How Empathy can Shift Business from Transactional to Relational

In an age of big data and technology, many business and brand leaders are out of touch with the communities they serve. They define them in terms of demographics, consumption behaviors, loyalty patterns, and any other way data sets can segment people.

Despite this deluge of data, they neglect to understand how their value proposition can play a meaningful role in people’s lives, particularly in a world that needs new ways of behaving because the old ones will no longer do.

By applying psychology principles to business data, we can peel back the layers of what is affecting people on an existential level and leverage the power of empathy to unveil deep insights that allow brand stewards to decide which role they wish to play within the new and evolving landscape, so they do not lose relevance now and in the future.

This requires adopting two fundamental truths.

Humans are Predictably Unpredictable

We must first recognize that people purchasing our products and services are not ratio-driven consumption units that behave logically. Consumers don’t always tell us what they do, nor do they always do what they say.

It’s not that they have bad intentions, but rather that they are wired to be emotional, which transcends any rationality data can provide. As people, we create and nurture identities that help us make sense of who we are and who we want to be. This is why marketers need to understand what types of relationships consumers are looking for, so we can empathize and sense what is going to resonate with an audience.

Empathy is the ability to understand and relate to another person's feelings, human to human. Not brand to consumer, marketer to target, or product to segment.

As Maya Angelou said, “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” And the great news is that empathy skills can be developed and applied to business and brands when properly trained and practiced.

Good Actions Must Follow Good Intentions

Purpose became a buzzword for companies and brands, but it is only meaningful when backed up by genuine action.

It easily slips into purpose washing when a business states it has a higher purpose, cause, or social mission and uses its brand, campaigns, PR strategy, or people to promote that message on a surface level.

Purpose clearly hasn’t lost its relevance, but it needs to live beyond the posters and lip service. It must rise above culture and political wars to become embedded in a company’s culture—as well as cultural movements of progress that serve the triple bottom line of people, planet, and profit.

Most corporate leaders have accepted by now that they need to change their course of action because refusing to adapt only brings failure.

Now consumers, especially Millennials and Gen Z, are actively looking for brands matching their values. They are no longer waiting for brands to do good. Instead, they would rather spend on brands that are already there, or at least have charted a path toward a better future with a clearly defined purpose. So, to tune in with generational cohorts and new consumers, brands need to truly understand them. The most effective way of doing this is through decoding the relevant cultural or human themes.

Take the brand Dove as an example. Rather than only selling soap and personal care products, they have tapped into the deep human insight that women do not always like what they see in the mirror. They fight the cultural enemy of narrow beauty definitions, which affect self-esteem. Their marketing teams explore and decode broader topics such as femininity, womanhood, body confidence, role models and stereotypes to unearth an insight that helps them relate holistically to their target audience. In return, consumers remain loyal when they are invited to engage as people rather than being sold products.

Principles for People-Centric Engagement

Brands need to follow four principles to create people-centric engagement that reaches the heart, mind, and soul:

  1. Go further with your vision and mission to bring the people and communities you serve closer.
  2. Define your purpose as a right to exist in this world beyond selling products and services.
  3. The brand’s purpose needs to live beyond a poster and become a part of cultural movements to create a positive impact.
  4. Be radically transparent about the journey and setbacks toward achieving goals to be seen as honest collaborators.

In order to do the above, we need to decode what makes up our shared identity. We need to find story hooks that make us feel in synchrony.

Value is best created when we tap into the power of empathy and embrace our own vulnerability to create collective meaning spaces. When we apply human logic to business instead of business logic to humans, the magic from transactional to relational happens.

Joyshree Reinelt is CEO and Co-Founder of Innate Motion