ADDING EMOTIONAL VALUE TO YOUR CUSTOMERS'' EXPERIENCE Janelle''s dentist recently moved to another town some distance from her home. Nonetheless, she travels to see him because of how she emotionally feels under his care. His rates are higher, and she has to drive almost fifteen miles farther to his office. Does the emotional connection that Janelle feels to her dentist and his assistants contribute to his bottom line? It is difficult, if not impossible, to exactly measure the monetary worth of emotional value, but it is definitely part of what service providers and organizations offer--and it is one of the largest drivers of customer loyalty. The ability to retain customers and sell more to them is, according to many business experts, the single most important predictor of economic success today. Why does Nordstrom, the big Seattle, Washington-based department store chain, do so well, even with higher prices and fewer special sales, earning more per square foot than other similar operations? Talk with "Nordies" and they will tell you that it is not just their liberal return policy. Actually, many department stores have copied the Nordstrom guarantee on 2returned merchandise. It''s the way customers feel when they return items to Nordstrom.

There are few hassles and limited negative emotions. Emotional value is the economic worth of feelings. We define emotional value as the economic value or monetary worth of feelings when customers positively experience an organization''s products and/or services. Emotional value, as much as quality or any other dimension of an organization''s worth, can make or break a business. It is as concrete as that. Cathay Pacific, the Hong Kong-based airline, found that the specific words used to settle lost luggage claims or handle other complaints were more important than the timeliness, accuracy, or compensation of the settlement in determining whether passengers would fly with the airline again.1 This is a finding that should make everyone involved in business sit up and pay attention. Emotional value refers to the feelings that customers experience or anticipate experiencing when they deal with organizations and their representatives.

These feelings create a desire in customers to want to return to a place of business or go away and never come back. Emotional value is a concept that is ultimately more connected to customer retention than anything else. It is also the value that a company possesses when staff prefer to stay with their employers because of the feelings they have while working. Both staff and customers tend to stay with organizations that enable them to experience positive, meaningful, and personally important feelings, even if the organizations cannot always provide everything they want or solve all their problems.2 Most customers know instantly how they are emotionally impacted and how they feel about that, if not precisely, then generally, from the moment they walk into a place of business until they leave--with or without a purchase. In order to match the growing and inherent emotional sophistication of customers, service providers must upgrade their own emotional offerings to maintain a distinct competitive advantage. The Experience Economy Within easy historical memory, we have seen an evolution from an agricultural to a manufacturing economy. The manufacturing economy, still 3struggling with quality issues, has given way to the service economy.

The service economy is in its early phases, and as we look closely at the service economy and its implications, we see that there are levels and nuances of service that most businesses have yet to attain. These include the careful introduction of competent emotional sensitivity. At one extreme end, service will have to support the orchestrated theatrical experiences referred to by Joseph Pine and James Gilmore in their new and groundbreaking book, The Experience Economy. One of the major characteristics of the experience economy, according to Pine and Gilmore, is that customers become engaged in a "personal way," requiring high levels of emotional competency from experience providers. Customers want and expect to be positively, emotionally, and memorably impacted at every level of their commercial existence. Pine and Gilmore distinguish the products of the different types of economies in the following way: "While commodities are fungible, goods tangible, and services intangible, experiences are memorable." 3 They make a compelling case that more and more of today''s customers want and expect to be positively, emotionally, and memorably impacted at every level of their commercial existence. Whether or not most products or services in the future will be offered as themed experiences, as Pine and Gilmore use the term, a higher level of emotional competence will be required for the service economy also.

Pine and Gilmore argue that the shift to the experience economy is happening, in part, because large numbers of products run the risk of becoming "commoditized," and commodities in a free-market economy do not enjoy high profit margins. To prevent products from becoming commodities, they contend, it is not enough for an organization to focus on products or services alone. In this book, we suggest that most companies haven''t yet fully taken advantage of the power of emotionally sensitive service, let alone evolved to themed productions for customers. Perhaps it will be to an organization''s advantage to create themed experiences for its customers, but it first needs to master service that is emotionally competent. It is our assessment that most companies have not 4taken full advantage of the economic possibilities stemming from retaining customers by adding emotional value. Customers always form judgments when they interact with organizations and staff. By filtering and processing sensory information, customers form emotional impressions (popularly referred to as Moments of Truth [MOTs]) that help them to remember and distinguish one experience from another.4 These sensory service clues, many of which have a strong emotional component, need to be understood, managed, and ultimately delivered by individuals.

This book focuses on the role of emotions in the customer experience and how individuals can provide emotional value to their customers so they are inclined to return. We assert that adding emotional value to customers'' experiences is one of the strongest competitive advantages and requires not only upgrading staff emotional competency but also upgrading business operations so they positively impact emotions within organizations. If we are to move to an experience economy for customers, we have to create an "experience" work environment for staff. If we are to move to an experience economy for customers, we have to create an "experience" work environment for staff. In the 1980s, the quality concept quickly included personal quality, once organizations understood it was very difficult for workers to produce high quality goods if they did not have high personal quality standards. Likewise, service, as a concept, dramatically shifted once the concept of "customer" included both internal and external customers. Once businesses understood that external customers were treated pretty much the same way as internal customers, they began to focus on "internal service." Retention of external customers has a lot to do with retaining internal staff.

Most jobs in the developed world today are service positions. By the early 2000s, a stunning 80 percent of jobs in the United States will be service related--from fast-food workers, support staff, retail workers, and hospitality and travel employees to highly trained professionals--all demanding huge numbers of staff who can positively impact customers or clients memorably. We are aware of the confusion regarding service job statistics, some showing very high percentages and others much lower. Part of the disparity 5in these numbers depends on how broadly "service" is defined. The U.S. government tends to define service more narrowly than some; even so, U.S.

government projections are that the highest job growth is expected in four sectors: retail trade, business services, health services, and educational services. These sectors will account for two-thirds of the total number of created jobs in the first five years of the new millennium. At the turn of the twenty-first century, nine of the top ten job prospects in Minnesota will be found in the service industry. In the heavily industrial states such as Ohio and Michigan, the economy is also diversifying and shifting to service, moving away from manufacturing. The farming states are also seeing the creation of more service positions.5 To be competitive in today''s economy, businesses need to produce a distinctive personal and emotional experience for each of their customers. No longer can service providers and service systems merely perform functions for customers. To be competitive in today''s economy, businesses need to produce a distinctive personal and emotional experience for each of their customers.

As a result, staff need to know how to interact in an emotionally intelligent manner and must possess a knack for listening to people, for showing empathy, and for "owning the problem" of enabling customers to feel positive emotions while using their products and services. They must be competent in delivering the highest quality of emotional interactions and feel good about the time they spend with their customers--whether the experience is a short-lived encounter, such as purchasing a hamburger at McDonald''s, or a long-term relationship, such as buying insurance from an agent. When service positi.