Wednesday, September 27, 2017

Nine Desirable Emotional States

I generally subscribe to the notion that the foundation of consumer behavior is rather simple: people are motivated to avoid unhappiness or achieve happiness.   For now, I want to focus on the latter, as it tends to be more difficult to define.  

Even the term “happiness” is vague because it encompasses a broad range of more specific emotional states.   I’ve looked to a handful of sources that describe pleasant, desirable, or positive emotions and compiled the following list:


The term “contentment” is a bit problematic because it is considered to be a neutral emotional state – a sort of blank canvas that describes a person who is not distracted by emotions at the moment.    Tranquility is more of an active state, a sense of satisfaction that arises from the realization that one’s present situation and condition is acceptable.  It is not merely being content on an unconscious level, but being aware of one’s own contentment and the feeling of relaxation and serenity that result of being pleased with one’s condition.

Joy, bliss, and ecstasy are also described as emotional states that arise from a sense of well-being.   I do not see a significant difference – they are merely a more intense experience of the core emption of tranquility.

Belonging is a sense of well-being that arises from relationships with other people (family, friends, peers, etc.).  While some sources classify it as a different emotion, it is a subset of tranquility because it pertains to satisfaction with a situation.


Confidence is a positive feeling that comes from the power to achieve something, even if the action to achieve it is not being undertaken at the moment.  The feeling arises from having the capabilities or resources to avoid or mitigate negative outcomes or to achieve positive ones.

It is arguable whether pride is a subset of confidence or of relief.  Where pride is derived from a sense of capability before taking action, it is a subset of confidence.  Where pride is derived from achieving an outcome in spite of doubt, it is a subset of belief.


Excitement is an emotion that arises in the course of a challenge in which a person is mostly confident that they will have the ability to succeed.   While some argue that the emotional intensity of excitement is a form of fear, it is not a negative emotion when the individual feels that a positive outcome will be achieved, even if there is some degree of doubt.    And the doubt is necessary for excitement to be experienced: if one is completely certain of the outcome, there is no feeling of excitement.

Hope is merely another form of excitement that focuses on the desire to achieve a positive outcome, even when the obstacles or challenges are not clearly understood.


Relief is the immediate emotional consequence of achieving a positive outcome in spite of doubt.    This outcome may be a positive accomplishment, but is more often merely the avoidance or mitigation of damage: one feels relief when a threat has passed and the negative consequences that were expected have not occurred.   It’s noted that “thrill seekers” often put themselves in danger in order to experience the relief that occurs when the dangerous event has ended.

Some sources describe achievement and validation as being different emotional states related to success at a goal, but I disagree: these are also forms of relief, occurring when the degree of doubt was relatively low.  There is no emotional reaction to the completion of a task in which the actor had complete confidence and the outcome had been expected.


Satisfaction occurs when the results of an action were “right” according to a person’s moral standards.   Similar to relief, the emotion occurs only when there was a sense of doubt that the right outcome would occur – but it is distinct from relief in that the functional outcome may have been negative, but it agrees with a person’s moral beliefs.

Satisfaction may occur when good things happen to good people, but it also occurs when bad things happen to bad people.   The concepts of “poetic justice” and “schadenfreude”  describe incidents in which a person suffered harm, but the harm was deserved as a consequence of their actions or their moral character.


Amusement is the emotion that surround a positive or benign discovery.   It is a sense of satisfaction that is achieved by making sense of something that seemed confusing.  The “funny” quality of humor arises from the discovery that is made when untangling the riddle of a joke.   Amusement tends to be a short-lived state that fades quickly. 

Though amusement may be re-experienced through memory, remembering something amusing is not the same experience as being amused, but it is not experienced twice from the same stimulus (the joke is not funny a second time), unless perhaps the original solution has been forgotten.


Gratitude is a feeling of thankfulness experienced in response to another person who has done something needful for the benefit of another person, though it may also be effected by the mere promise or statement of intent to do something needful.   Gratitude is also felt when there is not a specific benefactor, though a person who benefits from circumstance may invent or personify an imaginary benefactor.

Where the benefit granted is protection against harm, gratitude is blended with relief.   The feeling we have toward the benefactor, however, is distinct from the feeling of relief at having escaped harm, though the two are experienced simultaneously.


Admiration is a sense of affiliation we feel to a specific individual.  This may occur in the context of a social relationship, but it may also occur independent of one, which makes it a separate emotion (from tranqulity).

Friendship, love, and other forms of attachment are subsets of admiration.

Arguably, there are positive emotions that occur when we are the subject of admiration, but these are more in the nature of gratitude.


Wonder is an emotion that occurs when an experience defies comprehension but seems to pose no threat.  It is most often described in context of the perception of something on a grand scale (often natural phenomena).   Wonder may also be fascination with a form of technical excellence (watching someone do something well)

The feelings of awe and surprise are sometimes listed separately, but sometimes as a subset of wonder.   However, “awe” is more closely related to fear and is not always a pleasant emotion and “surprise” can include an unpleasant rahter than pleasant sensation.

Note: Vicarious Emotional States

Some sources draw a distinction between an emotion that is experienced personally versus an emotion that is experienced vicariously – but it seems to me that the feeling that is aroused when a person’s sympathy is with another person is essentially the same as the feeling that is aroused when the same situation involves them personally.   That is, the relief a person feels watching someone else escape danger is the same emotion they would feel if they had been the one who had escaped danger.   So there is no need for a duplicate of every term for vicarious emotions.

Wednesday, September 20, 2017

The Sustainable Zone

Any firm that wishes to have longevity must serve two masters: the customers who benefit from the good or service it provides, and the stakeholders who furnish capital and labor that enable the product to be previsioned.    It seems a simple enough concept, but I find that I often need to sketch out a Venn diagram to explain it to both sides: those who wish to create value to the customer at a loss of income to the firm and those who wish to create profit for the firm at the loss of value to the customer.   Neither of these is a sustainable strategy.

In its naissance, most firms are targeted toward providing value to the customer.   The founder generally recognizes that “people need [product]” and arrangements are made to provide it to them in an affordable manner.  The focus is entirely on the customer, and very often with little regard to the financial interests of the firm.   Hence, most new businesses fail: they are wildly popular with customers who are getting more than they pay for, but ultimately cannot be financially sustained.

As a firm grows, it becomes inclined to seek value to the stakeholders, generally more toward the providers of capital than of labor, but there are instances in which a firm has been nibbled to death by its own workforce.  The focus is on the profit of the firm, and customers are expected to accept compromises to the benefits they receive.   Eventually, even the most loyal customers recognize they are getting less than they pay for and leave.  The firm may be highly efficient, but becomes unprofitable and cannot be sustained not because of waste, but because of insufficient revenue.

In practice, there are few situations in which a firm is entirely aligned to one side or the other.   A firm devoted to customer service still recognizes it needs sufficient income and efficiency to maintain its operations, and a firm devoted entirely to profit still recognizes it needs to provide some level of value to its customers to have revenue at all.   The difficulty lies in striking the proper balance in its operations.

And in that regard, firms are inclined to drag customers over the border into serving its interests rather than being willing to take a loss to serve the interests of the customer.   This is the reason that so many products on the market are imperfect – customers begrudgingly accept that the product is barely capable of serving their needs, or that they are getting a satisfactory product but paying a significant premium over a generic solution to get marginally better quality.

And then, there is the matter of mutability, as firms pendulate into the areas to either side of the sustainable zone.   The firm realizes it is financially unsustainable and swings away from serving its customers well, then loses so many customers that it becomes panicked about its revenues and swings back to service at a financial loss.   It can play this game for decades if it earns enough loyalty during its customer-oriented years to keep them from defecting in droves when it enters a profit-oriented era.

It can usually be seen when a company changes executive management: the CEO who was brought aboard to solve the company’s financial woes is ousted when the measures he takes drive away customers.  He is replaced by a new CEO who is service oriented, and who brings back the customers, until this results in a diminished financial performance for the firm, at which point he is ousted to make room for a finance-oriented CEO.   Lather, rinse, and repeat.

Wednesday, September 13, 2017

Functional Familiar Trumps Optimal Unknown

In doing research in personal finance and money management, I’ve learned that people are highly idiosyncratic in the way they manage their personal spending and saving.   Some engage in what seems to he entirely irrational, but when asked follow-up questions, there is usually some twisted logic that they use to justify the bizarre things that they do – and when a different course is suggested, their reaction is to cling to their current habits, typically supported some variation on the phrase, “It works for me.”

This is true whether the subject has millions of dollars in savings and investments and is merely being inefficient in managing his surplus, or the subject is living paycheck-to-paycheck and barely scraping by.   Because their behavior has not led to a disaster, they feel that they are doing as well as can be done – or as well as they need to do – and see no reason to make a change for the better. 

It’s only those in crisis who admit, somewhat reluctantly, that they might be doing something wrong – but most often, there is something to blame for their situation and that they can continue with their usual habits as soon as they recover from this temporary setback that was inevitable and beyond their control.  Because what worked in the past will work in the future.

The irony is that it is the very same attitude that decision-makers tend to take in their business affairs.   What they have doing has made their firm successful, or perhaps just barely sustainable, in the past and their intention is to keep doing what they have been doing – and any inefficiency or failure is seen as the consequence of circumstances beyond their control.  

“It’s the way we’ve been doing business for decades, and it works for us.”   And this is regardless of how the firm is doing at the moment, regardless of the glaring inefficiencies, regardless of opportunities to make a change for the better.   And when a committee gets involved, the mantra of “works for me” becomes all the more pronounced.   It is not until the firm is ion obvious crisis that they see a need to do better – and more often, it’s seen as a temporary measure before the firm can return to its old habits, which made it successful in the past.

And I don’t know the cure for it – either in my function of helping to change the behavior of consumers, nor in my function of helping to change the behavior of my organization.   What works now, and what has worked in the past, is invariably preferred to a better course of action.   And while you can describe the crisis that is inevitable unless a change is made, the change will not be made until the crisis is manifest – often, when it is too late.

If ever I find the solution to this problem, I’ll post it – or maybe not, because solving that problem is the source of tremendous competitive advantage.

Wednesday, September 6, 2017

Vetting Experience Concepts

Lately, I’ve had rather too many conversations with interns and junior employees who are upset or dejected that their brilliant ideas for new products or product improvements are not gaining any traction.   Sometimes, this is conservatism – a well-established firm tends to assume its success means it’s already doing everything it needs to do to be successful – but in most instances there is an obvious flaw with the idea itself.    I find myself saying the same things, over and over.

What new outcome will this idea achieve for the customer?

This question is the foible of many bright ideas: they are intrinsically interesting, but do not achieve a new outcome for the customer.   It may be an interesting way to do something that people don’t want to do, or a new way to do something that people are already doing by more effective or more efficient means.  In sum, an idea is sustainable only if it offers genuine value to the customer.   Novelty has a very limited appeal.

An effective way to vet an idea for value is to show the idea to a small number of customers (half a dozen is sometimes sufficient) and ask them what outcome they could achieve by using it.   Rather than telling them what you think it is good for and asking them to agree, let them discover the value on their own.

Does the idea have sufficient and sustainable appeal?

If the idea clears the first hurdle, a more intensive investigation should follow to determine the extent of the appeal: how many customers would use this, and how often would they use it?   It may take a sizable panel to get quantitative results – but once you have them, you have a basis for estimating revenue from the product’s release: the number of people suggests market share, and the frequency of use suggests frequency of purchase.

If the idea replaces an existing means to achieve the same outcome, testing it in comparison may tell you whether the idea has a chance in a competitive marketplace (against solutions that already exist) and whether you will be cannibalizing your own sales (which is not bad if the cost to the firm is less for the new idea).

Is it legal?

Particular in heavily regulated industries such as healthcare and financial services, there are many great ideas that cannot be pursued because of legal and regulatory restrictions.   Even if the idea is completely benign, offers good value for dollar, and would be warmly embraced by an audience who’s well aware of the conditions, the precise letter of the law could be used to shut it down and possibly damage the brand if it were released.

Arguably, this should be the first hurdle – but legal advisors are fond of saying “no” without intensive diligence and business decision-makers are prone to go along with their legal advisors unless there is a compelling reason to take a risk.   The market appeal is often necessary to get an executive to tell the attorneys “thanks for the advice, but we’re going to proceed anyway.”

Is it profitable, or at least sustainable, for the firm?

Because money makes the world go around, any idea has to pass the test of financial potential: it has to generate more revenue and/or incur fewer expenses.   At the very least it has to make enough revenue to cover its own cost – otherwise it is leeching resources from more viable lines of business and must eventually be terminated for the health of the firm.  This is true even for nonprofit organizations: any operation has to be sustainable rather than feed upon the life-blood of the organization.

This can be a very difficult hurdle to leap because the cost of the idea has to be paid for out of the revenue.   It is not enough to make a million dollars in additional sales if the expense of providing the idea is $1.2 million for the same duration.   It’s easy to get excited about what happens at the register, while ignoring what is going on in the ledgers.

Caveat: Beware of Unqualified Experts and Self-Vetting

I have a sense that these four questions will help to understand the reason that exciting ideas are shot down – but this is the scope of their value: understanding why the ideas are shot down by others, not limiting your own thinking because of your assumptions.   Be prepared to hear a "no" but do not abandon an idea because you assume that's what you will hear.

Unless you are an accountant, you do not know what will be profitable; and you will think a good idea is not sustainable when in fact it is.  The same goes for market appeal and legal compliance: you are not an expert, and unless you have done a thorough investigation, you cannot say – you must defer to experts, and ensure that their deliberation is thorough.

And apply the same standard when others criticize the idea: I have very often seen a designer attempt to shoot down a product idea saying that it will not be appealing to the customer when he does not know, and until it has been properly vetted, no-one knows.   In this sense, the vetting process works both ways”: it deflates ideas that do not have merit, but may also bolster confidence in an idea that does not seem to have merit, but actually does.