In an earlier article, I noted the death of the concept of “the B2B corporation”: In a world in which power has shifted to the customer, there is no such thing as a “business to business corporation.”
… when a
firm is providing products or services to another firm which acts as an intermediary for ultimate end user, the customers are the end-users who ultimately experience the products and services. Merely satisfying the needs of the intermediary is not enough for sustainability. It’s only if the intermediary is delighting the ultimate end user that the firm safe. This is why those doing the work need to have a clear line of sight to the ultimate end-user and see the meaning in their work and adapt their work to the needs of that end-user.
Now, in an interesting article in strategy + business, Peter Schwartz makes the case that even a “business to customer corporation,” or “B2C business” is equally obsolete. Thinking of the person who buys products or services as a generic “customer” fails to capture the possibility—and coming necessity—of treating each person as a unique individual.
Instead,” argues Schwartz, “we should begin thinking about ‘B2I,’ in which the I stands for individual. Companies succeed or fail these days based on their ability to build and maintain lasting relationships with individuals. We have to earn our customers’ trust or those relationships will not grow. Labeling a person a consumer reduces them to a single activity in their life: buying stuff. People who like corn chips do not walk around saying, “I am a buyer of corn chips.”
Reversion To A World Where Purchases Are Personal
Once upon a time, most purchases were personal. The seller was also the maker of the product. The seller knew the customer personally and adjusted the product to meet the needs of the particular individual. Through repeated fittings, the tailor or seamstress came to know the customers: their measurements and their preferences.
That ended with mass production and large-scale retailing. Products were designed in styles and sizes to meet to fit many people “more or less.” “Ready to wear” replaced “made to measure.” Customization disappeared from most purchases as people bought clothing off the rack, with sizes and styles designed to fit many people.
In one sense, B2I represents a kind of reversion to this pre-industrial world, when most purchases can be personal.
Today, when it is possible to connect any thing or person with any other thing or person at or near zero cost, it once again becomes possible to meet the needs of each individual in an intimate frictionless way and do it on a massive scale.
- Google search. When I search for “restaurants, ”I don’t have to tell Google I happen to be in Alpbach, Austria: Google already knows that and offers me a selection of “restaurants in Alpbach, Austria.”
- Spotify’s Discover Weekly. Drawing on the categorization of more than 20 million songs and its tracking of the listening habits of its more than 150 million users, Spotify uses machine learning to deliver each week a playlist of 30 new songs, tailored to the idiosyncratic preferences and moods of each individual listener. Even better, Discover Weekly keeps learning from each listener’s interactions with the service to provide a steadily more accurate prediction of what will delight the listener.
- Netflix and Amazon: Media viewers expect a seamless transition from where they left off a television programme or novel on a tablet to when they access the content on a smartphone.
- Customer support: Delivering a seamless experience and contextual awareness for other parts of the customer lifecycle – for example, personalizing customer support – can improve loyalty and create additional cross-sell opportunities. The customer is not just an anonymous caller who has to struggle to acquaint the firm with her needs: instead, the firm’s respondent has instant access to all previous transactions, likes and preferences and can treat the customer as someone who is recognized and known and understood.
Responding To The ‘Market Of One’
In effect, the mass market is shrinking to “a market of one.” It’s a level of customization and customer service at which a customer feels that he or she is an exclusive or preferred customer of the firm.
Doing so can create a competitive advantage through being more proactive and responsive. Yet what has been a competitive advantage for firms that have managed this level of intimacy is now becoming a requirement. Customers are expecting or even demanding this level of performance.
The challenge for firms is to organize the necessary multidisciplinary approach to make it happen. Marketing departments may lack the expertise to manage the technology and navigate the risks and privacy issues, while the information technology departments may lack the marketing smarts to pull it off. As data collection and customer analytics become core to many businesses, there will be pressure for CMOs and CIOs to collaborate and even merge their efforts for the good of the whole firm.
The Risk Of Creepiness
At the same time, firms have to be careful. Schwartz cites the following hypothetical example:
… imagine a business traveler walking into a hotel room designed by a company that knows how to craft a B2I experience for its frequent visitors. The room is populated with photos of her family generated in digital frames. The temperature of the room and the lighting are just the way she likes them. Her favorite music is playing. In her inbox is an email asking if she wants the salmon Caesar salad — without croutons — that she ordered last time from room service. She turns on the television and it suggests a movie she hasn’t seen, starring her favorite actress. A rental car of the make and model she has been eying to purchase is available at the hotel, along with a reminder to take her allergy medication if she takes a drive in the country.
We can imagine that without necessarily wanting it. The reminder that the hotel has access to all this information could turn off more hotel guests than it might delight, unless the guest has expressly requested those kinds of touches, and has the ability to turn them off at the press of a button, if she changes her mind about giving access.