New economy based on relationship commodification

The following column examines and critiques commercial design, as well as provides commentary on current issues and trends in the design industry. Anyone who has read this column even once over the last few months knows that, like a lot...

The following column examines and critiques commercial design, as well as provides commentary on current issues and trends in the design industry.

Anyone who has read this column even once over the last few months knows that, like a lot of other people these days, I am caught in the Web. It has woven itself into the fabric of my days and nights, quietly but irrevocably altering old habits of communication and patterns of behaviour. And because an increasing amount of my company’s business is Web-driven, it occupies more and more of my professional attention as well.

Next to the virtual vineyard in which I toil flows a river called e-mail, in which it seems I’m always paddling upstream. Communication via this channel has almost become a 24-7 thing. I bet there’s one or two coming my way right now – and it’s 11:10 p.m.

Probably over half of the trade publications I read are online. I can’t think of a better medium for the business press. It means the articles are shorter, but business reading should be short anyway. Leaves time for more important things, like novels and the arts section of the newspaper. Trouble is, it’s too easy to e-mail a Web page with an article on to colleagues, which means the business reading pile gets taller as the articles get shorter.

The big words on the Web are ‘customer’, ‘relationship’ and ‘experience’. I can’t help thinking that so-called Old Economy companies must be amused by the fact that the Internet has just discovered the customer. And of course, so-called New Economy companies are too busy trying to attract the attention of investors to notice customers yet. Everybody’s blinded by exponentially inflated valuations and stratospheric market caps. Sell stuff? We can do that later.

The very existence of the terms New Economy and Old Economy illustrates that we are at a loss to explain the current economic conditions. It’s as if they are a new kind of physics, a variation on the parallel universe theory of time travel. In a recent article in The Globe and Mail, Michael Hammer, the wizard of business process engineering and mother of all corporate hatchet men, dismisses the conceit of a ‘new’ economy. He says there is only one economy: The economy of the customer. And I think he is right.

But because the customer can be tracked as never before, the Internet, and now the wireless Internet, make the customer relationship into the holy grail of e-commerce. Because customers can be profiled, what you sell them can be customized to suit their personal preferences. Keep them happy, build an extended dialogue, and you start to build ‘lifetime value’. Jeremy Rifkin, author of the about-to-be-released Age of Access, argues that we have left behind an economy based on the commodification of goods in favour of an economy based on the commodification of human relationships. What the Web can do like no other technology is access customers, creating for companies all sorts of opportunities to buy those customers’ time.

If relationships are king, the online brand experience is the palace. Look for a lot of attention being paid to modeling this experience, constantly retuning it so that customers keep coming back and communities of shared interest are built. If anything, the Web is beginning to demonstrate that branding is more than just your logo. It’s every detail of your customer’s experience from the time they log on to the time they accept receipt of the goods.

And although the dot-coms are getting all the attention these days, I can’t help thinking the bricks-and-mortar brands, though slow to adapt, are ultimately better equipped to build brand experiences online because they’ve had to do it in real time and space. There are those who argue that when they finally do start to take the Web seriously, their combined weight will crush any second-tier dot-coms in their path.

It puts me in mind of a moment I had in a Loblaws store a year ago or so. While ambling through the produce section, I caught a few bars of a familiar Gershwin tune. Thinking it was the PA system, I was impressed because the music was, like, real. It wasn’t Muzak.

As I left the produce section, I realized the reason it sounded so real was, of course, because it was being played by a live jazz band.

As if that wasn’t enough, I knew the bass player. We got to talking about what it was like to do a jazz gig in the produce aisle and he said he was happy just as long as the occasional customer showed signs of appreciation. Which I most enthusiastically did, of course. Having reconciled my passion for jazz with the chore of Saturday morning grocery shopping, I have to say that on balance it was a good experience. It was also an experience that just couldn’t happen on the Web.

Will Novosedlik is a principal of Russell Inc. in Toronto. Russell Inc. builds brands with differentiation and emotional appeal for top-tier companies in both Canada and the u.s. Please direct correspondence by e-mail to will.novosedlik@russellinc.com or by phone at (416) 591-6677.

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