peter boat wright- built to love (unplugged)

8/7/2019 Peter Boat Wright- Built To Love (Unplugged)

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BUILT TO LOVE (Unplugge A conversation between Peter Boatwright & Moe A

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Built to Love (Unplugged) Peter Boatwright with Moe Abdou

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About Peter Boatwright & Moe Abdou

Peter Boatwright

Peter Boatwright, Ph. D. , is Associate Professor of Marketing at theTepper School of Business at Carnegie Mellon University. His expertiseand teaching focus on innovation, new product marketing, brandstrategy, and marketing research methods. In his research, Prof.Boatwright has developed new statistical methods and additional theoriesof consumer behavior.

Moe Abdou

Moe Abdou is the creator of 33voices — a global conversation about things

that matter in business and in life. [email protected]

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I’m really, excited to have this opportunity to talk with you guys thismorning about something, as I mentioned to you both, that has really inspired me.

As someone who has come more from the corporate perspective, emotionhas long been the lever that drives all human beings. Yet, I see that it’slargely been ignored in boardrooms. Whenever I have been involved inboardrooms talking about product development or this whole notion of innovation, rarely do I hear anybody talk about emotion. And then I get theopportunity to look at your book and I start to get really excited becausethat’s what resonates with me.

So my question to you initially is, are you guys starting to see a shift inthat? Specifically in corporate boardrooms where maybe one day emotionis going to be alongside, how do we make the performance of our products

better and faster?

I think the shift that we’re observing right now is a shift in interest. People arestarting to ask questions about how do you do this. Metrics is an issue thatactually brought us to writing this book in the first place because executivesare recognizing people are driven by emotion both at a point of purchasebut also from their pleasure and enjoyment of using a product . If that is abig part of the experience of a product, how do you measure that so you couldmake sure that you build the right thing?

I think there is an interesting issue in management and that there are managersthat get it. They see that emotions are really important and as you said,certain companies in the boardroom, that’s the case. They embrace it and youcan see that in their products. But there are a lot of people out there; they’retrying to figure it out. What’s going on here? Why is this important? Is thissomething that’s profitable? Does it really matter?

That was part of why we wrote the book as well. But it’s also part of themomentum in terms of what you’re talking about, in terms of the shift that wethink is hopefully going to start to happen more and more, and that peoplerecognize that emotion is critical to the long term success of their product.

Peter, how do you stimulate that emotion? How do you start thatconversation with a corporation or a business that’s interested in startingto think about this?

I know that you guys outlined a terrific process in your book but let’s justtalk about conversation starters. I belong to a lot of think tanks,

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mastermind groups that I participate in primarily for entrepreneurialcompanies. Again, we talk about innovation a lot but it doesn’t seem to betriggered by this emotional context.

So if you were sitting in one of those mastermind groups with us and youwanted us to start to shift our thinking towards this whole notion of emotion that we all know drives us, where do we start?

The first thing is to help people at least get the importance of emotion with afew examples. One extreme example of a product is music. I mean, music is ahundred percent emotion. We divide up things in emotion versus function.Function is the part of getting things done; the features, the function, thetechnology. Emotion is the intangible experience part, also leading tobenefits that people enjoy. Music is an extreme product. It’s a hundredpercent in the intangible experience part of emotion. There is one example.

Then, pointing out that pretty much all products and services are some mixtureof the emotional side and the functional side.

So we start asking people to think about products that they love. Each personreally has one product that they greatly enjoy. And you start asking them whyand push them. The first thing that many people think about is the rationaleside because it accomplishes certain tasks. They might be thinking of theiriPhone - “It gets my email done. It’s easy to navigate the web.” Some of thesefeatures.

But then you start comparing it to the next best product and pure function -take their iPhone, and a lot of smart phones, a lot of Droid based phones thatdo roughly the same task. So the passion comes from something beyond thefunction. I think people immediately recognize that with some of the examplesfrom their own lives.

Jon, do you have anything to add on that?

Let me add that I think the other thing you can start to look at is reallysuccessful products. You’re talking about how to get people motivated torealize this is critical. Certainly, it’s a well-known example but look atessentially everything that Apple creates. They’re driven as much by emotionas they are by technology.

I’ll also mention, when we talk about products, we’re not just talking aboutconsumer products. We’re talking about services. We’re talking about businessto business products as well. So we can start to look at lots of examples in thatdomain as well. We explore quite a few of them in the book.

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Jonathan, this whole notion of design thinking has come to the forefrontespecially in the last four or five years. I know that that’s an area thatyou guys tackle as well in terms of designing products and even services.How does this whole notion of design thinking apply to the emotionalthinking that you guys are talking about in Built to Love?

Well, this is really part of what I would say is design thinking. As you said,design thinking as a term that has sort of emerged where people recognize thatyou really want to talk about designing anything and not just sort of thedetailed specifics as a concept especially among engineering and business usedto focus on.

But when we’re talking about designing a product and you’re really talkingabout innovation then emotion is a core part of that. I think the importantmessage is that the emotional desires and needs and wants of customers and

stakeholders should drive product development as much as, if not more so,than technological capabilities.

That isn’t to say technology isn’t important, it’s very important. It has todeliver that emotion as well as the functional needs that people seek. But youcan drive successful products from the start by exploring the emotions thatcustomers seek. In essence, it’s part of what the whole design process shouldbe all about. But it’s yet the part that hasn’t been really understood orformalized until now.

I don’t think it’s really understood and certainly not formalized. I remember, I really started to embrace this concept when I read KevinRoberts’ book and this whole notion of Lovemarks. I started to see a wholenew way of thinking which is not certainly in line with the thinking thatyou guys bring to the table of, you know, emotion and intimacy. What doesa brand really stand for?

Again, I love the title, Built to Love. Does it matter what product or service that somebody is designing? But when we start to think aboutemotion, are there some universal emotions out there that we, as humanbeings, have that would make it simple for companies designing any typeof product to keep in mind?

The universal emotions…well, I guess there is a yes part of this answer and amore complicated yes part or, yes and no if you will. In the sense that we’vestudied emotions that people look to benefit from, from products and services,and that would be a universal set.

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I mean, there are hundreds of emotions. Actually, probably even thousands of emotions more than people have words to describe. And yet, trying to designfor hundreds of emotions is unwieldy, to say the least, for companies toresearch and develop on that vast base.

It turns out if you’re studying that space and analyzing it like we did, a lot of these overlap; safety, security- these kinds of notions. There are manydifferent feelings that all are in that same space. So you can categorize andthink of types of emotions or groups of emotions. We have done that analysisand we put that into Chapter 6 of our book. Is that right Jon?

That’s correct.

There we have this general set of emotions and that’s the definite yes part.There is a set that people are always looking for.

However, once it’s at that very general level, any company that is wanting todelve into this needs to be more specific within that category and how thatapplies to them.

So to take one example, a feeling of luxuriousness. In some product categories,the word ‘luxury’ is actually not a word which appeals to the market. Let’stake a business to business context where the buyer is maybe even actually agovernment service. Luxury sounds like you’re wasting money. It’s wasteful.It’s excessive. They don’t want to spend public funds in a way that has that

feeling of waste.But if you think about the notion of luxury, it’s a sense of well being, welltaken care of, of comprehensive service. Comprehensive service, that notionresonates very strongly and it’s quite valuable in a business to business and inthis kind of context where you’re spending public funds.

So getting specifics, it’s not so easy to say, “There are 16 emotions to designfor.” You have to really understand what those mean in the context.

Let me give you an example. One of the first things that I kind of realized when I read your book is the purpose of what we’re trying to do at Learnfrom My Life and at 33 Voices. The one word that I came with and the oneemotion is inspiration. It allowed and it really enabled me to think a littledifferently about how we present ideas. Because the whole notion of everything we’re trying to do is, connect individuals and companies withthe best thinking and thinkers out there and the reason for that is helpthem build great businesses and live great lives.

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So everything that we want to try to do is really with that premise of trying to get people inspired maybe to take the next step or to dosomething that ordinarily they thought they could not do. When I thinkabout what we’re doing and I start to relate to some of the work that youguys are doing, there was a gap. I assume there are a lot of companiesthat you guys talk to and that you guys counsel, where you go in and youfind that gap between what they know and what they do. Help me fill inthat gap.

A lot of us know we’re driven by emotion but yet, most of us don’t doanything about it in promoting our products and services. As I mentioned to somebody yesterday, I think your book fills that gap. Am I way off base?

I think you’re right on the money. I think in terms of what the book can do forpeople and what we do when we work with companies is to start with, what is

your current state? Where are you at as a company? Where are you at interms of your products? Where are your competitors at? And then who areyour stakeholders? Who are the key ones and what do they really desire?

And then once we understand that, we can then use the eMap, this tool thatwe’ve developed based on these categories of emotions, to help dig in to thatcontext and identify the specific emotions, as you said, to fill that gap that aremissing.

The goal is to understand what your customers want. You have to understand

that. You have to do research to know what your customers want. But once youunderstand that then you also have to know where you want to go as acompany or an organization. And then between those two, you can identifystrategies that is emotion based that you can pursue and instantiate thatthrough the products that you’ve developed.

Jon, can you give us an example of a situation you guys have been involved with and involved more of a service business. I think from a productperspective, it’s very easy I would think for anybody listening to this tothink of their best products and immediately think of emotions that ittriggers.

I think it becomes a bit more difficult for a service industry say, a consultingpractice. Can you share some examples of how you’ve taken or helped aservice company go from where they were to a more emotional state of delivery?

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I want to jump in and add to the previous question and then we can move intoservices if that’s okay.

In your question you mentioned that notion of being inspirational. There is a lotof passion that markers have looked for. Often I think some of what markershave recognized, they want a passionate following. They want their employeesto be inspired and engaged and they want their customers to respond with zealand loyalty.

Passion is an outcome. It’s a result of something else that you feel that senseof loyalty and it’s because of some extra value or some connection. Whatwe’ve done in Built to Love is move at a deeper level to something that willlead to and feel that passion where passion is the result. Passion is not theimmediate objective, it’s the long term objective.

Great, I appreciate you sharing that. That really clarifies it for me. So youwant to dive into kind of the service industry?

So in terms of services, what’s interesting is that often, we talk withcompanies that have focused on initially technology but all with differentcompetitors have the same technology. So where they differentiate is service.

Some of these companies recognize, and that’s the focus that they’re goingafter, is how can they really improve their service from the context of emotion.That’s one example of taking a service and realizing that even among what’s

essentially and initially a physical product, that’s really often to service thatdifferentiates a company and that eventually leads to its success.

In the book, we also talk about services such as even a university. It’s oneexample of a service that we’ve talked about and then actually done somework with in terms of really understanding that there are some verycomplicated relationships between stakeholders. Essentially, the choice of theuniversity is partially because of emotion. But really and more importantly is,once you’re involved with a university, you have a life long relationship withthat. University and the emotion is so critical to that relationship as you moveforward in life.

You can also look at retailers as another example of services. But once again,the differentiation between different retailers is really primarily the servicethat you receive because you can buy those goods in many different places.

Another service example that we have, at face value it doesn’t look like aservice, is RedZone Robotics. They make robots. But ultimately what they’re

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doing is they’re providing a service. Their robots are inspecting a system,mapping it out, and providing information. Why? What is that information for?Because the opportunity they’re solving, the problem they’re solving is anemotion based one.

Whoever you’re mapping information for has some uncertainty. They’re unsurewhat’s the state of their system. So resolving that uncertainty and giving themthe confidence that either the system is intact or hear some very specificproblems to address and they know that they have addressed them.

Ultimately confidence or security is what this service RedZone was providing.Once they recognize that it was an emotion based opportunity, they’re goingfor, they dug into that and analyzed it and that’s when their firm really tookoff in terms of growth.

I know Peter, Apple has been overused in almost every context. They havedone an amazing job in creating this context. As you were making acomment early on in our discussion about our iPhones, I started to think,“Okay, how about me? What do I like about my iPhone and my iPad and my iPod and everything that has an I in front of it?” You know, I have becomean advocate, an evangelist, not only is it a beautiful product but it makesme feel good about myself.

It’s funny, I had one of the first iPhones right after they came out and I lovethat product because it just took my everyday routine task. It’s made them a

little bit more joyful. Before they were out, I was talking to everyone saying,“You got to get one of these. They’re great.” I got Peter to go out and buy one,as a matter fact. I wasn’t trying to be obnoxious but I thought, “Boy, if thisbrought me this little extra joy, it might do the same for him.” And then theiPad comes out. I’m looking at every functional excuse I could so that I couldbuy it because emotionally, I wanted that product and I love using it.

Jon, I feel the same way. Hence, now when we start to think about how does this thing get into boardrooms or how does it become top-of-mind conversation for any aspiring leader, manager, or entrepreneur. When I start to look at kind of the high emotion index that you guys have talked about and I see that yes, there are some staggering returns that thesecompanies -- I mean, this is tangible stuff. This is not made up. You canlook at the numbers. When I start to think about that, I’m sure when youguys looked at it it certainly was an eye opener that this is a criticalingredient to the success of any business.

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Success of any business, that’s a good point. Because many businesses they cando pretty well but they’re leaving a lot on the table and may not evenrecognize it. If they added an emotion they could be doing much better. Wedid quantify this through looking at stock market returns to see is thissomething generalizable and yet understand the context of this question. Itreally wasn’t to try to put together a winning fund that we could manage at allto try to pick stocks.

The context of this was really confirming everything else in the book. It wasconfirming that firms actually can provide emotional value. Apple is theeasiest example. That’s probably why it’s overused as people recognize it.They understand it. So firms provide emotional value and people value it andpeople are willing to pay for what they value. You put that together it sort of itshould be true that firms that are doing well in the emotion end of thingsshould have unusually high returns.

So, we were trying to just look back in time and confirm that that’s exactlywhat’s taking place. Then when we looked at the returns over the past years:three years, five years, 10 years etcetera. Like the 10-year returns, theemotion index of the set of firms that we identified -- we ran a marketresearch survey to identify a set of firms that provides higher than averageemotional value to their customers. That high emotion index gave a return of greater than a thousand percent. Meanwhile, the Dow, the NASDAQ, S&P500 were less than 100%. I mean just astounding returns.

We thought something must be wrong. I mean, we’re throwing out why arecompanies. We were checking their robustness. We did Monte Carlo simulationover random holding periods. Numbers were coming through that this reallypays off. So only then do we start to look at the future to say, do these returnskeep on holding in the future because we were pretty impressed with the pastresults.

I can’t imagine that the future would be any different. We’re in an era wherebecause we’re inundated with products and because we’re inundated withcopycat products. Specifically, I mean look at since the iPhone came out andthis whole notion of apps and applications, every phone now has apps andapplications and even televisions have apps and applications. Yet, Appleremains the leader.

I was reading over the weekend on the cover of Fortune, the perfect iPhone,now with Apple teaming up with Verizon. So I sense that I would envisionthat that would continue to be a primer in the future. Do you guys kind of

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see the same thing? Certainly, we’re not here to predict the future but itseems to be something that’s reasonable.

It’s even interesting that we wanted to explore that. So when we originally ranthat study looking at our stock index, the high emotion stock index, it was inthe summer of 2007. Although the whole reason we did this was to look to thepast to verify our hypothesis, we couldn’t help but look to the future. Wewanted to see if it was at all predictive.

Of course, we picked the period of time where we then, in the future, wentinto the worst economy in a hundred years. We’re thinking, “Okay, let’s see.”Not only do we have to see how this projects forward but how does this projectin a really bad economy. Does emotion matter in bad economy? Do people wantto buy things because that their driven by emotion or are they going to go backto only being frugal and functional?

What’s so interesting is that even through this bad economy, the high emotionindex fared quite well and certainly far better than the standard indexes.Certainly, everything tumbled after Lehman Brothers collapsed but what comesout of that trough first is this high emotion index. So yeah, emotions are adriver even in bad times, even when the economy is down. Emotions may shiftbut they’re still there.

Emotion has long been one of the keys to advertising specifically nowadays.How does the message in your book, how does the message in your studies,

impact advertising moving forward? Is it now starting for advertisers and marketers to start to really drill down and find out specifically whatemotions their products are designed to trigger and focus on that?

Well, if you think about today’s environment, traditional advertising doesn’thave the reach that it once did. Because people are spending their time onFacebook and looking at Twitter feeds and their smart phone or they’re lookingfor reviews that other people have put online about products. So if you reallywant to reach people then you need to do this through the product emotions.The product itself needs to engender those emotions.

Now, that’s not to say advertising doesn’t have a purpose and role, but ourpoint is that the days of advertising meant taking a product that’s completeand then trying to create fictitious emotions and pop them on top of them.People see through that. Although they may still enjoy the ads, it’s not going tohave the impact that they once did.

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So a good ad today is going to be one that echoes or leverages those productemotions, the emotions that are engendered by the product itself . That’swhat advertisers need to start doing is looking for what those product emotionsare. More importantly, companies need to realize they need to create theemotions themselves as they’re developing the products instead of trying toleave it as an after thought.

That brings us to title itself, Built to Love because sort of the traditional oldschool way of doing things is to create the product and then to try to put theemotions around it. Try to figure out how are we going to get people interestedand engaged enough to buy. But that’s after the fact.

We are looking at when the product is being put forth and created in the firstplace. This is where you got the notion of design thinking and bringing that inthat you’re looking fundamentally, what is the customer looking for? So once

you’re identifying what they’re looking for, we’ll build it all in both functionand emotion. Now that product is providing what people are looking fordirectly. It’s providing emotions that at a very deep level.

We lead off the book with an example from trucking. One of the things thatNavistar recognized is that truckers, although they’re small businessmen, manyof them, so there’s fleets and there is also smaller owners. But the smallerowners, they’re not really viewed in society necessarily like white collarbusiness owners. There is a respect that truckers really hunger for and thetruck itself can help provide that.

So that’s what Navistar went about among other things. They provided a truckthat was not only an outstanding business tool but one that also created aspace for instance in the interior to where it was more like the cabin of aprivate jet than like a traditional truck. It may have even a hardwood floor forinstance.

That respect is something that strikes deeply. That reaches people at a deeplevel to where now they start opening up and they start saying, “Look at thistruck” or, if they already own it, “Look at what I’ve got.” It becomes part of them, part of their identity that they publicly share and enjoy sharing.

The observed output is this zeal, this engagement, this excitement, that everycompany is looking for that was a result of providing the respect andprofessionalism that the truckers deeply wanted.

Which was a fascinating example. When I read that example, I mean,obviously the first thought that goes through your mind, “Wow, semi-

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truck.” The whole notion LoneStar did to create emotion. If that could bedone in an object like that certainly, it’s possible in everything else.

Let me shift my attention to the world of selling for a second. Everybody istrying to sell something whether it’s AT&T selling, it’s great service thatmost of us have not yet experienced or somebody is selling something else.Everybody is selling something. How does your approach change the world of selling? I think, from my perspective, it does.

There are two pieces. There is creating awareness. That has to take place forsomebody to even buy. So there is creating initial awareness to get somepeople to own it. One of the things is, every marketer is always recognized thatword of mouth is a dream. That’s a dream state of marketing.

If you plot out the mathematics, word of mouth is exponential in growth .

Direct sales from a company, it’s directly from the company to the customer.This can be advertising. This could be going to the retailer and then to people.All those channels where it’s not the word of mouth type where customers aretelling customers. But when a company is selling directly, it’s all, we’ll say,linear, to use the math term. It’s much slower growth.

It’s always been the dream of marketers to get this word of mouth going andthey try some marketing ploy to do it but of course that’s backwards in a sense.Because if it’s the product that all the customers are talking about, bring out aproduct that they can’t help but talk about. All the investment needs to go in

the product.That’s I think the major change on the selling side is putting it in the frontend, putting it in to the product design of what people are looking for. Notto say we don’t have to create awareness alongside that but that’s a shift inmentality. That’s very important in the market place today.

Peter, are there key questions that people should be asking in that processinitially not to miss that?

The types of questions that you would want to ask are ones that are going tobegin to evoke of this role or a mode of response. For instance, what’s yourfavorite, and fill in the blank. Here’s your favorite phone, your favorite this orthat. People really have favorite often because of emotional reasons. So,probing why, there is just one example, or what do you hate about is going tobe the negative side. But fixing is a negative is also very important in theemotional sphere.

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Those would be some starter questions to get people, you know, get themgoing to understand how to do the market research to where you’re beginningto understand emotional why’s what people are looking for.

I gave a copy of your book to everyone on my team. One of the things thatI started to challenge them with is the thinking of, okay, I really believethat this is a key lever for people being engaged and people being inspired.But I challenge them to think how, after reading that book, they would design the website any differently or add or take away anything from our website. They come up with a lot of interesting ideas.

I’m just curious, from your perspective, how do you see that once peoplego through that, you know, companies that you take through your programand take through your thinking process, have you seen them kind of try tobring that whole level of consistency in this thinking to everything that

they do?

Yes. I mean, at times we’ve seen a really interesting change in companies. Ithink Navistar is a great example where this was a company that was reallytrying to be the low cost provider. Through new leadership and new inspiration,when you talk about LoneStar really extremely exciting paradigm shift in trucks-- even before the truck came out, you could feel the energy among people atthe company because they realized they could do something different. Andbecause of that, it changes the mindset of how you approach everything.

It’s true in anything in life. Once you start to feel good about what you’redoing, that just starts to radiate into everything you’re doing, certainly, aroundthat environment. I think that’s certainly the case here. Once you realized thatif you really can do things differently and embrace emotion in what you’recreating and delivering to people, you can be emotional about it as well and itcan change how you think about all the products you’re creating.

Are there questions right now that you guys are exploring that peoplelistening to this podcast and/or reading this transcript can help contributeto?

One of the things that excites us about what we do is, clearly, we work closelywith a lot of companies in different modes from consulting, to having themsupport projects at the university through the teaching that we do and ourengagement with our students. We also are at one of the top researchuniversities. We’re constantly looking at research questions.

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We’re probing how the ideas in Built to Love which builds on the ideas in ourprevious books. Where do they lead? Part of it is, also, can we start to thinkabout new ways to engage people and implement these ideas. So that’s at ahigh level. There are a lot of different things we’re looking at.

I’ll just mention one thing that we’re doing that could be very interesting. Wesort of mentioned it briefly in the book. What we found really exciting is that,you know, there is different ways you can implement this emotion strategy andyou want to do that through touch points, things you create. Certainly,designers do that for you. They’re well trained and now they have direction onwhat those emotions should be and you can test what you’re creating againstthe marketplace. But wouldn’t it be great if you could actually start to havecomputers help us deliver these emotions.

So one of the things we found really interesting is that some of the research

we’re doing, we can actually, through surveys, by continuously changingproducts’ visual forms. We can start to determine what the actual utility orpreference functions people feel towards products are. You can do that assimple as like or dislike but you could also do that to the emotions. Once youhave that, you now have a means to actually drive a computer to generatedesigns that maximize that function.

Probably getting a little bit beyond what some of your readers or listeners areinterested in but what’s so interesting is you can actually get computers togenerate designs that resonate emotionally with people. So what’s interesting

is that there is really a science behind these emotions. Although we give sometools in the book that allow you to interact when we do this, it really providesthe basis for some very fundamental research. Some very fundamental toolsthat I think will emerge over time.

I think you guys are certainly on the forefront of a different thinkingprocess specifically in the world of business creation. I don’t look at thescenario of design or I mean, really believe there is a tremendous valuethere.

Anybody who has not had an opportunity to read the book obviously Builtto Love can be purchases at any bookstore at the same time anywhereonline. Are there particular websites or places that you guys would like todirect people to, Jonathan and Peter?

We actually have a website for the book, www.BuiltToLove.com . We haveinformation about the book on the website. Also, lots of links to differentplaces you can buy them although, as you said, available really anywhere. We

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also have a blog that we started. We certainly invite people as they start to usethese methods or uncover new ideas in terms of emotions and products. We’dbe more than happy to hear from them through the blog. They can certainlysee some of the ideas that we found products that we see that are emerging.So that’s really a great place to go. And then there is also lots of links for otherwebsites from there including some of the other work we’re doing.

The blog is, one our main intent was to hear from readers. So encourage ourreaders to, in essence, write back. If they have created a product that theyfelt like has really been very successful in reaching people and providingproduct emotions, we’d love to hear the stories. We’ve intended that to be asa two-way communication not us just continuing to give examples to readersbut also have readers write back.

I love your story and I love you guys sharing the time with us. I really

appreciate it.

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