Digital Economy: From brand image to personal trust

[Versión en castellano]

In a session at ESADE, I heard  Marc Cortés   saying that in the digital economy customers become members. He meant that the relationship between supplier and customer become bidirectional, instead of being one way, as it is in the industrial economy. Before the Internet, the vendor offered the customer his product (one way model: from supplier to customer), and all the client could then do was to decide whether to buy or not. After the Internet, the client expands its action scope considerably and now he can tell the producer how the products he likes must be and what conditions and characteristics they must meet if the vendor wants him to buy them (bidirectional model).

The customer explains that in a very clear way: Internet social networks are overflowing with comments from customers about the products they buy: whether they are satisfied with the product purchased, whether they are desperate because of a failed buy, whether if they are irritated by a disastrous customer service …

This bidirectionality put in place by the social media, generates an emerging kind of solidarity among customers. Now, customers do not decide to shop by catalog or product information that manufacturers give off-line or on-line, but they rather decide to buy or not mainly based on the reviews that other customers hang on the network.

Manufacturers and suppliers are thus confronted with an entirely new phenomenon: the enormous power that customers have to boost the sales of a particular product… or conversely, to sentence it and therefore ruin the manufacturer.

But is this really a new phenomenon? Yes it is. But only within the historical period of the industrial economy. Before the industrial revolution, business transactions were between people who knew each other very well. People lived in villages or small towns, and mostly bought their products to the most honest reseller, the one who had the most reliable products, and who really solved the problems if something went wrong … In short, customers used to by to the supplier they could trust the most. That ability to deserve trust was often the most prominent competitive advantage. And if, for any reason, the seller betrayed that trust, the criticism and discontent among its direct customers could embarrass him very seriously …

Later on, the industrial revolution allowed to manufacture and distribute products on a scale far beyond the local level. The chain between producer and consumer got longer, introducing new intermediaries that broke their direct relationship. Customers lost their ability to organize themselves in a collective way. In addition, the industrial revolution favored the rapid growth of cities and the emergence of the anonymous citizen who does not know even their neighbors. In this industrialized urban context, more impersonal, transactions between producer and customer are not made on the basis of knowledge and personal trust between them, but on the basis of the trust the client has in the brand. And here comes the one way model that Marc Cortes says the Internet has broken again…

During the industrial age, companies have developed very powerful methods to build brand trust (or brand image). But they have focused on the unidirectional trading model exclusively, where the client can only decide whether to buy or not. Now, these companies must learn to build a trustful new model based on their customers’ direct opinions, since these customers can now spread worldwide immediately what they do want, what they do like and what they do not. Companies must learn to build a personal trust in the context of the aforementioned Marc’s bidirectionality, in a model where the customer’s voice can boost or destroy a business on the simple basis of a powerful viral spread of their opinions.

Again, we see that the power of the Internet is shown in the form of a way back to the habits and ways of living in our ancestral village … turned into a connected global village.

Safe Creative #1210172525440

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