- Empathetic is an adjective that describes someone or something that exhibits empathy.
- Empathy is a high degree of understanding of other people’s emotions.
- Empathetic and empathic are interchangeable, but sympathetic has a slightly different meaning.
Empathetic is an adjective that describes someone who is characterized by empathy. Empathy is the root word here, so you can’t define empathetic without first understanding what empathy is. Can you think of a time when you felt an emotion because someone else was feeling it at the time? Maybe you felt a sense of defeat when your best friend didn’t get into the college of her choice. Perhaps you felt nervous when your brother tried out for a singing competition on TV. If so, you know what empathy is and you can be described as empathetic. The words empathetic and empathic mean the same thing. Empathic is the older word, but not by much — it was first used in 1909, while the first recorded of use of empathetic is from 1932. Both words are derived from empathy, and you can use them interchangeably. In scientific writing, empathic is more common. It’s also the term that people associate with New Age teaching and theories because it reminds them of “empath,” a word that hasn’t yet made it into the major English dictionaries.
Here’s a scenario that’s all too familiar for many consumers today. It’s been an unusually hot spring. A homeowner receives a monthly electric bill twice as high as she’s used to for this time of year. She wonders how she’ll pay the bill — and all her other bills — and continue to save for the new car she knows she’ll need in a couple of years.
How does an empathic bank respond to a scenario like this one?
The empathic bank already knows about its customer’s dilemma because it uses digital technologies to sense business moments such as the arrival of the high utility bill. In this case, the bank receives data from the government meteorological service predicting higher-than-normal temperatures. The bank then analyzes current and past customer electricity bill payment data and discovers that a majority of its customers’ bills are at least 25% higher this month than for the same period during the previous two years. (The obvious explanation: People are using air conditioning more.) This conclusion triggers further analysis of other individual customers’ cash flows, scheduled bill payments and history of electric utility payments.
Based on these analyses, the bank uses the customer’s preferred channel to offer her a short-term consumer loan to help her pay her high utility bills for the spring. This offer uses existing information about the customer and the imaging capabilities of her smartphone to enable her to provide the bank with required documents, if necessary. Multichannel integration enables her to engage with the bank through any channel or on any device that is convenient for her at the time — whether through a customer service representative at the contact center or branch, or via the bank’s smartphone app.
The result: The customer is not left to solve her problem alone. This is the concept Gartner has identified as empathic banking.
The empathic bank can also leverage this business moment and its digital and analytical capabilities to make a corresponding offering to the customer’s electric utility. It can, for example, offer the utility additional cash management and other services to reduce collection costs and improve its cash flow. The differences between traditional and empathic banking are summarized in following figure.
Empathy is sometimes confused with sympathy, but there’s an important difference. Both are concerned with the feelings, thoughts or experiences of another, but sympathy simply inspires feelings of compassion or a sense of regret or sorrow for the customer. Empathy goes further. It involves the ability to share another person’s feelings as if they were your own. In the banking context, empathy drives the bank to recognize its customers’ challenges or situations and help to do something about them. Empathic banking uses digital technology to identify important moments in customers’ lives and trigger actions to support them.
Traditional banks can express sympathy for customers, but still not be compelled to take any action. Empathic banks use digital technology to identify business moments in their customers’ lives and trigger actions to support them. An empathic bank can use a digital banking platform as a foundation to:
- Orchestrate these business moments, triggers and interactions with customers (all customers, not just retail customers)
- Integrate with core and traditional CRM systems and data analytics
- Bring in third-party data to identify business moments that trigger actions
Digital technology that enables the bank to meet specific customer needs makes banking easier for all customers, and points the bank toward transformative digital experiences that generate new revenue. Most banks have some relationship with their customers of all types — whether consumer, small business, commercial or high-net-worth. Customers seek out the bank to address a business or personal situation or problem, or to answer a question. Banks reach out to customers via a variety of methods, relationship managers, and other customer-facing staff and devices using marketing materials that rely on traditional segmentation to offer services to customers. Bank staff are often unaware of the customers’ actual financial needs and goals, some of which may be embedded in customers’ own account data or in financial management tools (such as consumer personal financial management [PFM] budget or savings goal tools, or business cash management). Many banks have developed “360-degree views” of their customers, primarily based on their product and service relationships to the bank — that is, how many products and services they have and use. To create a digitally empathic relationship with bank customers, however, the bank must step away from this asynchronous approach to customer engagement and develop an empathic understanding of the customer. This empathic understanding goes beyond this traditional “view of the customer” — typically which products the customer uses, whether the customer has accepted cross-selling or upselling of new product offerings, and which segment the customer falls into. This understanding may be based on potential life cycle events (e.g., marriage, birth of a child or retirement) or actual events (if the bank is able to capture this information).
The foundation for developing an empathic relationship with the customer is the ability to identify business moments that trigger questions, problems, conflicts and opportunities. While life cycle events may trigger business moments, they are just one source of such triggers. To be empathic with customers, banks must discover other potential business moment triggers that can lead to additional customer engagement and services. The potential number of business moment triggers is unlimited.
I’ve been very obsessed with “experience” and written series of post which I think might be good to read them (or you can skip them) as listed in below:
- Driven vs Centric — An article on “Data-Driven and Data-Centric” and “Customer-Driven and Customer-Centric”
- Core Values — An article on why core values boost employee experience
- Agile Organization — An article on how to transform and why needs to be agile
- ReThinking HR — An article on how HR department can cause employee experience
- Culture Framework — A methodology on how to build corporate culture
- Thinking Better — An approach to think and transform systematically
- Experience — A post on what is Experience
- Engineering Experience — A framework on building experience
- Know-* Management Team — An article on how to build a management team
- Core Values are not simply your DNA — Trying to go a bit deeper on what’s core value
- Experience Engineering by Digital Transformation — Building an experience using technology
- Components of Experience, the key components of building an experience
- Organizational Barriers to Delivering Customer Experience, what are the key barriers to build a good experience within each organization
- Brand and Customer Experience, sharing how employee and customer engagement are connected when it comes to building an experience
- Pricing for Better Experience. Finding the right balance between value and revenue — your ability to help customers and be fairly compensated for that help — will make or break a SaaS company
- Employee Stock Options Plans (ESOP). Having ESOP, in short, means employees are directly invested in the company’s future. It’s simple — happier employees make happier customers. Those employees who hold ESOP work on average 8 hours more per week (416 hours a year which is equal to ~35 extra days of 12 hours per day in a year) than those that do not own ESOP (of course quality is more important but quantity of hours matter too).