Decoding Empathy: How consumer centricity can season businesses for success

The 2024 edition of CMOs’ Charcha – Bengaluru Chapter successfully brought together the country’s top marketing leaders to chart the future course for India Inc. Since its inception, CMOs’ Charcha has evolved into a respected forum, with chapters in Delhi, Mumbai, Kolkata, and Bengaluru. This year’s edition, held on Wednesday, September 25, at The Lalit Ashok in Bengaluru, centered around the theme, ‘Revolutionising Marketing: The Fusion of Data, Creativity, and Technology’. The summit explored how the integration of data, creative innovation, and advanced technology is transforming the marketing landscape.

In his opening keynote address, Srideep Kesavan, Chief Executive Officer, Heritage Foods, spoke on ‘The Flavour of Empathy: How Consumer Centricity Can Season Your Business for Success’. At the outset, he introduced Hyderabad-headquartered Heritage Dairy Products as a prominent player in the Indian dairy industry for over 33 years. As a listed company, Heritage is present on all major stock exchanges and has steadily grown to become the second-largest private dairy company in the country. With a strong foothold in southern India, the company is now expanding its reach across the nation. Heritage boasts of impressive revenues of around Rs 4,000 crore annually and serves over one crore consumers daily. The company handles approximately 1.8 million liters of milk (18 lakh liters) every day, a testament to its scale and commitment to delivering high-quality dairy products to millions of households.

He further said, “While the purpose of Co-operative dairy brands is not to make profits, but to market surplus milk of the farmers. Their pricing is on a cost plus basis. Whereas listed companies in the private side are under the scanner all the time for profit delivery. Shareholders ask us questions, and we have to deliver on ROCE and EBIT. And we work like any other FMCG company to create the value.”

Speaking on creating value in such a market, he explained, “If a Cooperative brand sells at a price of X, we will have to sell it X plus delta X to make money, because the raw milk procurement price is the same. There is very little operating leeway as far as the costs are concerned, or what you call as the conversion cost. The only margin we make is by selling at a higher price.”

On selling the same commodity or product to the same consumer and expecting to get a higher price, he said, “You need to be selling something that is significantly better and perceived as better. That’s what heritage has been doing for quite a long time. And we are getting better and better at it, and at the core of it is consumer empathy. We have one consumer research happening every week. We do close to about 40 or 50 different consumer immersions and research work every week. That tells us about why consumers are unhappy with the options that they have and how we can do better, that’s what gives us the delta, the value that we create.”

Continuing further, Kesavan turned his focus to address the CEOs’ perspective of marketing. He said, “When you ask marketers what the ROI on marketing is, they will share several insights which expand our awareness and affinity. Those are the things and metrics that we all focus on. The core purpose of marketing is to continuously drive brand value. And it is not a static number. It has to continuously keep increasing; all businessmen are able to capture it through commercial interventions. Fundamentally, that’s the purpose and the only reason why marketing exists.”

Speaking on its relation with consumer empathy, he noted, “Half of the time, consumers may not know what they need. So, it’s not just either an under-met need or unmet need, many a times it’s an unrealized need, which is very difficult to get out of your consumer. That’s the reason why it may not be enough just to meet consumer needs, especially when they may not know what they seek. I truly believe that the needs can at best be only partially physical, most of the time the unmet or unrealized need is an emotional need. That’s why a good definition of brand value is that it is a function of “physical benefit” and “emotional value”. We must note that the “value” resides on the emotional side of the proposition. Value usually does not reside in the physical benefit.”

To make a strong case for putting consumer empathy at the centre of marketing conversations, Kesavan noted that “a brand is a promise, an experience, and a memory. We are making a promise. And you need to meet and exceed the promise. But at the same time, it is an experience as well. Every time consumer uses your brand, every aspect of their experience will define the brand value. And eventually, ‘memory’ is what is most important, because the residual memory that the consumer has in her mind about your brand is actually the value that you have gained in that transaction. Hence it is most important that you have repeat engagements with the consumers. Trial is good, but repeat is what builds value over a long period in time. The stronger the memory anchor, the higher the value you will be able to create as a marketer.”

While emphasizing on the importance of relevance to the consumer, he used a metaphor from cricket, stating, “Empathy is anchored on the concept of ‘relevance’. To seek relevance in consumers’ lives is why we talk about consumer empathy and consumer centricity. Using a metaphor from the cricket world I will say that if your offering is not relevant to the consumer, it is like a bouncer. You don’t even have to duck. The ball goes above your head.”

Turning his focus on how this can be practiced by the new tech savvy generation of marketers, Kesavan said, “Marketing is not rocket science. Earlier, we used to spend about 50 hours a year, doing consumer immersions at homes, and learning about their lives. Today, we have an opportunity to do this in a digital fashion. And that digital opportunity is what is known as ‘community marketing’. Community marketing comes from the idea that “belonging” is one of the strongest emotional motivations in the Heylen’s human motivation framework. Our ancestors used to survive in clans, we used to support each other. This is what we see in today’s digital communities. Facebook is probably the most effective place where these communities actively participate because of the format of that media itself. At Heritage we worked with this partner called Convosight, which is an aggregator of these communities. They have access to thousands of admins of these communities on FB. One could imagine that joining these communities and listening to their conversations is akin to physically sitting in a person’s home and understanding about her life. Here we have an opportunity to sit in hundreds of communities and listening to all the conversations that they are having.”

“One big advantage in our community is that people speak freely. They don’t have any fear of rejection or ridicule. We had to use technology to read the thousands of data points from these conversations, and extracting insights. We had an organic reach of about 7 million consumers through these communities,” he informed.

Kesavan concluded his address by speaking about social listening, saying, “Social listening is a powerful tool as far as consumer empathy is concerned. The idea is to understand the cohorts. The problem is that a lot of people define cohorts using only demographics, such as 18 to 25 years of age, male or female, etc.. We need to get better at defining our consumer cohorts. We have to define them basis attitudes or behaviour. Attitude is usually the psychographic profiling and behaviour profiling is usually to do with purchase behaviours. Today, the digital world we live in is so data driven that if you ask, most of the social media partners may be able to give you exactly the consumer you seek, so that conversations you listen to are Relevant.”