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Why Genuine Empathy Is Good For Business

When you can step into your customers’ shoes, it’s easier to walk miles ahead of the competition.

Why Genuine Empathy Is Good For Business
[Photo: Flickr user Robert Couse-Baker]

Some people think of empathy as a touchy-feely, “soft” skill. It isn’t. Empathy is a hard business skill that’s absolutely critical to the bottom line. It’s not about being nice–it’s about feeling someone else’s pain.

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Whatever your feelings on Amazon’s reputedly breakneck work culture, the company has built an empire on empathizing with consumers. And empathy doesn’t just work for Amazon. Progressive companies, almost without exception, are experts at intuiting customers’ discomfort and acting on it.

Feel Customers’ Pain Before They Do

Back in 1999, I was a home builder. On one particular project, my clients weren’t happy–and for good reason. Our supplier couldn’t get their floors in on time, and they were stuck in a hotel waiting for the job to get finished.

This was pretty much par for the course for the construction industry, but that didn’t make it any less frustrating for my clients. One thing missing from the market was a website where you could order construction materials as easily as buying books or music–then have everything show up on the build site, on time. Customers were desperate for it. So why didn’t it exist?

The most successful companies ask this same kind of question, obsessively. In the mid 2000s, for instance, Blackberry had a lock on the phone market for business users and was making inroads with consumers. Steve Jobs may not have had a personal reputation as an empathetic leader (nor exactly does Jeff Bezos), but he was able to see that what people really needed wasn’t a clunky office gadget with dozens of tiny buttons, but a versatile, app-driven iPhone.

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Jobs’s famous quote–“A lot of times, people don’t know what they want until you show it to them”–is sometimes seen as arrogance, but to me, it’s the highest expression of empathy: addressing customer needs before they’re even aware of them.

Invest In A Cure, Not A Band-Aid

Just feeling customers’ pain isn’t enough. Too many entrepreneurs get this far only to slap a quick fix on an existing problem, masking the issue but never getting to its root. Real empathy requires going beyond the Band-Aid solution and investing in an actual cure. It’s rarely easy, and the process of getting at the core problem is sometimes costly and full of wrong starts, but it’s where true innovation comes from and can reap huge rewards.

Take another example: Airbnb. The idea of offering travelers a more personable alternative to the stuffy hotel experience was a hit from the start. Yet despite early successes, the model had some serious flaws. For one thing, it left homeowners in the lurch if their guests trashed the joint (which initially seemed to be happening with alarming frequency).

Airbnb could’ve patched this problem by addressing those issues case-by-case and launching a shiny media campaign. Instead, founder Brian Chesky invested in an actual solution. Beginning in 2012, the company started offering a free, $50,000 insurance policy to all Airbnb hosts (which has since been expanded to a $1 million “peace of mind” guarantee). Investing in this cure was an extraordinarily risky move, putting the company on the hook for all sorts of possible damages. But it wound up being a turning point. With trust restored, AirBnB has since gone on to radically disrupt the hotel industry and is now valued at some $24 billion.

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I’ll be the first to concede, however, that this is easier said than done. Real disruption is scary and lonely. We spent a decade and tens of millions of dollars trying to figure out how to actually connect manufacturers and buyers of home-building supplies in one website. It would’ve been far easier to just build an online big box store–throwing the same old inventory online and calling it revolutionary–but that wouldn’t have solved the problem my customers experienced in the late ’90s. It wouldn’t have been the most empathetic business move.

Empathy Never Sleeps

Empathy isn’t merely a foundation to build a business on; it’s also a way to adapt when the market inevitably turns. Without it, it’s far too easy to just keep doing what you’re doing–doubling down on what’s bringing in revenue, without asking whether consumer attitudes are silently shifting.

Examples aren’t hard to find, even at once-great companies. Kodak threw everything it had into its tried and true photographic medium while the world went digital. Blockbuster insisted on renting videos in bricks-and-mortar stores, even as the Internet was opening up far more convenient channels for consumers, leaving Netflix to stream away its customers.

Don’t get me wrong: Being nice can be an important virtue in business, too. But real empathy is something different and deeper. Truly acknowledging and addressing someone else’s pains and frustrations is hard. It requires serious investment and a long runway. Not to mention, it isn’t just customers who need to be considered, but employees, suppliers, and other stakeholders, too (a lesson Amazon could take to heart).

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But entrepreneurs who manage to master the art of empathy have an uncanny habit of disrupting the world they live in. When you can step into your customers’ shoes–and see the world from their perspective, not yours–it’s easier to walk miles ahead of the competition.

Jeff Booth is cofounder and CEO of BuildDirect. Follow him at @JeffBooth.