This piece was originally published in SmartBrief.
Intelligence is the ability to gather information and apply it to the human experience. This was true when silicon was just a shiny rock, and it’s true now that machines are becoming more intelligent. Businesses today need to deliver a different kind of intelligence: a high emotional quotient (EQ), which Harvard theorist Howard Gardner describes as the ability to understand what motivates another person and how to meet their needs.
EQ (otherwise known as emotional intelligence) is mostly used to describe people—a friend’s ability to empathize with a difficult situation, a manager adapting her approach to an employee’s work style, or a salesperson relating to a potential buyer. It turns out that EQ is also important for businesses. Emotionally connected customers are more than twice as valuable over their lifetime as highly satisfied customers who don’t feel such a connection.
For businesses, EQ is more relevant than ever. More companies are gaining efficiency by introducing self-service technologies, whether it’s on a website, through an app, via chatbot or voice assistant or at a kiosk. According to Adobe’s research, 64% of people say they can be delighted by an automated interaction if it’s done well. Yet a human touch is important for building trust and connecting with customers. In a 2018 survey by my company, consumers said EQ is best established in person (80%) or on the phone (49%) versus through artificial intelligence (24%) or a chatbot (22%). Automation works in the right settings, but businesses should approach these interactions thoughtfully.
Context matters. When making a small or relatively simple purchase like toothpaste or a t-shirt, we’re usually motivated by convenience—doing it quickly, easily and from anywhere. But when it comes to larger or more complicated purchases where more is at stake, like a car or a mortgage, we value confidence more than convenience. We want someone to validate that we’re making the right choice, which often involves a one-on-one conversation.
That is not to say complex and anxiety-inducing purchases can’t be automated. Take the example of buying a home, which is the biggest and most stressful purchase most of us will make in our lives. The decision involves profound financial and emotional implications, including how and where to raise children. Getting a mortgage typically involves reams of paperwork and time waiting to be approved. Fortunately, loan providers are automating the process—the Rocket Mortgage app, for example, allows customers who qualify to get a mortgage within 24 hours. Its simplicity and speed are only possible because the process is automated, but Rocket Mortgage offers human assistance at every step of the way via phone and online chat.
Recent research backs up the notion that consumers want human reassurance during moments of high anxiety. A study by Michelle Shell and Ryan Buell of Harvard Business School found that anxious customers who use a self-service technology (like an online investing platform or an automated text service for loan updates) end up trusting the provider less and feeling less satisfied with their decisions. Yet anxious customers who use the same technology but have the option to talk to a real person do not report the same effects.
Even if customers don’t end up choosing to talk to a human, the option is important. The Harvard study found that “merely having the option to access a person seemed to be all most people needed to feel supported.” This takeaway is especially important for businesses in industries like financial services and health care, where the stakes are high, as is the potential for customer anxiety and uncertainty.
To demonstrate EQ, businesses should think about how they’re building trust with their customers and putting them at ease. My local coffee shop and dry cleaner don’t need to go out of their way to make me feel that we have a connection. But a company I’ve never encountered or rarely do business with needs to work a lot harder to gain my trust. If I’m going to buy an insurance policy through an app, as tech companies like Lemonade make possible through bots and machine learning, it’s critical that I feel the brand understands what motivated me to reach out, meets my expectations, and makes me feel supported. More and more, businesses have access to data and tools that make this personalization possible.
Transparency is also critical to building trust and lasting relationships with customers. Many of us regularly interact with businesses through a combination of human and digital service, whether it’s getting help with our taxes, buying a new phone plan or contacting customer support. Whether the service is automated or not, it should always be clear from the beginning of the call or chat whether a human or AI is on the other side of the conversation. In California, it became a law to do so.
The balance of automation and human touch will only become more important to strike. AI won’t replace humans any time soon, but machines are getting better at parsing emotions—Amazon, for instance, is upgradingAlexa to understand frustrated tones of voice. While automation plays a role in serving customers, businesses should view it as a complement to human interaction, not a substitute.