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Thursday, July 19, 2018

Emotional Marketing Driving Growth

Something we looked at in some detail, starting long ago.

How Emotional Marketing Can Drive Business Growth  in K@W

An image of an elegant Vermicular-brand Japanese rice cooker flashed on the screen at the Wharton Customer Analytics Conference. The speaker, Ridhima Raina, asked the audience how much they thought it cost.

After several guesses were ventured — most around a couple of hundred dollars — Raina said, “I’m from India and I eat a lot of rice. I would spend maybe $300 or $500. But on eBay, I checked this morning and it was $1,000.”

A leader in customer strategy and marketing practice at Bain & Company, Raina asserted that the main reason Vermicular can charge so much for its rice cooker compared to other brands is that the product spikes on what she called “elements of value.” It reflects two elements in particular, she said: sensory appeal, and design and aesthetics. By Bain’s calculations, these elements contribute an eye-opening 40% to the product’s Net Promoter Score (NPS), an index that measures how willing consumers would be to recommend a product to others. NPS is widely considered a key customer metric associated with customer lifetime value and revenue growth.

There might be additional value-based reasons for someone to pay top dollar for a rice cooker, Raina said. Investing that much money could be a motivation to prepare meals at home more often and to eat healthier. The product could provide a sense of well-being.

Identifying and putting numbers around how customers perceive the value of products is an ongoing project at Bain, said Raina. “Understanding value is hard,” she noted. Although the science of pricing has progressed greatly, our grasp of value hasn’t caught up, she said. While firms certainly are aware that customers have feelings and opinions about their products, there’s no established way to translate those often hard-to-define attitudes into what customers will be willing to pay, and ultimately into business success. .... "   (Later gets to the emotion point ... )

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