Before we really get into the detail, let’s kick things off with five good reasons to build Emotional Capital:
- It stops people shopping the category, and starts them shopping your brand
- It builds resilience and responsiveness into your brand
- It reduces price sensitivity, reinforcing loyalty
- It speeds up consideration, making customers less receptive to your competitors
- It makes customers believe your brand is worth talking about and recommending to others
How does your brand perform in those areas? Is there room for improvement? How can you get closer to your customers? That’s where generating Superior Emotional Capital comes in…
Part one: You can’t logic your way through emotion
Even before Mark Zuckerberg and his terrifying avatar revealed Meta, the brand formerly known as Facebook had been facing deep social, moral and political questions. In the recent high-profile testimony from whistleblower Frances Haugen, it was accused of putting its profits before the health of its users, of amplifying division, extremism and polarisation – and doing so knowingly.
Facebook’s response to Haugen? “Deeply illogical” according to Mark Zuckerberg, i.e. not incorrect, but in defiance of rational thinking.
It’s an odd choice of language that shows the complete lack of understanding the Facebook leadership has about its own brand.
Mr Zuckerberg assumes people think about his brand the way he thinks about his business. As a set of step-by-step logical decisions rather than a random accumulation of emotions.
People have a wealth of emotions they associate with Facebook. They may have seen pictures that made them feel ugly, read articles that made them feel scared and shared information that later made them feel vulnerable. For many people that’s part of, if not the entirety, of the Facebook brand. Logical? Arguably not. Emotionally real? Certainly.
Your brand is how you make people feel. And Facebook makes millions of its users feel lousy about life on a regular basis. Its apps pour content into peoples’ feeds at the same rate a city park bin collects beer cans on a hot summer’s day. It’s more than is possible to manage, with most of the content an eyesore with a suspect smell.
“Your brand is how you make people feel. And Facebook makes millions of its users feel lousy about life on a regular basis.”
It’s also, of course, one of the major contributing factors to the ever-increasing number of “adverts” we’re exposed to every day, a number that stands at over 5,000 according to recent estimates. Just take a bit of time to digest that number. 5,000. The world is getting louder, and that takes its toll emotionally.
In a noisy world we use our emotions to guide us
To combat the emotional drain of a noisy world, people manage what they see and who they listen too. Sometimes this is conscious and deliberate – following or muting brands on social media, saved lists on online supermarkets and subscriptions to services. But most of the time it’s managed by the subconscious – default search terms and engaging with algorithmic recommendations seemingly served at random.
People aren’t anti-brands. They don’t instinctively push away every piece of branded communication. They just don’t want to engage in experiences with brands that don’t trigger a positive emotional reaction.
People push away the brands they don’t trust and pull closer the ones they do.
Building close relationships with customers is a character trait of growth brands. Facebook understood this once, when it focused on groups and events rather than clicks and shares.
The saying goes that time is the most valuable commodity. And people spend more time with brands they have a close relationship with. Dwelling longer on their website, giving their service more of a chance, considering rather than ignoring the brand’s new skus in a supermarket aisle.
People are more alert to the brands they feel close to, leading to their communications getting noticed more quickly and more often. Brands with closer customer relationships need less exposure for audience recognition. Asda Money completely revamped its customer experience in 2021, including a redesigned online presence that put customer needs front and centre. By understanding audience triggers. mindsets and motivations, Asda Money can relentlessly focus on staying close to customers throughout their experience, which enables them to successful convert customers to cut wastage and costs.
Zalando has built incredibly close relationships based on an innate understanding of their customers’ emotional needs. Their customers don’t just buy the clothes, they buy into a lifestyle. They want a brand that walks the walk when it comes to sustainability. That actively champions diversity & inclusion. They believe in the power of togetherness.
For Zalando, understanding this allows it to build close relationships with its customers , which leads those customers to stop ‘shopping the category’ and to start ‘shopping the brand’. Customers with close relationships become less price conscious, and more open to the innovations and initiatives necessary for a business to grow. Apple is another clear example here – it has shifted customers from looking for a new phone or laptop, to simply waiting for their next product release. The positive supply of emotional capital helped them persuade people to pair the phone with a watch, to save all their photos in a Cloud, to listen to Apple-streamed music on Apple headphones.
Closer customer relationships spark an instinct. They provoke an emotional reaction between brand and audience that leads to action.
Part two: Fight or Flight? How customers react to the brands around them.
Evolution has hardwired our emotions as a survival mechanism. Emotions bypass our ponderous, deliberative thinking process. They push away from what we intuit as bad for us and pull us to that we intuit as good.
Emotions accumulate. Both positive and negative. They can be given a value. At MSQ we call this value Emotional Capital.
Brands that we push away have negative Emotional Capital. Brands that we pull towards us have positive Emotional Capital.
For a brand to build closer relationships with its customers, it needs to earn and accumulate as much positive Emotional Capital as possible.
Emotional Capital is the currency of closer customer relationships
Emotional Capital works like capital on any other balance sheet. The more you have, the more resilient your brand is in moments of change.
It enables brands to weather sudden shifts in the market, unexpected movement in consumer behaviour, even corporate scandal. The bigger and the more frequent these changes are, the more capital a brand will need. Volkswagen wouldn’t have been able to recover from the diesel emissions scandal if it wasn’t sitting on a huge Emotional Capital surplus earned thanks to years of significant investment in its most valuable asset, the VW brand.
And the more Emotional Capital a brand has, the more responsive it can be. Superior Emotional Capital enables brands to move quickly, adapting to category innovation, market dynamics and changing consumer tastes. Diageo has managed to maintain close relationships with bar staff during the pandemic by fostering communities online. The Diageo Bar Academy provides practical support for bar staff, from career inspiration to upskilling tutorials, pub quizzes to ‘bar skill’ challenges. Through high production values, influencer partnerships and genuine sense of community spirit, Diageo shows the bartending community that they truly understand them. Keeping customers close and increasing Diageo’s supply of Emotional Capital.
Having a surplus of Emotional Capital means a brand can make bigger bets, with bigger upsides. Disney sits on a huge reserve of emotional capital which helped to de-risk the launch of Disney+. Yes, the investment in Marvel and Stars Wars helped to make the product market ready, but it was Disney’s reputation as a safe space for children that allowed Disney+ to not just compete but thrive in a the increasingly crowded streaming market.
In a period of accelerated change and increasing noise, growth depends on being both resilient and responsive.
Emotions are always on
The scandals that stack up for Facebook are akin to the content strategies of the brands who use it, evergreen. Currently Facebook’s scale keeps them insulated from the sharp commercial impact that comes with declining emotional capital. But that won’t sustain them forever. Neglecting the emotions of their customers will keep draining the brand’s reserves of emotional capital. Younger users will continue to dry up – no matter how meta they may be – and trust will eventually run out.
Facebook or any other brand can’t rely on “logic” to succeed. The only currency that wins out in the long run, reduces disloyalty and builds resilience is the most basic instinct of them all, emotion.