CHAPTER 2
Profitability of Emotions
It all gets back to money at some point, and the question of whether or not it is profitable for your firm to provide product emotions. A cost-benefit analysis is a relatively straightforward task for how a product functions. Take, for example, a technology that would increase fuel efficiency of existing cars, adding three extra miles of travel for each gallon of gasoline. That efficiency translates into real money for drivers. Extra fuel efficiency can be valued by how much drivers save in dollars. Firms can then trade off the driver’s fuel-cost savings with the cost of manufacturing and delivering that fuel-efficient technology. If the amount that drivers save dramatically exceeds the cost of providing it to them, it’s a no-brainer. If how much money drivers will save is a pittance relative to the cost, again the decision is simple. If it is close, the manufacturer has a decision to make, but at least it is an informed one based on real dollars.
How does one go about a cost-benefit analysis for product emotions? Just how valuable are they? Company leaders may recognize that product emotions are potentially profitable, but they also know that every opportunity has its costs. Many designers know in their gut the power and the potential benefits of product emotions, but they don’t know how to show their upper management that the resulting products will pay off in the end. Still others believe that emotion-based design is a black art, that only luck will give you a truly high-emotion product, and they don’t know how to justify putting resources in areas where there appears to be no guarantee of success.
This chapter discusses revenues and costs. After presenting product emotion revenues in the context of well-known successful companies such as McDonald’s, DeWalt, and Starbucks, we also talk about the costs. The major point about the costs of designing with product emotions in mind is that they are typically very low. In Chapters 3–5 we will provide evidence to convince any skeptics that emotion pays off—and does so handsomely. To begin here, we consider how emotion fits into basic economics. Thinking back to Econ 101, how are revenues and costs related to emotion? More pointedly, can knowledge of basic economics help us to understand how to increase consumers’ value for products and simultaneously increase profitability and overall company performance?