Is Mr. Spock a Good Candidate for Being a Connected Customer? The Role of Emotion in Decision Making
Chapter 6 of The Connected Customer by Baba Shiv
Evolution of the customer value proposition (CVP)
1980s to 1990s: CVP = value from benefits+ value from pricing / cost
cost can be intangible, such as friction cost
late 1990s: emotion is added as the third component
emotion can be shaped independently from the benefit
emotion is a key component of a brand's inventory
Post-1990s: emotion as an essential foundation
So instead of additive or even different interaction values between benefit and cost
Decision quality, emotions, and the brain
what is a good decision?
Normative benchmark: axioms of dominance (people choose an inferior product) and transitivity
Output-driven, a good decision is one where the decision maker is satisfied with, confident about
Emotion can shift the evaluation of attribute information in favor of the emotionally enriched option. This means sometimes, a trade-off situation (no dominant option) will become dominant due to emotionally driven biased evaluation.
A View into the Future
Developing appropriate measures for the emotion component. e.g.,: face tracking, skin conductance, etc.
Exploring an array of tactical means of shaping emotion. i.e., additional arousal mechanism in addition to audio-visual
Gaining richer insights into the CVP by examining interaction effects of emotion, benefit, and pricing across various product types and other moderators.
Comments from Baba
Two aspects of any decisions:
pre-decision (due diligence phase): reason-driven, the goal is to reduce biases
due diligence is about creating the search set and evaluation criteria
post-decision: emotion-driven, the goal is to increase confidence
confidence is important for customers (brand loyalty), leaders (persuasive, inspiring, placebo effect),
A good decision is based on different things depending on the stage (pre vs. post)
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