The new economy

Member Article

Customers and the new economy

For years now people have been talking about the new economy. Disruption, change and freedom have all come in its wake and have revolutionised the way we live and the way we work. But if the effect in our day to day life as consumers has changed, what does it mean for companies?

For some, the effect has been obvious and immediate. They’ve been driven out of business or at the very least into a decline that looks terminal. We can all think of our own examples but print journalism, physical book stores and TV all spring to mind. For others, the future is less clear however. People will still want hotels even if we have Airbnb. Some will no doubt close down. Maybe they’ll be sold, converted into flats and rented on Airbnb again; but others will survive. The question is, why will some survive and others won’t? The answer is because they add value to their customers’ lives and will continue to do so.

It may seem simplistic or obvious to suggest that companies survive when they add value to people’s lives, but in fact many companies have simply become used to the idea that the only things they need to compete against are each other. If it’s a race, then running faster than everyone else will always let you win, but what about when the ground disappears from under your feet? In the new economy you’re no longer just competing with the opposition, because your whole industry may no longer be the only option for the consumer.

The new economy has made people reassess their place in the world relative to others. When you can share your car or even your pet with someone via an app. When you can barter marketing expertise for a plumber or set up a shop without ever owning a shop the world starts to look very different. In this world, a single company or its competitors are no longer your only options.

Companies have already begun to make changes to the ways they work. For example Corporate Social Responsibility (CSR) is now hardwired into many companies. Shareholder meetings for companies like Facebook explain how they will remake the world next before they mention anything so prosaic as profits.

But these changes to how companies operate are well documented. They are top down and easily recognisable. The big idea here is at the other end of the scale – the need to change how companies work from the bottom up; how they see their customers, their employees and other companies whether they be suppliers or competitors.

One of the most obvious ways to see this in my own industry (marketing and advertising) is promotional events. It used to be that turning up somewhere with some leaflets and a table was enough to attract customers. They would speak to you because you were there and their options were limited. In the new economy, a search on my phone can offer me thousands of alternatives, not just to your company but also to giving you my attention. How then can you intrude on someone’s time and make them happy about it? Certainly not via the internet: targeting and automation may be becoming more efficient every day but unfortunately Ad blockers can’t decide what content is relevant and good and what is not. They’re the result of companies spending years seeing consumers as cows ready for milking, incapable of choosing not to be there, happy to make them angry just so long as they kept the thin trickle coming. In the new economy this will no longer work, companies have to start seeing customers as equal partners and this means bartering for their attention.

So what do you offer people in return for engagement? You offer them an experience. Replacing the advertising of the past with a new equally passive alternative is not enough. You need to replace it with something that people are actively engaged by and happy to see. Experiential is one answer to this, it provides a way of paying for customers attention with experiences. People love to photo themselves with something attention grabbing and memorable. They love to try new food, get something customised or play a game. While with VR the opportunities are endless! Companies benefit too, they don’t just gain more attention for their products; they get the opportunity to engage directly with consumers and give a more customer focussed proposition. By far the biggest bonus companies get is the opportunity to leverage their customers’ networks. Experiences are some of the most photographed shared and viewed parts of social media. They’re a staple for the Snapchat aficionado and they’re what set the next Instagram sensation apart from the humdrum world the rest of us live in. If bartering is the foundation of the new economy; then connections are the new currency.

But it can’t stop there either. Customers require your attention just as assiduously after the sale as before. Once you’ve won them and their network, the last thing you want is for them to turn against you. Instead, by capitalising on your gains and maintaining contact and service with your customer, you not only gain their custom but you effectively bring them into the fold as a brand ambassador. If your first thought about this new way of working was it just sounds like more effort and more expense, then you still don’t understand. In the new economy, everything is an exchange that means that the more you give to the customer; the more you get back from them. There is no more effective or cost-effective way to market your business than to let your customers do it for you.

This extends beyond your customers though. Treat your staff the same way, see them as partners in a common goal and see other companies, suppliers or competitors as equals to deal with not get one over on. The old economy is dead. Profound change has come to people’s lives as a result and that is only going to go further. Its replacement will provide a more honest and open way. One which sees companies and customers as partners, understanding and supporting one another. The old economy is dead, long live the new!

This was posted in Bdaily's Members' News section by Peter Edwards .

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