Free Markets Require Free Customers

Customer Commons stands with the customer.

This is out of necessity, not sympathy. Over the coming years customers must and 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, 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 as well as collective.  Each customer will come to market equipped with her own means for collecting and storing personal data, expressing demand, making choices, setting preferences, proffering terms of engagement and arriving at agreements, offering payments and participating in relationships—whether those relationships are shallow or deep, and whether they last for moments or years.

All those means will be standardized. No company 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. This means customers will have means for protecting their privacy and signaling to others how their privacy should be respected. Customers  will also be in charge of personal information they share with all parties, and how that information is used.

Customers will have their own means for storing and sharing personal 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 chosen vendors will enjoy membership. This means vendors’ own 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 way: 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: ones  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, companies will earn the respect of customers who are now free to bring far more to the market’s table than the old company-side systems ever contemplated, much less allowed.

Likewise, rather than guessing what might get the attention of consumers—or to “drive” them like cattle on a “journey” into a “funnel”—vendors will respond to the 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 will be an 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 obsolesce 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. The market for tracking–based advertising (aka adtech), which has permeated the commercial Web since the early ’00s and depends entirely on violating personal privacy, will collapse as mutually respectful ways for demand and supply to engage are found.

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 only decades ols.  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.”

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.

Customer Commons’ purpose is to equip customers with those tools.

[unfinished]

This is adapted from the opening chapter to The Intention Economy: When Customers Take Charge  (Harvard Business Review Press, 2012), by Customer Commons co-founder and board member Doc Searls .