Emotional Economy Emotional Economy The book Emotional Economy

Emotional Economy

Emotional Economy • The book ”Emotional Economy” by Peter Horn and Bo Bache, management advisor and IT-director respectively, is focusing on emotional values as the hardest currency in future markets.

Emotional Economy • ”Emotional Economy” • • • is written on a basis of: General observation of human behaviour. Societal and technological developments. Future challenges for man and mankind.

The market in the Emotional Economy • ”Still more people want to live several lives within the framework of the one, they have got. ” • ”The nummer of different types of lifestyles will grow drastically. It will cause a change in the market and its composition”

The dream of several lives • ”Most of us have already dreamt of living several lives… wearing a distinct mask in each. • This is what’s good and bad - easy and hard, when you want to change track. From one existence to another…”

Capitalization: Life wage • Is the sum of your • • capitalizable value, measured by Personal characteristics Education Business potential Prognosticated behaviour

A life wage is not for all • World population will grow • • • with 3 billion people to nine billion people in 2050. Only the few will be prosperous from our standards. Obvious global segmentation - including in developing countries. More regional and global unrest. The hegemony of the USA is diminishing. A new political order is emerging.

Lifestyle beats products • Every customer wants to be • • the main character in her or his own reality show. Providing the means of staging every customers individuality will be the largest business in the world. 75% of consumption in the West is not of vital necessity. The individual desire the emotional attention, that disappeared along with consecutive family life. Companies that are able to be family and create realtions, will acquire the bulk of the customers.

Mass marketing will survive • with Forget everything you learned a new mission about mass marketing - the customers want 1: 1. • The target is constantly moving, and its no longer feasible to use bow and arrow - only the auto-guided missile, that automatically adjusts the course. • The customers couldn’t care less about your or your product or service, unless… • Maybe the lesson is, that a successful corporate strategy in the future is a reflection of the market - not an attempt to influence it for own gain.

Women will take charge • • The female part of the Danish population is 50, 5%. In the business community 3% of executive and board directors are women and 97% are men. According to an American survey of Fortune 500 companies, businesses with female executives have a 20 -70% higher yield on net capital compared to other businesses in the same industry (see http: //www. fremtidensledelse. dk). The Norwegian government has decided that by 2005 all companies on the stock exchange are required to have at least a 40% representation of both sexes. Danish companies could make an estimated 20 billion DKK higher profit, and tax revenue would increase with 13, 5 billion DKK p. a. with more equality in boards and managements. Women will take charge: Men will pursue new barrier-breaking goals - and women will acquire more competence in general management. Market relevance: Marketing will be on the conditions of each individual customer - no matter the sex of the client. Marketing is not a gender-related issue - it’s about competence.

The new challenge to companies • How do you make family • • • with 4 million customers? How do you build up enough trust to be able to get direct access to customers pockets ? How do you gather the mental fingerprints of your customers - and with it their history and future? How du you surmount practical obstacles?

Customer capital value • Is defined as the customer capital value of a given company, measued from: • Customers emotional bond through lifetime value multiplied with lifestyle time.

A new estimation of value • • Can emotions be converted into an economic measurement? Once the debate was, whether the Earth was flat or round… In a few years corporate value will be measured from the ability to acquire, retain and extend emotional relations with customers. Customers will invest in relationsbased companies that are best at dealing with ethical, moral and financial demands and expectations on a 1: 1 basis. Remember - that customers will buy solutions or solution models in the future - not finished products. And emotions may be at stake, but the brain is still working.

Be the target: The customer is the hunter • New marketing is about making • • • the customer use her instinct for hunting - instead of feeling like a moving target. The blind shall walk and the lame shall see. The shift in roles is significant, and more marketing will focus on Marcus Antonius: ” I’ve come to bury Ceasar, not to avenge him…” For that reason: Who’ll have a say over the future developments in the market? The market itself or marketers? And who’s what when?

Winners and losers in an emotional economy • Strong brands with extended 1: 1 customer relations will gain, because. . • Traditional brands are necessary in order to gain access to the marketplace. • New forms of marketing based on surprising and abstract thinking rather than graphic design will set the agenda. • It’s always the past that catches up with you, never the future!

Get the full picture (in Danish): http: //www. foelelsesoekonomien. dk