EMPATHIZE WITH CUSTOMERS

The holiday season is upon us. People are making their list and checking it twice. But unlike Santa, most of us have to guess what our loved ones want. And I don’t know about you, but the hardest part about Christmas shopping is the time and energy it takes to find and choose the right gifts.

At grio, we remind companies all the time that it doesn’t just cost people money to buy from them. It also costs them time and energy, among other things, to buy. In fact, if someone could tell me exactly what my wife wants for Christmas, and ship it to me on time, I would pay them whatever they ask. I would still ask for a gift receipt, of course. Better safe than sorry. But I digress.

My point is, most people would be willing to pay more to save time and energy, for example, because money usually isn’t the issue.

At grio, we take a counterintuitive approach to help companies grow their profits. We ask them to not focus on growing their profit but on growing their customers’ profit instead. To frame their thinking, we share with them our customer profit equation where perceived BENEFITS — perceived COSTS = customer PROFIT.

Customers have three sets of needs: functional, transactional, and aspirational. The functional benefit of a car, for example, is being able to go from point A to B safely. A transactional benefit is the convenience of buying the car online to avoid the hassle of car dealerships. An example of an aspirational benefit is the social status attached to sports cars.

Costs can also be grouped into three categories: money, time and energy (physical, mental and emotional). In my earlier example, I was willing to pay more to save myself the anxiety of buying my wife the wrong gift.

There’s a lot more to unpack here, so let’s dive in using the meteoric rise of Uber to illustrate.

There are many reasons why Uber became so successful and why most of us love it so much. Uber is one of the best examples of how you can improve customer profit without fundamentally changing the product or service itself.

THE COST OF TIME

Time, at least at face value, is the biggest cost Uber saved us. It saved us the time of looking for a taxi and the time it used to take to pay for the ride. Uber works so effectively because it completely removes the inconvenience of having to hail for a cab during rush hour or trying to catch a ride when you are in a new, unfamiliar, city.

THE COST OF UNCERTAINTY

I added the at face value caveat earlier because the biggest cost Uber saved us is not time, but uncertainty. Uber removed the uncertainty of not knowing if or when you might be able to catch a ride, while at the same time removing the anxiety of not knowing when your ride would arrive. They also removed the uncertainty of not knowing how much you would owe the cab driver at the end of the ride because we didn’t even know what the rate was to begin with. And even when we did, it was hard to trust that meter.

THE COST OF CHOICE

Choosing is one of the biggest costs we incur when we buy because it is riddled with anxiety. When we are not given options, we freeze because we have no reference point to know whether we’re making the right decision. And when we’re given too many options, we freeze again, this time because choosing becomes overwhelming. Uber gives us the optimal number of options: Uber pool, regular and XL. When faced with three options, most of us confidently choose the middle.

THE COST OF RISK

Every purchase comes with risks. Like the risk that my wife won’t like her gift and that it would ruin her Christmas– and mine. We are often willing to pay more to lower risk. Uber deals with a different kind of risk. Since your Uber driver could be anyone, Uber created profiles for their drivers with a rating system. Most importantly, it’s the background check and the security measures they have to take to not only make us feel safe, but to actually keep us safe.

Ultimately, the reason we challenge our clients to focus on increasing their customer profit is because fundamentally, money is a way of capturing a fraction of the value you create for your customers. And the greater the value you deliver, the more you can charge for your products or the more people choose you over your competitors. That’s the power of our empathy-led framework and methodology.

.

.

.

.

PS: Those who know my wife Kellen know that she is one of the most low maintenance people you’ll ever meet and the easiest person to shop for. But nothing beats dramatization to drive a point home.