How Much Do Emotions Cost?

What are the costs of evoking emotional responses to products? Anything extra put into products generally ends up increasing their costs. Is the cost of product emotions so high that it outweighs the gains from higher prices and sales volumes?

Cost is always an unavoidable consideration. It turns out that for product emotions the costs can be affordably low, and accessible to every firm, not only the global giants.

Product Emotions versus Advertising

Consider the product emotions of Starbucks. Starbucks products provide emotions such as tranquility, the feeling of being well cared for, and the feeling of refreshment. You may be thinking about Starbucks coffee but that is not really their product.

Starbucks has been described as “your third place,” that space to relax that is neither work nor home. In founder Howard Schultz’s words, “We’re in the business of human connection and humanity, creating communities in a third place between home and work.”7 Starbucks provides a comfortable, relaxed atmosphere that encourages meetings and reading time. The emotions provided by Starbucks, experienced at the point of delivery, have created value that has fostered growThof the enterprise to over 15,000 stores in only 20 years. Although Starbucks had troubled times through 2007 and 2008, Starbucks had phenomenal success up until those years and afterwards.

Throughout its earlier period of growth, Starbucks had no national advertising campaigns or the expense of national advertising, attributing their growth to word-of-mouThfrom those who were delighted by their product. An interesting ongoing challenge for them will be to maintain their third-place identity in addition to providing high-quality coffee, because competitors offer features that Starbucks initially with held, such as free Internet access and readily available power outlets.

The costs of Starbucks’ product emotions are low relative to the advertising expenses typically used to introduce a new product. Clearly the growth of Starbucks Corporation without the use of ad campaigns serves as further evidence of the benefits, and justification for costs, of product emotions.

Product Emotions versus Performance Features

Another way to consider the costs of emotions is to compare them to the costs of other product benefits. Going back to product quality versus quality-related emotions such as confidence and pride, typically a product’s performance features and production quality require greater monetary investment to achieve than do quality-related emotions. For both physical products and non-physical products (such as services), product emotions are often evoked through visual cues, verbal statements, pointed features, and thoughtful interaction.

Prior to creating the DeWalt brand, Black & Decker could have invested to further increase tool performance or product life, except their tools were already beyond the threshold of excellent quality. Additional investment in technology to further advance quality would have been quite costly, and it was unlikely that the marginal improvement in quality would have invigorated the brand to the high level achieved by the rebranding.

Consider the cost of just one of the details of the rebranding discussed above: color. Before rebranding their tools as DeWalt, Black & Decker sold black and charcoal-gray tools in both their professional and consumer product lines. Competitors’ professional tools were in highly differentiated bright colors such as red (Milwaukee), teal (Makita), and green (Hitachi). When Black & Decker rebranded their tools as DeWalt, they brought out products in bright yellow with black trim.

Product color requires a trivially small investment (especially as compared to improving product performance), yet in tools it engenders a disproportionately valued emotional response, visually conveying professionalism. The cost of a “no downtime” program was similarly low—an offer of free loaner tools if a DeWalt tool needed to be repaired. By doing so, DeWalt created the emotion of confidence in the new brand yet the program was not likely to cost much to run after it was set up; given the manufacturing quality of their tools, the loaner service would be used infrequently in practice.

Product emotions have a strong connection to specific product features. The cost of emotions is merely the cost of thoughtful execution of product functions. Confidence, contentment, and feelings of distinctiveness often stem from observable aspects of product quality, such as leather for vehicle seating, thickness of paper for stationery, or lobby décor for services such as banks or attorneys. McDonald’s provides the peace of mind of simplicity and the relief of the easy, quick meal. These emotions of simplicity and the relief of anxiety would be difficult to provide were they not authentic to the actual service of McDonald’s. To a great extent, McDonald’s truly does consistently provide a quick meal.

McDonald’s also does so much more. The menu is organized into an accessible structure and placement, the wrappers are easy to open (even one-handed), the restaurants are built in easy-access locations, and the flow through the waiting line is orderly and readily communicated. While the functional aspects of restaurant location and of the operational organization for a quick meal require a large investment, the emotional ease of simplicity is supported and communicated from details like the wrappers and packaging. Much of the infrastructure investment in simplicity can be undone if a consumer gets frustrated when attempting to open a package or if they cannot find their preferred item on the menu. While relatively inexpensive, details like packaging are essential elements for the emotional value of McDonald’s. When emotions arise from the function of the product, they validate and make the actual functional attribute “real” from the point of view of the customer.

The cost of one hamburger wrapper is the same as another, yet the details of McDonald’s hamburger wrappers are so important to delivering an ease-of-use experience. Conveniently, McDonald’s simplicity in product packaging makes assembly in the kitchen equally beneficial, for food handlers can wrap up the burgers that much faster, increasing throughput. This is a win-win example of providing emotional benefit while reducing costs.

The cost of providing emotional value to customers are generally costs that the company would expend anyway, which means that it need not cost extra at all to provide emotions. Thoughtful color, form, and ergonomics are usually no more expensive to produce than drab, hard-to-use designs. However, it takes a certain kind of skill to think through and design emotion-based features. This might mean new skill training for a current workforce (as simple as reading this book or as time-intensive an investment as continuing education). It might mean hiring a new member of the product development staff with skills to analyze and design for emotion. It might even entail a technology-based company hiring an industrial designer.

When RedZone Robotics, a high-tech company discussed further in Chapter 6, began their growth as a renewed company (they had been in Chapter 11 bankruptcy before current CEO Eric Close bought them and successfully rejuvenated the company), the seventh employee they hired was an industrial designer, for just this reason.

It would be misleading to say that product emotions are never more costly to create. New technologies might be needed to meet a customer’s emotional desire. But if it is so critical to the customer that they must have it, then clearly the cost will be justified by the product sales. More likely, if addressing emotion is just slightly more costly, then if a firm offers features customers don’t want or features that reduce the customer’s emotional connection, removing those aspects of the design readily reduces product costs, keeping overall costs in check. It may cost a little additional time to research what the customer wants, but the costs of research and planning end up being swamped by the resulting added profitability.

Infusing the product with emotion can have negligibly low costs, as low as the cost of being deliberate in designing a hamburger wrapper. In theory, it can be extremely profitable to provide emotion to customers. The theory is (1) consumers value emotion; (2) firms can provide emotion through their products—their physical products, software, services, and brand; and thus, (3) delivered emotions can be profitably offered in the marketplace.

How does theory play out in practice? In the next chapter, we analyze firm performance to see if firms that engender a positive emotional response are more profitable than firms that do not.