Study Finds that Customer Empathy Usually Goes Amiss

Posted by John Bennett on April 14, 2015

Financial institutions of all sizes are focused on improving the customer experience.

Many institutions have adopted strategic objectives to do a better job listening to customers, soliciting their opinions, and understanding their needs. Inevitably, this activity leads FI employees—everyone from managers to branch staff to customer service representatives—to put themselves imaginatively in the shoes of their customers. In other words, it makes employees empathetic.

But is empathy a trustworthy way of understanding customers?

All too often, the answer is no.

That’s the conclusion of a new study described in a recent issue of Harvard Business Review.

Dr. Johannes Hattula and his co-researchers at Imperial College in London conducted a series of experiments designed to measure marketing managers’ ability to keep their own preferences distinct from those of the customers they were empathizing with. First, the team queried managers about their own preferences. Then they primed some managers to be empathetic. Finally, they asked the manager to imagine a customer’s thoughts and reactions to particular product or services. And the result? “Empathetic” managers turned out to be more egocentric, projecting their own preferences onto the customer.

According to Dr. Hattula:

“The effect was consistent. The more empathetic managers were, the more they used their personal preferences to predict what customers would want. Another key finding that should get people’s attention is that the more empathetic managers were, the more they ignored the market research on customers that we provided them … 
In every case, predictions about what customers wanted matched the managers’ personal preference more closely when the managers had been primed to be more empathetic.”

The effect was consistent, regardless of the managers’ experience.

What can managers do to offset this bias?

First, they can be aware that the bias exists.

“In another experiment we seemed to mitigate the effect simply by making people aware of their bias,” says Hattula.

Second, managers can purposely make decisions in groups, especially if those groups are composed of individuals with different opinions.

“With a group you would get different, perhaps opposing opinions and realize that you were predisposed to think about yourself just from hearing others talk about experiences that are different from yours,” says Hattula. He points out that Warren Buffet uses a group approach like this when considering investments.

Finally, managers can pay attention to market research data.

As an organization that has seen time and time again the value of analyzing profitability patterns among customer populations, we think all three approaches—self-awareness, group decision-making, and hard data—are worth pursuing.

 

 

 

 

 

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