The Economics Of Emotion

Editor’s Note: This guest post was written by Alan Zorfas, the co-founder and CMO of Motista, a VC-backed consumer intelligence service. Prior to co-founding Motista, Alan spent 25 years in senior roles at advertising agencies like Interpublic Group, DBB, and Earle Palmer Brown.

The most recent commercial for the BMW i3 and i8 concept cars is a great example of something enlightened marketers have known for years: emotion is the key driver behind purchasing decisions. Yet, today, most businesspeople still follow the old adage, “Emotions and business don’t mix,” relying on rational data to drive decisions instead.

Doesn’t the advertisement make you want to buy a BMW? Don’t you want to feel cool or look more successful, technology-forward and progressive? Well, that desire is emotion at work. Steve Jobs inherently knew the emotion of his consumers was critical currency in building the Apple phenomenon, and with over 1,700 CMOs admitting that building an enduring connection with consumers is a top priority in a recent IBM survey, leveraging emotion is fast becoming a top business imperative.

Marketing performance is sub-par across the board, with everything from ad recall to customer loyalty declining. Adding fuel to the fire, customer satisfaction, the traditional gold standard for engagement, is not driving results anymore; and while there’s still great value in traditional market research, it’s too slow and too costly in today’s fast-paced world when marketers need actionable data now. The economics of emotion are so powerful in driving consumers to buy, pay more and spread the word that leading companies are already replacing customer satisfaction with “emotional connection” as a KPI.

New solutions that tap into and measure human emotion are spawning, and emotion has become a
trending topic in Silicon Valley with VCs like Vinod Khosla actively watching this space. Let’s take a look at several solutions forming around emotion, making it more accessible and actionable:


According to Wikipedia, “neuromarketing … studies consumers’ sensorimotor, cognitive and affective response to marketing stimuli.” Researchers essentially connect sensors to a person and monitor brain activity. It can help marketers deduce why a person found an ad to be interesting by mapping what areas of the brain were stimulated by the ad. For example, an increase in activity of the temporal lobe means that the brain was stimulated by sound or rhythm.

This type of research unearths what consumers find stimulating, but what exactly can be done with it? You can certainly learn that there is a response and the nature of it, helping marketers sift through and compare stimuli, e.g., commercials. If I understand consumers found the audio in my advertisement interesting, does that mean I should always use that music? If a Ke$ha song stimulates brain activity, then I should play Ke$ha all the time! Well, maybe not.

While neuromarketing is scientific and helps marketers replace a lot of guesswork, it doesn’t tell marketers on the front-end of developing a new strategy or campaign what feeling or emotion needs to be evoked – what’s the impetus (back to the BMW making me feel cool and look successful) to get consumers to buy.

Social data:

You can’t have a conversation about marketing these days without mentioning social media. It pervades everything, especially in Silicon Valley. In the brand planning rooms of Fortune 500 companies, social media findings are an interesting read on chatter and opinion, but fail to unearth the powerful insights that drive consumers and breakthrough marketing campaigns. Social data can reveal consumer preferences, feedback on products, and ratings, and, of course, social media response to a new product launch or campaign can boost performance. Thus, many more companies are measuring social sentiment with services such as Radian6, which was recently acquired by

Although social information can tell marketers what the hot trends are in the moment, social media doesn’t reveal the true “why.” I am unlikely to tweet “I want that new BMW because it’s going to make me feel cool and hip and project that I am successful.” Would you tweet that? Consider this beyond the Ultimate Driving Machine and try to figure out what really motivates someone to choose a bank, a new tablet or a retail store. Emotion is the strongest driver of choice, loyalty and advocacy. This is what marketers are really searching for.

Behavioral analytics:

Many companies are using behavioral analytics, also known as personalization, to better serve consumers. Netflix and Amazon popularized the concept of using previous buying history and profile information to recommend products to their customers and, in a lot of cases, it works! If I add a digital camera to my shopping cart, I will probably be interested in the camera case my online retailer suggests. This kind of intelligence can vastly improve online retailing, both for the consumer and the marketer.

Recently, personalization has shifted from just making product recommendations based on buying history to trying to predict a consumer’s next action. Micro-behaviors on the web, such as mouse hovers, search terms and scrolls, are being used in an attempt to predict future engagement. Those behaviors certainly help marketers better merchandise selection to shoppers and capture their preferences.

What this intelligence can’t tell you is the “why?” By understanding the real motivations of consumers — not just their on-screen behaviors—marketers can surprise and excite shoppers beyond their expectations. Empathizing with their deeper needs communicates to the consumer, “They get me.” That’s stickiness.

Connection intelligence:

Connection Intelligence is about understanding the emotions that motivate consumer behavior — the unstated “why.”

A convertible makes me feel young. My bank makes me more confident. Johnson & Johnson make me feel like a better parent. Leveraging these emotional motivations helps brands better attract their target audiences and build long-lasting relationships that pay dividends over many years. And, the dividends are big.

Recent data from Motista illustrated the top emotional drivers behind retail purchases in 2011 Q4 were more motivated by “fun” and “comfort in life,” reflecting an emotional need they want from their retailers. The data also compared satisfied consumers to emotionally connected consumers, and forty-six percent of emotionally connected shoppers indicated they always shop a particular retailer first compared to only 13 percent of “satisfied” shoppers. In other words, emotionally connected shoppers are four times more likely to shop a particular retailer first (see graph below)!

Emotional connection isn’t restricted to the retail industry. Consider the red-hot tablet market, where emotionally connected users are twice as likely to buy another tablet from their brand, and five times more likely to pay a higher price.

Within this context, it’s easy to understand why companies are so interested in operationalizing emotion, as understanding the underlying emotional motivations of consumers provides insights into what messages should be included in a company’s next marketing campaign or delivered through the customer experience. In addition, knowing what tactics and touch points build emotional connection helps businesses make better spending decisions regarding different marketing channels.

Apple is the most valuable company in the world, in large part because Steve Jobs innately understood the importance of emotion ahead of the pack. Apple’s shareholders know exactly what the value is of having raving fans and advocates. With intelligence that helps all marketers understand and “act” on emotion in-hand, even business-minded decision-makers can make a logical decision to deploy “emotion,” now.

The economics of emotion are too large to ignore. With connection intelligence in marketers’ hands, there are no excuses to sit on the sidelines and simply admire Apple, BMW, Nike and others. It’s time to get in the game.

Image from Pietroformica/Techspage