How brands use emotional intelligence for stronger customer relationships
CX Dive·Courtesy of Ikea
Rosalyn Page
5 min read
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In the quest to differentiate, some brands are turning to emotional intelligence to transform transactional customer interactions to empathetic experiences.
Brand emotional intelligence, or EQ, means understanding how customers feel at different stages of their journey and taking into consideration both their functional and emotional needs.
“Successful EQ is not just a delivery process, it’s an opportunity to create stronger brands,” said Jean-Francois Damais, global chief research officer of CX at Ipsos.
Prioritizing emotional impact can drive stronger brand performance by forging deeper connections, according to a February Braze report. Among brands concerned with actively building emotional connections with customers, 60% exceeded their revenue goals, the global survey of 2,300 marketing leaders found.
Businesses that successfully implement EQ create deeper, more meaningful customer connections and measurable gains in customer experience metrics. However, brands can go wrong if they ignore the fundamentals of customer interactions and fail to deliver on promises, leading to erosion of trust and brand damage.
To realize potential, brands must integrate EQ into customer engagement strategies and track outcomes to sustain brand growth.
“It's mapping the customer journey to experiences that will create positive memories and emotional attachment,” Damais said.
How can brands leverage EQ for maximum impact?
The scope for emotional intelligence varies across sectors, with markets such as automotive having greater potential to build emotional engagement because cars are complex, highly personal purchases with a multitude of touch points online and offline.
“In the case of automotive, brands typically invest in tracking and monitoring, and they understand the importance of developing that affinity to create brand loyalty,” Damais said.
Global brands with large footprints, diverse customer groups and geographic locations can utilize EQ by focusing on the local to foster connection.
“Ikea is known for creating a sense of community, with strongly defined brand values that are reflected in the shopping experience,” Damais said.
But EQ won’t be as effective for every industry. Service providers, such as internet service providers, mobile networks and utilities, tend to have lower emotional engagement because they represent functional, service-oriented relationships.
Financial services companies have an opportunity to stand out by prioritizing the experience they provide to customers and creating more meaning in the relationship.
Wealth management firm Brighton Jones goes to great lengths to integrate emotional intelligence into its customer experience. The goal is to align their services with customers’ values, and all employees undertake its bespoke EQ training program.
The MESI program — which stands for mindful, emotional and social intelligence — helps employees understand and identify their own values and passions to connect more meaningfully with clients.
“It gives advisers the ability to connect on a deeper, more personal level beyond just financial metrics,” said Carley Dillon, CXO at Brighton Jones.
Even fintechs, which are mainly digital, can make EQ a differentiator. Despite low personal interaction, some fintechs manage to create emotional attachment through digital personalization.
“They're very good at analyzing customer data to provide useful recommendations or guidance — things that are more personalized and give customers more control and a sense of recognition,” Damais said.
The importance of tracking EQ to measure outcomes
Over the past decade, brands have focused on using technology to improve efficiency and reduce friction in customer experience, according to Damais. “As a result, a lot of CX measurement has been focused on these functional aspects of customer experience,” he said.
While functional performance is important to meet customer needs and reduce pain points, it’s not enough to drive meaningful relationships. Many brands are catching up with the potential of EQ.
“Not all customer needs can be met at all times, but key moments should be elevated to create emotional attachment,” Damais said.
When customers are emotionally attached — not just functionally satisfied — they’re more likely to have higher retention rates, higher share of spend and higher lifetime value, according to Damais.
“We see brands that really understand and meet their customers’ true needs at an emotional level create mutually profitable relationships,” he said.
Positive outcomes in metrics such as net promoter score and customer lifetime value are linked to emotional attachment.
Dillon credits Brighton Jones’ 98% retention rate to its emphasis on EQ across services, advisers and customer interactions.
The wealth management firm tracks a range of metrics across sales, engagement and retention to measure customer engagement and sentiment. It monitors employee sentiment with regular pulse surveys.
“We spend time analyzing that data and having one-to-one conversations to ensure the interactions our team members are having with their clients are really powerful,” Dillon said.
What are the limitations of brand EQ?
When creating emotional attachment through advertising, brands need to be make sure they can deliver on any promises they make.
If customers’ “expectations are violated in a way, and they will be very likely to engage in negative behavior or attitudes toward the brand,” Damais said.
Damaging outcomes include bad word of mouth, negative reactions and potential churn. To avoid these outcomes, brands need to design their processes and monitor the experience they provide to customers to make sure that it delivers on their customers’ functional and also emotional needs.
A customer-centric culture must be embedded across the organization to ensure emotional promises align with the customer’s actual experience, according to Damais.
“It shouldn’t be siloed in the customer experience team,” Damais said.
Brighton Jones tracks the stages of client engagement to understand how customer needs may be changing and to respond accordingly. A “hierarchy of needs” starts with building credibility first and foremost.
“Then we move beyond the balance sheet to other ways we can add engagement, add joy, or continue to help them align with their values,” Dillon said.
Emotional intelligence is a differentiator, Dillon said.
“People really gravitate towards companies that feel human and that make them feel seen and valued,” she said.
