The Softscaling Strategy — Empathic Data for Better Business
Today’s blog post is written by Kathryn Schmitt, Data Project Coordinator, PatronManager.
A few years ago, researchers Ritu Agarwal and Peter Weill examined a cluster of thriving companies in India; aiming to decipher how these businesses managed to find a high level of success in a rapidly growing, “volatile” economic environment. The study discovered a common approach among them now known as Softscaling, which Agarwal and Weill define as a “powerful left and right brain combination of quantitative optimization and emotion linked together with data-informed empathy.”
In a chaotic and competitive business market, success and growth require an effective combination of several components. First, an optimized business process needs to be in place. Second, a business needs to maintain an emotional connection to their customers. And finally, data needs to be analyzed with empathy.
Many businesses focus entirely on the first component. While having a streamlined and efficient system is certainly crucial, too much emphasis on it can lead to a neglect of customer connection. It can prevent a company from listening and responding to their customers’ needs, which is naturally the most necessary cornerstone to customer satisfaction and subsequently increased loyalty and continued patronage.
When you utilize data empathically, you are effectively combining the rational and the emotional by allowing data to bridge the two. Your CRM can store your data, and even help you to identify shifts and trends in customer activity. But it is only by analyzing those datasets with empathy and compassion that you can truly identify with a customer’s experience and aim to improve upon it.
In their study, Agarwal and Weill looked at Hero MotoCorp, whose CRM data indicated low sales among a young female-identifying demographic. Instead of taking this data and blindly or generically re-targeting this demographic, they approached the information with a curiosity as to why the numbers told this story. An investigation driven by empathy revealed their customers’ feelings: this specific segment was self-conscious about shopping for motor scooters because of how they might look riding them. The company then asked themselves how they might feel in those customers’ shoes and considered what they could do to rectify the situation. They ended up responding with a new program designed to allow customers the option to “try on” scooters in private with supportive staff members.
Another company examined in the study, Tata Motors, focuses on deepening relationships between suppliers and dealers by providing offline, real-world experiences that foster connections. They send engineers and plant workers to local tea shops, where they discuss their products with consumers; they also offer space to air grievances during conferences and forums. They have prioritized listening and responding to the needs of their customers, and they utilize their CRM to store these concerns, as well as to manage the millions of text messages exchanged between dealers and customers. Their emphasis on the specific customer concerns emerging from their data spiked customer satisfaction levels from 72% to 90% in under a year.
There are fewer examples of Softscaling in the Western business world, and likely even fewer in the non-profit world. But the research and theory show that this combination strategy is the key to major success in an unpredictable time, so it surely applies to any organization.
For example, have you noticed a certain demographic lagging behind in ticket sales? Instead of just mass emailing this segment of patrons with a flashy new campaign, consider why this might be happening. Is your event too hard to travel to? Are your patrons on a tight budget? Maybe they’re reluctant to attend alone? Do they need accommodations that aren’t readily available? Imagine how you would feel if you walked in their shoes. What would help you change your mind? And how can you ask them about it? How can you make your patrons feel valued and special — like a person and not a number?
One final thing to consider is that data empathy is more than just being empathetic toward your patrons; it’s also how you, the analyzer, feel about your data. While the numbers are tangible, your interpretation and feelings about it are not. If you know the data with which you work intimately, you grow to trust your gut instincts when it comes to what it’s saying to you. Instead of just using mechanical tools for analysis, you will start to experience what the data feels like. This means you’re getting deeper into the experience of your data sources — your patrons — and will be able to passionately and effectively communicate your conclusions to your team, as well as finding creative and empathically rooted responses.
Consider the tips and inspiration from the companies featured in this study, and take stock of your organization. Are your arts organization’s processes optimized? Are you cultivating emotional connections? And most importantly, are you injecting empathy into your day-to-day data interpretation and practices? Let us know how you plan to use your data more empathically!