Beyond the buzzword: What does empathy -really- mean in business?
The connection seems clear: Caring in business is good for the bottom line.
It’s tempting to dismiss empathy as the latest corporate buzzword…until you look at the numbers.
Last year, the top 10 companies in the Global Empathy Index — blue-chip firms like Facebook, Disney and Apple — increased in value more than twice as much as the bottom 10 and generated 50 percent more earnings. The connection seems clear: Caring in business is good for the bottom line.
But what does it really mean to be empathetic in business? And, more importantly, how do you cultivate the kind of genuine empathy that gives you a business edge. Here’s my perspective from the front lines of a growing company.
What is customer empathy, anyway?
Unlike sympathy where you feel compassion for someone, empathy is about stepping outside of yourself to better understand the experience of another. It’s reversing the traditional idea of build it and they will come. As Amazon CEO Jeff Bezos says, “We’re not competitor obsessed, we’re customer obsessed. We start with what the customer needs and we work backwards.”
I see empathy as a muscle that needs to be exercised. It doesn’t necessarily come naturally. Nestio started, for instance, as a tool I used to scratch my own itch as a renter in New York City. I had sympathy for other apartment hunters, so I developed a platform that enabled users to pool listings in one place. But when we pivoted to the business-to-business space to focus on landlords and brokers — who desperately needed a platform to list and market properties — I had to develop the far more important aptitude of empathy.
At the time, I had very little in common with our customers. I didn’t come from a real estate background. I’d never had to manage a building with hundreds of apartments in it. If we were to have any chance of success, my whole team needed to get inside the heads of our clients, live their pain and find solutions that made their day easier.
This leap from sympathy to empathy may sound semantic, but I think it separates good businesses from great ones. It’s relatively easy to service your own needs. But truly growing as a business requires the ability to move beyond your world and become an expert at intuiting and relieving your customers’ pain…which is easier said than done.
How do you build your empathy muscle?
The first step for our team: get in the trenches. There’s no substitute for actually spending time — days, weeks, even months — alongside your customers to get a firsthand understanding of what makes them tick. In the first 60 days after Nestio’s pivot, nearly all I did was shadow customers. In a few instances, I literally worked out of their offices.
I spent whole weeks elbow-to-elbow with landlords, poring over Excel spreadsheets and trying to understand what metrics mattered to them and why. I interviewed everyone in the industry who was willing to talk, asking about their workflow and areas where they wished there was an easier way.
To some, this could probably be dismissed as a waste of time. But for me this was empathy R&D. It was a direct pipeline into what made our customers tick. Looking back, I couldn’t imagine a better use of my time. No less an authority than Virgin founder Richard Branson points out, “You can never have enough feedback and you can never stop learning.”
Putting empathy into practice
The real test of your empathy muscles, however, comes when it’s time to put these learnings into practice. At Nestio, we pooled all of our customer research into a brand new online platform. It wasn’t fancy or polished. In fact, it was the definition of a minimum viable product. But it allowed users to post and track apartment listings all from one online dashboard, instead of having to break out their spreadsheets and whiteboards.
We beta-tested the new product with many of the same customers we had shadowed and interviewed. It was a tense moment: the fruition of weeks of research and engineering work. But I’ll never forget one of the initial reactions: One of the landlords literally said, “Oh my god, this is so easy to use.” Weeks later, when we stopped for a follow-up visit with a major landlord, we saw our dashboard up on every computer in the office.
This isn’t to suggest that it was perfect. Far from it. Our first iteration was built from empathy but still had flaws. Users absolutely hated certain features and demanded new ones we hadn’t thought of. Instead of resisting this criticism, we welcomed it. We realized we had only just scratched the surface. In fact, when empathy is done right, these customer interviews and conversations never stop. You’re continuously gathering and responding to feedback to make your product better.
The only real failure is when you stop doing this. To cite a famous example: After a disastrous stretch in which Blackberry saw its revenue drop 56 percent, a former RIM insider said, “We believed we knew better what customers needed long-term than they did.” They lost empathy and short-circuited their feedback loop.
What’s the real payoff?
It’s all well and good to solve people’s problems. But businesses also exist to make money. What I’ve found most eye-opening of all, however, is how often these two things go hand-in-hand. Care for customers, first and foremost, and growth and profit follow.
Partly this is human nature. When you’re constantly talking with your customers and gathering feedback, you’re also cultivating rapport and confidence. This builds the kind of deep relationships that endure even when things don’t go exactly as planned. At the highest level, empathy actually reciprocates empathy. Your customers become your champions: rooting for you as your product evolves and improves.
An example: One of my earliest customers was Mirador Real Estate, a prominent residential brokerage in New York. Their managing partner, Karla Saladino, offered some of the most incisive and honest feedback about our initial iterations. Today, she’s a good friend and also one of our fiercest advocates. I’ve seen this sense of ownership from customers time and time again. They happily refer us to other clients, help us with promo videos and even do reference calls.
Without empathy, it’s hard to imagine this kind of dynamic. Of course, I don’t want to seem naive. Customer empathy can and should have limits (something I’ve learned the hard way). You simply can’t accommodate all customer feedback: Solutions need to be scalable and you can’t hijack your entire product roadmap just to satisfy one client. But oftentimes simply sharing this reality with customers is enough to resolve tensions and find a way forward.
In the end, empathy remains our North Star. It’s got the company to where it is today and will continue to guide us forward. And, on a personal level, it just feels like the right way to do business.
This article originally appeared in Observer. Do you think empathy is important in business? How do you practice it in your workplace? I’d love to hear your comments below! And if you liked this article, feel free to follow me here or on twitter @CarenMaio
