Don’t Just Digitize—Humanize

A company’s digital future will depend on creating emotional bonds with consumers.

Don’t Just Digitize—Humanize

Digital disrupters have generated shareholder value beyond anyone’s dreams through new business models.

Transportation has its Ubers, retail its Amazons and Alibabas, hospitality its Airbnbs—all businesses leveraging platform economics for major advantages in cost, selection, immediacy, and service levels. Not surprisingly, in our recent survey of 3,500 consumers, the data bears out the strength of the model. These digital leaders enjoy significant superiority in the functional benefits they deliver to customers, scoring 50% higher on critical attributes, such as saving time, making life easier, and providing customization.

But there’s a catch. When we asked how most do on softer attributes, such as caring for, listening to, and being on their customers’ side, digital leaders are merely at parity. And their resultant loyalty scores are not significantly higher. Our data shows Facebook, YouTube, Twitter, Uber, and Airbnb have loyalty rankings of 30% or lower, compared to 40% for Disney, 50% for American Express, and 65% for USAA. So while many digital businesses have created massive customer value, there is a risk that they are potentially fleeting utilities.

Emotional connection matters. One recent study confirmed that brands with strong emotional engagement enjoy 50% higher customer value over their peers. If people don’t have that kind of connection with your business, they’ll drop you as quickly as they dropped their travel agent. Or their bookstore. Or their yellow cab.

But more to the point, the kind of human connection that drives lasting value is exactly what technology is ideally suited to deliver and is ultimately destined to do: Listening more, remembering better, knowing more deeply.

Technology’s toolkit for emotional connection is growing by leaps and bounds. Soon people will be perpetually and seamlessly connected to networks through their clothes, their wearables, their biometric data, their presence, and their preferences, which will be recognized everywhere and anywhere. Hunching over screens will give way to human dialogue-based interactions with Alexa and Viv. Intelligent AI will anticipate needs that have not been conceived of, and virtual worlds will immerse people in richer experiences.

A new mindset is required, one that focuses as much on the emotional as the functional. One that asks what do people really want—emotionally—and how can digital deliver? To begin, brands should look at these four fundamental human needs:

At the heart of this deeper intimacy is an information exchange, the creation of bonds that depend on a trusted level of sharing.

But here the data tells another important story. Customers were asked the simple question: Do you trust this brand with your data? Digital leaders averaged only one out of three customers who said yes. Dispersion across companies ranged from 14% to 62%, with social network leaders averaging in the low teens. Truly creating the connections will require a deeper lever of trust than that existing in most businesses today.

The lure of digital technologies is that of scale. We can grow user bases overnight, test new ideas instantly, and improve offerings through perpetual cycles of optimization. But the risk is, we lose the human in the data. Long term, technology’s promise isn’t efficiency; it’s actually intimacy. Once that is achieved, today’s functional advantage will be accompanied and eclipsed by tomorrow’s lasting emotional bonds.