Emotional EconomyEmotional Economy

Emotional EconomyEmotional Economy

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

Emotional EconomyEmotional Economy

• ””Emotional Emotional Economy” is written Economy” is written on a basis of:on a basis of:

• General observation General observation of human of human behaviour. behaviour.

• Societal and Societal and technological technological developments.developments.

• Future challenges Future challenges for man and for man and mankind.mankind.

The market in the The market in the Emotional EconomyEmotional Economy• ””Still more people Still more people

want to live several want to live several lives within the lives within the frame-work of the frame-work of the one, they have got.” one, they have got.”

• ””The nummer of The nummer of different types of different types of lifestyles will grow lifestyles will grow drastically. It will drastically. It will cause a change in cause a change in the market and its the market and its composition”composition”

The dream of several The dream of several liveslives• ””Most of us have Most of us have

already dreamt of already dreamt of living several lives… living several lives… wearing a distinct wearing a distinct mask in each.mask in each.

• This is what’s good This is what’s good and bad - easy and and bad - easy and hard, when you want hard, when you want to change track. to change track. From one existence From one existence to another…”to another…”

Capitalization: Capitalization: Life wageLife wage• Is the sum of your Is the sum of your

capitalizable capitalizable value, measured value, measured byby

• Personal Personal characteristicscharacteristics

• Education Education • Business potentialBusiness potential• Prognosticated Prognosticated

behaviourbehaviour

A life wage is not for allA life wage is not for all

• World population will grow World population will grow with 3 billion people to with 3 billion people to nine billion people in 2050.nine billion people in 2050.

• Only the few will be Only the few will be prosperous from our prosperous from our standards.standards.

• Obvious global Obvious global segmentation - including segmentation - including in developing countries. in developing countries.

• More regional and global More regional and global unrest. unrest.

• The hegemony of the USA The hegemony of the USA is diminishing.is diminishing.

• A new political order is A new political order is emerging.emerging.

Lifestyle beats productsLifestyle beats products• Every customer wants to Every customer wants to

be the main character in be the main character in her or his own reality her or his own reality show.show.

• Providing the means of Providing the means of staging every customers staging every customers individuality will be the individuality will be the largest business in the largest business in the world.world.

• 75% of consumption in 75% of consumption in the West is not of vital the West is not of vital necessity. necessity.

• The individual desire the The individual desire the emotional attention, that emotional attention, that disappeared along with disappeared along with consecutive family life. consecutive family life.

• Companies that are able to Companies that are able to be family and create be family and create realtions, will acquire the realtions, will acquire the bulk of the customers. bulk of the customers.

Mass marketing will survive Mass marketing will survive - with a new mission- with a new mission• Forget everything you Forget everything you

learned about mass learned about mass marketing - the customers marketing - the customers want 1:1. want 1:1.

• The target is constantly The target is constantly moving, and its no longer moving, and its no longer feasible to use bow and feasible to use bow and arrow - only the auto-guided arrow - only the auto-guided missile, that automatically missile, that automatically adjusts the course.adjusts the course.

• The customers couldn’t care The customers couldn’t care less about your or your less about your or your product or service, unless…product or service, unless…

• Maybe the lesson is, that a Maybe the lesson is, that a successful corporate successful corporate strategy in the future is a strategy in the future is a reflection of the market - reflection of the market - not an attempt to influence not an attempt to influence it for own gain. it for own gain.

Women will take chargeWomen will take charge• The female part of the Danish population is The female part of the Danish population is

50,5%. 50,5%. • In the business community 3% of executive In the business community 3% of executive

and board directors are women and 97% are and board directors are women and 97% are men.men.

• According to an American survey of Fortune According to an American survey of Fortune 500 companies, businesses with female 500 companies, businesses with female executives have a 20-70% higher yield on net executives have a 20-70% higher yield on net capital compared to other businesses in the capital compared to other businesses in the same industry same industry ((see see http://www.fremtidensledelse.dkhttp://www.fremtidensledelse.dk).).

• The Norwegian government has decided that The Norwegian government has decided that by 2005 all companies on the stock exchange by 2005 all companies on the stock exchange are required to have at least a 40% are required to have at least a 40% representation of both sexes.representation of both sexes.

• Danish companies could make an estimated Danish companies could make an estimated 20 billion DKK higher profit, and tax revenue 20 billion DKK higher profit, and tax revenue would increase with 13,5 billion DKK p.a. with would increase with 13,5 billion DKK p.a. with more equality in boards and managements.more equality in boards and managements.

• Women will take charge: Men will pursue new Women will take charge: Men will pursue new barrier-breaking goals - and women will barrier-breaking goals - and women will acquire more competence in general acquire more competence in general management. management.

• Market relevance: Marketing will be on the Market relevance: Marketing will be on the conditions of each individual customer - no conditions of each individual customer - no matter the sex of the client. Marketing is not matter the sex of the client. Marketing is not a gender-related issue - it’s about a gender-related issue - it’s about competence. competence.

The new challenge to The new challenge to companiescompanies• How do you make How do you make

family with 4 million family with 4 million customers? customers?

• How do you build up How do you build up enough trust to be able enough trust to be able to get direct access to to get direct access to customers pockets ?customers pockets ?

• How do you gather the How do you gather the mental fingerprints of mental fingerprints of your customers - and your customers - and with it their history and with it their history and future?future?

• How du you surmount How du you surmount practical obstacles?practical obstacles?

Customer capital valueCustomer capital value

• Is defined as the Is defined as the customer capital value of customer capital value of a given company, a given company, measued from:measued from:

• Customers emotional Customers emotional bond through lifetime bond through lifetime value multiplied with value multiplied with lifestyle time.lifestyle time.

A new estimation of A new estimation of valuevalue• Can emotions be converted into Can emotions be converted into

an economic measurement? Once an economic measurement? Once the debate was, whether the Earth the debate was, whether the Earth was flat or round…was flat or round…

• In a few years corporate value will In a few years corporate value will be measured from the ability to be measured from the ability to acquire, retain and extend acquire, retain and extend emotional relations with emotional relations with customers.customers.

• Customers will invest in relations-Customers will invest in relations-based companies that are best at based companies that are best at dealing with ethical, moral and dealing with ethical, moral and financial demands and financial demands and expectations on a 1:1 basis.expectations on a 1:1 basis.

• Remember - that customers will Remember - that customers will buy solutions or solution models buy solutions or solution models in the future - not finished in the future - not finished products. And - emotions may be products. And - emotions may be at stake, but the brain is still at stake, but the brain is still working. working.

Be the target: The Be the target: The customer is the huntercustomer is the hunter• New marketing is about New marketing is about

making the customer use her making the customer use her instinct for hunting - instead instinct for hunting - instead of feeling like a moving of feeling like a moving target. target.

• The blind shall walk and the The blind shall walk and the lame shall see.lame shall see.

• The shift in roles is The shift in roles is significant, and more significant, and more marketing will focus on marketing will focus on Marcus Antonius: ” I’ve come Marcus Antonius: ” I’ve come to bury Ceasar, not to avenge to bury Ceasar, not to avenge him…”him…”

• For that reason: Who’ll have a For that reason: Who’ll have a say over the future say over the future developments in the market? developments in the market? The market itself or The market itself or marketers? And who’s what marketers? And who’s what when?when?

Winners and Winners and losers in an losers in an emotional emotional economyeconomy• Strong brands with extended Strong brands with extended

1:1 customer relations will 1:1 customer relations will gain, because....gain, because....

• Traditional brands are Traditional brands are necessary in order to gain necessary in order to gain access to the marketplace.access to the marketplace.

• New forms of marketing New forms of marketing based on surprising and based on surprising and abstract thinking rather than abstract thinking rather than graphic design will set the graphic design will set the agenda.agenda.

• It’s always the past that It’s always the past that catches up with you, never catches up with you, never the future!the future!

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