News and Insights
Empathy: The New Frontier of Business and Marketing
August 17, 2023
Originally published on O’Dwyer’s on August 16, 2023.
The fundamental rules of business are beginning to shift from a purely profit-driven approach to one that’s more people-centric, challenging established norms and demanding a metamorphosis of traditional business models.
As consumers and corporations alike experience ongoing challenges in both professional and personal settings, ranging from the lingering effects of COVID-19 to supply chain disruption to the impacts of new technologies like the metaverse and Chat GPT, marketers must embrace new strategies and tactics to transform their business results.
Central to this transformation is the concept of empathy—understanding and sharing the feelings, thoughts and experiences of others. Most people associate the word “empathy” more with therapist offices than boardrooms, but business leaders are taking notes.
Transformative empathy as a business imperative
In her book “Daring Greatly: How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead,” leading empathy expert, author, researcher and TED speaker Brené Brown shared that empathy has no script, and there’s no right or wrong way to do it. Instead, “it’s simply listening, holding space, withholding judgment, emotionally connecting, and communicating that incredibly healing message of ‘you’re not alone.’”
While empathy may not have a clear right or wrong approach, hitting KPIs does. But marketers are finding empathy to be more than a concept—it’s becoming a business imperative. Worldwide thought leaders are finding that empathy in business has many benefits. Increased employee engagement and loyalty, paired with greater innovation and diversity in the workforce? Check, according to Belinda Parmar’s article for the World Economic Forum. Helping better serve customers by creating an embodied experience for employees that puts them in the customer’s shoes? Check, according to Erin Henkel and Adam Grant in the Harvard Business Review. Increased innovation, engagement, retention, inclusivity and work-life balance? Check, says Tracy Brower in Forbes. Even Tim Cook’s MIT commencement address included notes on the importance of empathy in business, asking graduates to consider how they’ll serve humanity in their work.
Empathy in leadership needs to be a mandate, but taking an empathy-driven approach to customer engagement and marketing can feel confusing and overwhelming. And for financial services marketing in particular, the question is often simply “Where do I even start?”
How human-centric approaches help marketers understand diverse customer bases
People often perceive the financial services industry as a cold, hard realm of numbers and algorithms, meaning the industry stands to gain significantly from adopting an empathetic approach across disciplines. Implementing empathetic approaches can transform customer experience, brand perception, integrated marketing campaigns and beyond—and when implemented correctly, can all benefit the bottom line.
Traditional customer-centric models—which make up most marketing programs within the financial services industry—focus on creating a narrow view of the customer’s immediate needs and wants as it impacts their spending and purchasing decision-making processes. Today’s human-centric models take a broader and more holistic approach, understanding the entire ecosystem in which a customer operates, including their cultural, social and physical experiences.
Empathy with and for customers must form the bedrock in this transformative journey from customer-centric to human-centric design. Today’s marketers are attempting to serve more generations of customers than ever before, coupled with significant disparities in wealth, political views and digital and financial literacy—oh, and don’t forget media literacy!
Demographics, personas, data and empathy: striking the right balance
In today’s highly complex business environment, companies must strive to understand their customers beyond simple demographic profiling and persona work, and instead move into an empathy-driven, human-centric model of marketing. Knowing who your customers are, their expectations and the unique nuances that influence their interactions with your brand are integral to a successful and authentic engagement strategy. Such an empathetic approach promises multiple benefits—improved customer service, increased sales and enhanced customer loyalty.
Marketers operating in today’s data-driven business environment must inform their approaches with insights and data and provide increased reporting and measurement of marketing campaign impacts. Luckily, empathy and data are not mutually exclusive. Rather, doing business with a human-centric approach to marketing calls for a harmonious blend of data-driven insights with an empathetic understanding of customers. Data provides an analytical perspective of customer behavior, but empathy brings in the human touch, the emotional connection that helps businesses resonate with their audiences effectively.
Marketers must be wary of “collective amnesia,” or the risk of losing sight of their audiences’ real experiences while relying heavily on data. Data is essential, no doubt, but it can’t replace the essence of real human understanding of customer needs, wants and psychographics. All messages must be deployed with great empathy to help businesses connect with their audience, not just their executives, marketers or stakeholders. It’s all too common for brands to look at the data and still build campaigns on “me-search,” a common mistake where researchers—or, in this case, brand leadership—act based on their personal identity more than actual rigorous evaluation of data.
The path forward
The future of the financial services industry—and every industry—hinges on the ability to integrate empathy into core business strategies. This empathetic shift, from being merely customer-centric to becoming decidedly human-centric, is more than just a trend. It’s the future of customer engagement.
Empathy, coupled with a human-centric approach, is the new touchstone for the industry, enabling businesses to build stronger, more meaningful connections with their customers while fostering an inclusive, innovative and engaged workforce.
As we step into this future, the essence of business lies not just in the numbers but in understanding and empathizing with the people behind these numbers.
TAGS: Financial Services
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