The Empathy-Driven Business

How can leaders start using empathy as strategic driver for competitive advantage? The tool: dedicated customer personas.

It’s true, customer empathy can be used as strategic instrument to build a clear competitive advantage. Famous Henry Ford once said that “if there is any one secret of success, it lies in the ability to get the other person’s point of view and see things from that person’s angle as well as from your own.”

Illustration by Dina Dissi, SAP Digital

This mental ability to imagine oneself in the situation of another is much more than a soft skill. The ability to reflect from the perspective of our target audience enables us to understand their behavior and motivation. Moreover, it ultimately allows to design more delightful and meaningful products and services for the customer. Investing in empathy significantly improves the bottom line. Thus, empathy is in stronger demand from corporate leaders as ever before.

In our rapidly transforming world where technologies are overturning, empathy is a core attribute to transform functionality into meaningful experiences

Empathy as Competitive Advantage

Building empathy is not only a bottom up approach as it effects companies culture, processes, and strategy design. It should be initiated and continually reflected with the leadership team. The SAP Center for Digital Leadership uses personas as a helpful tool to apply empathy and customer centricity in a strategic decision making process. Personas represent the goals, behaviors, and challenges our target audience is facing and they help us to consistently share and absorb customer insights in a relatable and tangible way.

Unlike market segmentations, personas mentally come to life through profiles with names, photography, and characteristics making it easier to position oneself into their shoes. Through their explicit and compact nature, they facilitate strategic decision making and enable us to focus on delivering what is most valuable and relevant to our audience. On highest impact, personas provide customer focus across all customer touchpoints within the company, break down business silos and help building the foundation for a holistic customer experience.

Using Personas to Define New Product and Service Opportunities

Provisional personas designed on the companies understanding of the customer help the leadership team to shape and illustrate a common understanding of the customer needs.

Using lean customer research to validate assumptions made during the persona design helps to generate evidence on the accuracy of the defined needs.

The generated insights will sharpen the personas and enable ideation of potential opportunities addressing the identified customer needs.

Assessing the outcome in three dimensions and highlighting it in a matrix helps to set focus on the most promising opportunities:

  • Desirability: how well will the solution fill the persona needs? Will it delight them?
  • Viability: how well does it align with the business vision? How big might the return on investment be?
  • Feasibility: can we make it happen? How long will it take to implement it?

Rapid prototypes of the most promising opportunities help to validate the value proposition to customers and ensure the team is on the right track. Those opportunities that prove value can be designed and tested with customers in iterations and over time establish a vital customer centric product and service portfolio

Ad-hoc persona design; Illustration: Dina Dissi, SAP Digital

Path Forward

To unleash the power of empathy as strategic driver for corporate positioning and competitive advantage, leaders must act as role models and jointly initiate the process. Provisional personas are a hands-on starting point enabling to set a common empathic focus quickly. They can be used to define customer centric business opportunities and foster strategic decision making. They enable constant synchronization, validation, and alignment of customer needs throughout the company in a relatable and tangible form.

Without validation, the designed personas and identified opportunities are just assumptions. It is key to synchronize the business assumptions with the real world to ensure the right path forward. By doing so, businesses start taking the first step towards the creation of a holistic end-to-end customer experience that delights the customer and stands out.

 Follow Alexander and Fabian on Twitter: @alexvonnemann | @fabianpehlke.