part of business lingo. These terms call for companies to examine their business from the perspective of their customers, to understand the challenges of the people they serve, to see the world through the eyes of their customers. In other words, there is a growing call for businesses to employ empathy. This post explores why this concept is important to business success.

Businesses today compete in a high tech globalized marketplace where customers have at their fingertips access to anything they desire from anyone anywhere in the world. Technology has gotten cheaper and is changing so fast that this alone no longer provides companies with a competitive advantage. Global competition means that customers have more options on where they can make their purchases. Easy access to information means that customers today are well informed. So how do companies compete in such a marketplace? The answer, of course, is empathy!

Skeptical? I can relate. When I first started down this path of research, I too was skeptical, and the idea seemed almost counterintuitive to me. Then I was challenged to think about some recent purchases I had made to identify why I decided to buy from a particular business. When I needed to hire a personal trainer after speaking to many I went with the person I felt understood my needs the best. When I needed to buy a new car, I went with the dealership that made the experience effortless for me. While I have received many appealing offers to switch insurance companies, I’ve stayed with the same agent for almost a decade, because he knows my circumstances, checks in with me every quarter, and when there are opportunities for me to get a discount, he proactively approaches me with them. When I was looking to make these purchases, I started with a very analytical approach looking at features, benefits, costs and they were relatively similar. Ultimately, I went with the providers that I felt could meet my needs the best.

Now you might be thinking, what about cost? Customers want low cost. Yes, this is true. However, competition today is such that cost alone is not a differentiator. Additionally, often a low-cost pricing strategy is not an effective long-term strategy.

You might also be thinking, but what about benefits and features and quality? Again, you are right. Quality is important. No matter how well you know your customers if what you deliver isn’t of quality your business will not be successful. The same thing with benefits and features, if you don’t meet the standards that your competitors do, you won’t survive either. The challenge is that competition today is so fierce that cost, quality, benefits, and features, these alone are no longer enough to give you a competitive advantage.

When all things are the same, and customers cannot differentiate between your products and services and your competitors, the decision becomes an emotional one. In this context, purchasing decisions come down to feelings.

Maya Angelou states this eloquently when she said “… people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” In today’s highly competitive marketplace, how your customers feel about your business, is a competitive advantage. An empathetic human-centered approach allows companies to understand, create, and deliver solutions that matter to their customers.

What does it mean to take an empathetic approach? Empathy in business means understanding our customers holistically and not just in the context of how they use our products or services. It means going beyond their demographic data to understand their stories, their day-to-day experiences. It means seeking answers to question such as:
What is a typical day in the life of our customers? What challenges do they encounter? What do they hear, see, do, think? What are their pain points? What brings them joy?

Design Thinking calls for knowing our customers so well that we understand their latent needs – the needs that are difficult to articulate. Having empathy for our customers means we can see life from their perspective, we can walk a mile in their shoes. By understanding the challenges your customers face, by seeing situations from their view, we can create solutions that meet their needs and improve their lives. When we have empathy for our customers, we can create solutions that matter to our customers.

How does empathy help businesses? Here are few examples of how empathy has allowed businesses to deliver what matters to their customers:

• Lending firm examining the life of loan officers discovers the need for making loan documents digitally available to customers.
• Sales Team spends time learning about the challenges their customers face and uncovers unmet customer needs that lead to developing a new line of products.
• Consulting Firm explores the needs of their target clients and determines the need to redesign their business model.

In taking an empathetic approach, these companies were able to understand what their customers needed and deliver solutions that mattered to them. By doing this, these companies not only fulfill unmet needs but also increase the companies value to their customers. Consider this, as a consumer, would you want to do business with a company that took the time to learn about you so they can serve you better? How does a company like that stand out in the endless sea of options available to you?

When we understand what our customers need, we are in a better position to deliver solutions that matter to them, empathy allows us to discover their needs.

Curious about how to get started with Empathy? Here are three techniques to try:
1. Journey maps help you see your business from the perspective of your customers. To learn more about this process check out Smaply for a free downloadable toolkit http://learn.smaply.com/

2. Empathy Maps help you understand who your customers are, what their day-to-day experiences are, and the challenges they face. To learn more about this process check out http://gamestorming.com/?s=empathy+map

2. Visit your customers on their turf. This approach allows you to understand context. How do your customers go about their lives, what challenges do they face, how do they interact with others, these types of observations can lead to uncovering the latent needs of customers.

3. Gather customer stories. If visiting your customers on their turf is not realistic, consider interviews or surveys to collect their stories. Make sure to ask open-ended questions and questions that go beyond talking about their experience with your products and services. Remember the goal is to capture stories.

As technology continues to advance and globalization continues to make the world smaller, connecting with our customers on a human level will increasingly become the competitive edge on which businesses thrive.