This is the opening chapter to The Intention Economy: When Customers Take Charge (Harvard Business Review Press, 2012), by Doc Searls. Fulfilling its mission is a goal of Customer Commons, thus making it our manifesto.
This book stands with the customer. This is out of necessity, not sympathy. Over the coming years customers will be emancipated from systems built to control them. They will become free and independent actors in the marketplace, equipped to tell vendors what they want, how they want it, where and when—even how much they’d like to pay—outside of any vendor’s system of customer control. Customers will be able to form and break relationships with vendors, on customers’ own terms, and not just on the take-it-or-leave-it terms that have been pro forma since Industry won the Industrial Revolution.
Customer power will be personal, not just collective. Each customer will come to market equipped with his or her own means for collecting and storing personal data, expressing demand, making choices, setting preferences, proffering terms of engagement, offering payments and participating in relationships—whether those relationships are shallow or deep, and whether they last for moments or years. Those means will be standardized. No vendor will control them.
Demand will no longer be expressed only in the forms of cash, collective appetites, or the inferences of crunched data over which the individual has little or no control. Demand will be personal. This means customers will be in charge of personal information they share with all parties, including vendors.
Customers will have their own means for storing and sharing their own data, and their own tools for engaging with vendors and other parties. With these tools customers will run their own loyalty programs—ones in which vendors will be the members. Customers will no longer need to carry around vendor-issued loyalty cards and key tags. This means vendors’ loyalty programs will be based on genuine loyalty by customers, and will benefit from a far greater range of information than tracking customer behavior alone can provide.
Thus relationship management will go both ways. Just as vendors today are able to manage relationships with customers and third parties, customers tomorrow will be able to manage relationships with vendors and fourth parties, which are companies that serve as agents of customer demand, from the customer’s side of the marketplace.
Relationships between customers and vendors will be voluntary and genuine, with loyalty anchored in mutual respect and concern, rather than coercion. So, rather than “targeting,” “capturing,” “acquiring,” “managing,” “locking in” and “owning” customers, as if they were slaves or cattle, vendors will earn the respect of customers who are now free to bring far more to the market’s table than the old vendor-based systems ever contemplated, much less allowed.
Likewise, rather than guessing what might get the attention of consumers—or what might “drive” them like cattle—vendors will respond to actual intentions of customers. Once customers’ expressions of intent become abundant and clear, the range of economic interplay between supply and demand will widen, and its sum will increase. The result we will call the Intention Economy.
This new economy will outperform the Attention Economy that has shaped marketing and sales since the dawn of advertising. Customer intentions, well-expressed and understood, will improve marketing and sales, because both will work with better information, and both will be spared the cost and effort wasted on guesses about what customers might want, and flooding media with messages that miss their marks. Advertising will also improve.
The volume, variety and relevance of information coming from customers in the Intention Economy will strip the gears of systems built for controlling customer behavior, or for limiting customer input. The quality of that information will also obsolete or re-purpose the guesswork mills of marketing, fed by crumb-trails of data shed by customers’ mobile gear and Web browsers. “Mining” of customer data will still be useful to vendors, though less so than intention-based data provided directly by customers.
In economic terms, there will be high opportunity costs for vendors that ignore useful signaling coming from customers. There will also be high opportunity gains for companies that take advantage of growing customer independence and empowerment.
Customer independence and empowerment have always been implicit in the nature of the marketplace, and in the nature of the Internet as well. But while the marketplace is as old as civilization, the Internet is still new. Born in 1995, the graphical browser is still a teen. And while the Net has already transformed business and society throughout the world, it has done so mostly on the supply side, with tremendous innovations in production, supply chain management, marketing, sales and other functions. Synergies between online and offline business operations and practices have also improved to the point where it is impossible for most businesses, especially large ones, to imagine working without the Internet.
But much has not yet changed. The legal frameworks for doing business online are as absurd and broken as they were in the age of shrink-wrapped software. Marketing and sales have made great efforts to become more “conversational” and “social”; but customers in too many cases are still “assets” to be “managed.” Implicit in this mentality is a belief that the best customers are captive ones, and that therefore a “free market” for customers means “your choice of captor.”
This twisted norm will end because free markets require free customers. The Internet by its nature invites developments that will equip customers with tools for both independence and engagement. Over the last decade many developers have accepted that invitation, and have started work on tools that will make customers both independent of vendors and better able to engage with them. These tools will also become the means by which individuals control their relationships with multiple social networks and social media.
These tools comprise a new category of capabilities called VRM, for Vendor Relationship Management. VRM tools work as the demand-side counterpart of vendors’ CRM (Customer Relationship Management) systems. In the highly competitive CRM marketplace, winners will be those that best engage customers’ VRM systems.
Creating the Intention Economy won’t be easy or smooth. The flywheels of Business As Usual are huge. The Attention Economy is deeply normative and entrenched. Google alone has advanced the science and practice of advertising to the point where advertising pays not only for all of Google’s many free services, but also for much of the other stuff we take for granted on the Net. The upward trends of both revenue and investment in advertising remain steep. Today many billions of dollars per annum are being invested in start-ups with advertising either as a purpose or as a revenue model. Many companies are also working hard to improve advertising by personalizing it to the Nth degree.
But perfectly personal advertising is a dream of advertisers, not of customers. In the last few years the online advertising business has become obsessed with mining, harvesting and crunching large sums of personal data, in ways that are invisible to ordinary users of computers and phones. A backlash against this is underway, with predictable appeals for government intervention and other counter-measures. This book, however, is not part of that backlash. Nor is the VRM movement. The case for Customer Liberation and the Intention Economy is not one against advertising or its excesses. It is the case for a new set of customer capabilities, and the effects of those capabilities—on vendors, markets, society and the whole economy. And it is for Vendor Liberation as well.
Freedom requires means. Freedom of speech began with the human voice and grew from stone tools through pens, typewriters, computers, networks and software for writing, editing, publishing and syndicating. Likewise our freedom to build things, which also began with stone tools, now includes nail guns, drills and power saws.
The VRM tools in development today are still at the hammer and screwdriver stage. But the nail guns and power saws are not far behind, because even primitive VRM tools will prove that free customers are more valuable than captive ones—to themselves, to vendors, and to everybody else. Once that starts to happen, investment and development will snowball.