When Henry Ford introduced the first assembly line for manufacturing the Model T, the price of a car dropped to $265 by 1925. This lower price threshold eliminated barriers to purchase for the average worker and signaled the start of the Industrial Era.
Industrial production became so efficient suddenly that companies found themselves in the position of needing to create demand. This demand-creation model ushered in the era of what was known as the consumer economy and the domination of mass media as a marketing tool. Consumers were suddenly bombarded with messages urging them to fill their lives and their homes with all manner of goods.
After the financial crash of 2008, Millennials, who grew up turning off the TV and ignoring web advertising, began to dominate the economy. Mass media found itself competing with social networks like YouTube, Facebook, and Twitter.
Modern consumers are savvy and highly engaged, and the demand personal attention and stellar experiences. They refuse to be passive “consumers” and actively seek out engagement, from editing Wikipedia entries, to sharing customer-service highs-and lows-on their social networks, and beyond this going for peer-to-peer services sharing their houses, cars, households items or leaving their dogs for a week-end to a host.
Welcome to the Creator Economy. Here are five guiding principles for this new era.
No 1: Change the Customer Relationship
Instead of keeping the customer under control, companies should embrace the paradox that the best way to retain customers is to set them free. They should engage with the customer on a one-to-one basis while bearing in mind that every point of engagement matters.
Each act of engagement, whether it’s a tweet, a click, a location check-in, and an IoT sensor reading can be used to not only optimize the customer experience in real-time, but to create the fundamental business value that drives business models in the creator economy. It’s all about engaging with the customer by sharing relevant content based on real-time context.
No 2: Change the Partner Relationship
The go-to-market strategy has to evolve from a traditional linear process to a multi-sided business model where transacting business with, through and on behalf-of third parties is key to the success of the business model.
Third parties see great value in those established customer relationships and recognize the service provider as a potential distribution channel for their own service offerings. For the service provider, this creates a virtuous circle inherent to the multi-sided platform opportunities. The value for end customers grows with combined offerings, customer loyalty increases, the customer base is broadened and consequently attracts more partners.
No. 3: Disrupt your own revenue models
Companies are transitioning from selling products to selling a personalized service, a specific experience or a negotiated outcome. While we are more familiar with subscriptions within the software industry, we see this model now arising in the manufacturing space with brands like Rolls Royce, Hilti, Lexmark, and even x-ray machines.
Selling an outcome becomes a new way of engaging with a customer. Rather than measuring the service delivered, instead the focus will be on gauging the actual business benefit. This requires companies to structure their business models to operate not based on what they can package, sell and measure, but rather based on what downstream benefits are generated and how much they contributed to that outcome. The focus must be on value, not revenue.
No. 4: Plan and build a secure, scalable infrastructure
Growth strategies will have implications that you have to take into consideration when considering your delivery process. Be prepared for:
- Smooth and efficient expansion in new regions where currencies will be different, and payment habits will differ as well: improving local payments such as introducing invoicing rather than cash on delivery can be key to increase the check-out conversion rate.
- Managing high volumes of customers and transactions that will grow by multiple orders of magnitude when moving from product to service.
No. 5: Agility should be part of your DNA
While constant efficiency improvements are a prerequisite for a healthy bottom line, it is no longer sufficient in the creator-economy landscape, which is an iterative and rapidly changing economy.
Companies have to go for simplicity, provide autonomy and embed intelligence directly into the production and business processes to help them adapt quickly to changing needs. Simplicity can take the form of a cloud delivery model, autonomy can translate into micro-services and APis to add/build new functionalities through a community of solution providers, and intelligence can be called sensors, analytics, predictive capabilities, and in memory database.
These five steps should set you on the way to become customer experience leaders in this creator-economy era.
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