Social technology is heralding a new wave of consumerism and this has startling implication to brands. Your consumer is not just ditching you, they're becoming your competitors.
There's been a slow shift in the balance of power that has been happening for a long time.
Once upon a time, brands held all the power in their relationship with consumers. They withheld information and could afford to charge higher prices, additional fees or get away with bad service because there was a lack of transparency and connection between consumers. Customers put up with it because they didn't know any better or thought this was the norm. And even if they minded, they had little choice but to comply because there were simply no viable alternatives.
Things started to change with Web 1.0 - where the Internet gave consumer the transparency of information online, which disrupted closed group industries (travel, insurance, cars, and electronics etc) and made prices and standards more open. This gave consumers the information they needed to compare between brands, take options, and make informed choices. It also gave rise to direct purchases with e-commerce, cutting out the need for unnecessary intermediaries (e.g. booking a holiday).
Then came along Web 2.0 - this was about the openness of sharing information amongst consumers, i.e. social media. Where people could share content and their experiences with brands (both good and bad) to a larger group of people, forming communities that were passionately for or against brands. We all remember this moment, herald as the great equalizer where brands now had to respond to criticism and complains from consumers or risk the quick outrage of an angry online mob that can quickly grow as information spreads virally through social sharing platforms like Facebook, Twitter, and YouTube.
We're now living in the age of Web 3.0, where social technology is heralding a new wave of consumerism; one that allows consumers to share resources that puts them into a position where they can directly compete with entrenched brands and provide the same services.
This has startling implication to brands – your consumer is not just ditching you, they are becoming your competitors.
The rise of sharing economy has been widely covered. Technology is one of the key facilitators but credit goes to the multitude of tech startups that recognize the gaping hole and opportunities left by slow moving, entrenched brands, creating digital marketplaces that connect consumers with excess resources and those with a demand for it together in a mutually beneficial way.
Think about it. Airbnb fills more rooms than all of the Hilton branded hotels in the world and they don’t own a single bed. It’s simply a marketplace that connects resources to those who need it bypassing the traditional hotel business that has been around for decades.
There are many such examples all born from opportunistic startups and entrepreneurs who themselves were probably disillusioned with what was provided by brands and thought “what if there was a better way”. Things that were once the expected norm are now a thing of the past.
Want to avoid paying expensive charges when you park your car at the airport for a short trip? Flight Car lets you rent your vehicle out to other travelers coming in (and avoid expensive rentals from the likes of Hertz and Avis). Parkers save and make money while renters get a cheaper price.
Want to avoid expensive public cloud computing costs? Gridmarkets allows companies to sell their excess CPU capacity to others that need large amounts of computational power.
Want to avoid expensive office rentals? DesksNearMe allows anyone who needs a flexible workspace to book from others that have desks and office space that’s not being used.
My favorite example is one that's close to my heart. Recently, my mobile provider SingTel announced to much of my dismay and further disdain that they were going to double the price of excess mobile data.
To provide some context: Singtel has recently cut down its data plans from 12GB to 2, 3, and 4GB plans – essentially already increasing the price of post paid data plans. Now, with the already ¼ reduced data in your monthly service bundled, you're expected to pay double the cost of what it was when you exceeded usage.
If Singtel is going to make me pay a penalty for going past my data bundle, why aren’t they paying me if I have excess unused data at the end of each month? This is a simple idea: Instead of paying SingTel’s outrageous costs, I should just be able to use another mobile subscriber’s excess data from their bundles.
Turns out, this already exist in the form of Air Mobs – An app that allows you to sell wireless bandwidth to a stranger near you, in exchange for credits allowing you to buy bandwidth from another stranger in the future.
Taking this one level up, instead of paying expensive roaming charges for using data abroad, CrowdRoaming allows you to share your excess local mobile data with travelers. In return, when you travel abroad, you can also tap on the mobile data from locals at your destination.
Now is the time that brands need to learn to play nice, be transparent, and act in the interest of its customers and not itself or its shareholders.
T-mobile in the U.K. is a great example of behaving consumer first. It disrupted the entire telco industry by dropping the mandatory 2 year mobile phone contract. In addition, it will now eliminate all the ridiculous sky high international roaming charges that consumers have accepted as norm and an acceptable cost for traveling.
Mike Sievert, T-Mobile’s chief marketing officer articulated this form of behavior nicely when he said “Other telcos sit around trying to figure out what customer charges they can get away with. We sit around and think what can we get away with not charging the customer.”
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December 2, 2015
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Wednesday, December 9, 2015
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