Drive to Reimagine

What Empathy and Trust got to do with profit?

Musa Hanhan
Mar 16
6-7 mins

Table of contents

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What Empathy and Trust got to do with profit

Many customer experience transformations failed because they didn’t create value. While management and CX leaders understand the benefits of being a customer-centric organization—more engaged employees, increased customer satisfaction and loyalty, and lower cost to serve—they can overlook the value to their customers in having a long, lasting relationship with their business.

It takes two to tango, and it’s the same with building long-term relationships. Let's examine what it means to have a relationship with a brand from the customer's point of view.

  • I am getting value from this relationship.Defining value is not easy as human behavior. Emotions, needs, and wants in a particular time can change from one interaction to another. Maxie Schmidt-Subramanian from Forrester explains that the value of experience depends on the benefit that the customer perceives on a functional, economic, experiential, and/or symbolic level; and the tradeoff of getting vs. giving up.[Maxie Schmidt-Subramanian, Forrester]
  • The organization makes me feel special. It knows me.Connected experiences have a lasting and memorable impact on the customers. According to Forrester's US Customer Experience Index (CX Index™) 2020, when an organization makes customers feel appreciated, 76% indicate they'll keep their business with the brand, 80% say they will spend more with the brand, and 87% will recommend the brand to friends and family members.
  • I get a quick response when I encounter an issue and empathize to understand the situation.Loyal customers forgive their brands for their mistakes, but they expect to get their issues addressed and receive transparent communications. "60% percent said they will forgive three or more mistakes from their favorite brand, so long as those mistakes are corrected to their satisfaction, according to the Deloitte Create Human Connection at Enterprise Scale 2020 Report.
  • It makes me feel I am part of the community and getting useful and consistent communication.Customers want to belong to a brand that can bring other customers together for a common cause and communicate to each customer as if they are the only customer. Your brand community becomes your competitive advantage.

The challenge is how to scale and build long-term relationships with your customers that benefit all parties involved—customers, employees, partners, and shareholders.

4 elements in building long-term relationships that convert into value for your customers and profit to your organization.


Know Your Customer

At the heart of this effort is knowing who your customers are, their needs and wants, their challenges, and what they value. To know what your customers’ value at functional, economic, experiential, or symbolic levels you need to to map their values, emotions, and experiences on key touchpoints. The more specific and deliberate your understanding of their behavior and emotions, the more you know about how your customers interact with your organization and can anticipate their desires.  

Keep your mapping current by bringing your Voice of the Customer practice closer to your work and collect all solicited and unsolicited feedback from every touchpoint where customers interact with your brand.


Collect Data and Insights

There are different types of data that you are collecting, beginning with the customer needs and wants described in the previous section, which helps you understand the kind of products and services customers are attracted to.

There is the behavioral data collected from customers while they interact with your organization at different touchpoints or journeys. This allows you to understand how customers interact and the steps they take to decide to buy or get service. It is far from linear as it usually involves multiple channels from physical to digital and mobile.

Using Artificial Intelligence to pinpoint reliable behavioral patterns that customers exhibit while choosing products and services can help you focus your effort and provide customers precisely what they want in a personalized way.


Deliver Personalization

Mom-and-Pop businesses know their customers on an individual level, which larger businesses try to re-create with personalized experiences. Recently, Peter Schwartz, a strategist, and chief futurist at Salesforce said that companies are once again shaping their selling experience to fit each customer individually.

According to Salesforce 2020 4th Edition State of Connected Customer report, "52% of customers expect offers to always be personalized — up from 49% in 2019."

The Deloitte 2019 research report, “Exploring the value of emotion-driven engagement," showed that consumers prefer brand experiences that feel personal and that mirror the qualities of human friendship —qualities like listening to feedback, responding to requests, adapting communications, and connecting prior experiences with the current context in ways that feel intuitive, empathetic, respectful and consistent.

As part of delivering connected experiences, anticipating customers' needs enable you to consistently provide personalized product and service experiences that exceed expectations and create loyal customers.

With the data you have collected, you can identify a specific a segment, within a particular persona, within a particular behavior, and then design tailored experiences for their needs and habits. Thanks to advancements in technology, we will see more of this type of experience in the next few years.

Besides designing, collecting, and planning, ultimately, your connected experiences depend on the employees who deliver them.


Customer Culture Mindset

To provide those personalized experiences, you need to have a culture and mindset that aid their delivery. You want to connect employee behavior and daily work to the outcome, which will inspire them to strive for higher performance levels. Employees are empowered to do the right thing for the customer. Effective and consistent communication and employee training create a mindset for delivering greater experiences to customers with empathy. When there is an issue, the employees address it quickly.

2020 gave us the crystal ball on becoming truly customer-centric – empathy, trust, and being easy to do business with are critical ingredients in any customer-centric organization.  

a. Easy to do business with 

This has two sides—one from your employee perspective and one from your customer perspective. Make it easy for employees to do their job with the tools, processes, and training to empower them to deliver connected experiences.

"If we consistently exceed the expectations of employees, they will consistently exceed the expectations of our customers." — Shep Hyken

From the customer side, they want to be able to interact with your brand on a personal level and in a transparent way. Having processes, procedures, and policies that are effective, efficient, proactive, and anticipatory in their approach will make your customers gasp with admiration.

According to Salesforce 4th Edition State of the Connected Customer report, "80% of the business buyers and 66% of consumers expect consistent interactions across departments. And 69% of business buyers and 54% of consumers expect companies to engage proactively. Furthermore, 67% of business buyers and 54% of consumers expect companies to anticipate their needs.”

b. Empathy

The impact of empathy on the customer experience was a focus of the COVID-19 period. According to the Salesforce 4th Edition State of Service report in 2020, "71% of consumers say that businesses that show empathy during the pandemic have earned their loyalty.

Empathy also applies to the business buyer. According to Salesforce 4th Edition State of the Connected Customer report, "73% of business buyers expect brands to demonstrate empathy.

More than ever, connected experiences depend on the human factor, which requires customer-centric organizations to focus on open, transparent communication and empower their employees to do the right thing for their customers. Those organizations have built a supporting system from management, culture, training, and tools to processes and cultivating an ownership culture. The Salesforce 4th Edition State of Service report found 71% of employees felt encouraged by management to be flexible with customers while 70% of employees have received training on how to be empathetic with customers.

The brands who master delivering empathy to their customers are the ones who reap the reward.

c. Trust

Customers put a real value on trust. And as CX practitioners and leaders, we are all well aware loyalty is built on trust. Building trust takes effort and time to build, enhance, and develop into a long-term relationship. With the increased demand for hyper-personalization, customers expect your brand to be authentic, respond to their concerns, and be accountable for mishaps. Lately, customers even demand that you take a stand on relevant social and cultural topics. Your future success may depend on it.

Trusted brands are more likely to be forgiven than the less trusted bands. The Deloitte, Create Human Connection at Enterprise Scale 2020 Report found that 63% percent of customers are more likely to forgive a mistake by a long-term favorite brand than a brand they have only done business with for a year or less.

And strikingly, "93% of customers say trusting a company makes them more likely to recommend that company. And "92% are more likely to purchase additional products and services from trusted businesses." according to the Salesforce 2018 Trends in Customer Trust Research Report.

What are the indicators of profitability?  

Now, let's shift the focus on connecting the relationships between the four elements we have discussed so far to financial customer experiences metrics that your organization can use to navigate your business.

  • When the customer gets value from the relationship, they will stay, which will be reflected in a high retention metric.
  • By the same token, when they are happy with their relationship, they will tell their friends and family. Here, the referral metric comes into the picture, measuring the new customer joining the organization by referral from an existing customer.
  • They are also most likely to repurchase and buy other products and services from different categories. This translates to an increase in sales growth metrics which executives and finance teams watch very closely.
  • As they are staying, the cost of service metric decreases since it measures the cost of keeping existing customers.
  • And the cost of the acquisition metric also decreases since existing customers are referring new customers to your brand.

Put all those metrics together and you have the customer lifetime value (CLV) metric, which serves as an indication of your business health.

There is a direct correlation between how you manage your customers and the pay-off from maintaining a robust and lasting relationship with them.

What does your customer lifetime value metric show about your customer relationships?  If it’s not where you want it to be, start with the steps we’ve discussed here.

Musa Hanhan

Musa Hanhan is the founder and Managing Partner of Xperiente, a consultancy agency that helps its clients create better experiences.  

Musa is a tireless advocate for a great customer and user experience with 20+ years of experience.

He is a creative Customer Experience Executive Leader. He creates a world-class customer experience that is exhibited in many current and past successes in designing and engineering solutions that have enhanced customer trust and loyalty.

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