A new era of customization, privacy and efficiency will redefine the consumer experience altogether
By Doc Searls
For all its promise, “Big Data” — and the fancy analytics that accompany it — has failed to empower customers. It gives companies more ammo to target individuals and tell them what to buy, but real innovation in consumer experience will come from handing the reins over to the customer. Author and blogger Doc Searls explains that we’re entering an era of “vendor relationship management,” where individuals dictate what, where and how they’ll buy.
It’s Monday morning in the summer of 2024. A young professional, while dressing for work, discovers that her toaster is broken. She pulls out her handheld device (formerly a “smartphone”) and describes aloud the features she wants in a replacement toaster and the price she can pay.
Her request is delivered instantly to a variety of toaster suppliers who can meet her needs, which include a desire to limit what they do with her personal information. A minute later she receives a list of toasters for sale, selects one, and later in the day receives a delivery alert.
What’s extraordinary about this example of a future routine purchase isn’t the specific device or software used. It’s the fact that the customer is anonymous to the seller and in control of her shopping experience. She doesn’t go to the store; the store comes to her. More importantly, she manages the buying process — not the other way around — by dictating what she wants, where and when she gets it, and how much it should cost.
I call this future phenomenon intentcasting, which is just one aspect of a broader shift toward vendor relationship management (VRM), a radical shift in the way we shop and buy. VRM will mark the end of Big Data, an era when fancy analytics were designed to understand customers and tell them what to buy — a process known as customer relationship management (CRM).
In the VRM era, a customer operates independently, thanks to technology that makes it possible to create a buying process that is personal and self-directed, much as it was before the Industrial Age introduced mass production and mass marketing. With the Internet, she can communicate with anyone, anywhere in the world, at costs that approach zero. She can set up her own website. She can produce, publish, syndicate and distribute influential ideas, opinions and information globally. She’s showing up online as a human being, and it’s changing how she interacts with companies and, in return, how companies interact with her.
New tools, new powers
Customers who possess these new tools and powers will immediately learn a few things. First, companies will discover that the Big Data era of secondhand, surveillance-based guesswork is ultimately unrewarding — that creating a supply of products first and then chasing customer demand is extremely inefficient. Second, the level of surveillance we’re seeing today comes at the cost of privacy, and the backlash against companies that abuse privacy is growing. Third, free customers are more valuable to companies than captive ones. In a few years, nothing will sound older than marketing talk about “acquiring,” “capturing,” “controlling,” “managing” and “locking in” customers as if they were cattle or slaves.
The tools and powers have long been standard in the offline world. In the physical world customers are anonymous — literally, nameless — when they shop, drive, walk on city streets or meet somebody for the first time. In the physical world, we get to know each other gradually, through a discovery process that each of us likes to control. Whenever people or systems leapfrog that, it creeps us out. We sense a crossed line.
Online, however, we behave differently. We readily give up our identity, thoughts and beliefs to social networks like Facebook and Instagram and allow companies to track and use our data to tell us what we want.
What companies should do now
For companies, the biggest change will be the shift from guessing what customers want to actually knowing what they want.
Inevitably, though, companies will appreciate that everybody is different, because difference is what makes us human. And they’ll discover, too, that when customers are in control of the relationship, they’ll be far more likely to provide better intelligence about what they need and want, both as individuals and as groups. This was an early promise of the Internet in the first place.
Companies like Trader Joe’s are already beginning to think this way. The entire Trader Joe’s marketing system is anchored in and propelled by real conversations with real customers. There are simple prices for everything and no “sales” or discounts. The company improves its products constantly by listening to and applying customer input. The money Trader Joe’s saves by not relying on sales or invasive loyalty programs and the intelligence it gains by listening directly to customers are enormous competitive advantages. The company’s customer loyalty is the envy of all grocers.
She doesn’t go to the store; the store comes to her. Free customers are more valuable to companies than captive ones.
Paradoxically, the shift toward focusing on customers as unique individuals will save businesses money. Huge sums are being wasted today in highly rationalized guesswork mills and mass market campaigns. It would be wise for marketers to take some of the math and science behind these Big Data mills (or at least the budget for it), and apply it toward listening to what customers bring to the market’s table. This doesn’t mean advertising will disappear. But it will continue to do what only it can do, which is deliver brand and promotional messages to large populations. Direct marketing will also persist, but will be driven less by surveillance and more by conscious and voluntary input from customers.
To start, companies should begin working with the VRM developers that help customers and enterprises learn how to work as partners, equals and co-creators in a fair, efficient and friendly marketplace. Companies should begin thinking about including a cloud with everything they sell. When the customer buys a product or service, she’ll buy access to the cloud, too. That, then, becomes the place where both the company and the customer share usage information. Scanning a QR code on the replacement toaster, for example, would give the customer instant access to instruction manuals, warranty information and links for firmware or other updates. This technology, while still in its infancy, will generate unprecedented levels of intelligence sharing between customers and companies, along with far better loyalty going in both directions.
The value of free customers over captive ones
Progress always begets conflict. The Internet creates a virtual world we inhabit alongside the physical one, and making these two worlds work together is a challenge. The best way to face that challenge is to know that, at its base, the Internet is a free and open space where everybody can participate, and where coercive control points and conventions are not welcome.
When customers are in control of the relationship, they’ll be far more likely to provide better intelligence about what they need and want.
Today, however, there’s tension between the principles on which the Internet was founded and how it operates. Twitter, Facebook, Google and Amazon function as hierarchies that control where and how people interact online. Marketers and governments control the masses through these highly centralized services. The Internet isn’t centralized, but distributed. It was created based on the notion of heterarchy, in which any site or person is just as independent, useful and important as any other. We recognize heterarchies in our natural rights to self-determination, freedom of speech and of association.
Because of technology — mobile technology, in particular — customers will restore the balance of power on the Internet.
We began in the future, with a toaster. The young worker looking for a replacement taps into her personal cloud to create a customized “request for proposal.” The vendors never know who she is (other than the fact that she is over 18). When she places her order, the supplier receives the information it needs to process the transaction — but only on its display. She shares only the data she wants to share. In this future, she is operating in a heterarchy.
This heterarchical design is a rising tide that lifts all personal, economic and social boats — and it is on this structural grace that customer liberation and empowerment will rise.