I hopped on here from Ribbonfarm’s roundup post. Certainly an interesting dia-blog-ue going on between the two!

A few thoughts that struck me are:

-There has always been one advantage that a corporate entity exerted over its customer: scale (including access). One point you emphatically make is that scale is now also available to the customer in different ways, and that is the crux of many changes sweeping the marketplace.

-I source ideas, materials and transport channels to reach you this thing that you otherwise would need to spend much more to build or source yourself so you are better off paying me this price. To benefit from that scale I need to find enough numbers of you’s but I manage that, too, through the scale of my marketing activities on which I spend and still make profit. Today’s technology-triggered communication channels of communities have suddenly provided a new counterpoint that a customer is able to make: I now make decisions and choices not based just on your marketing spiel or a limited source of info. from acquaintances or experts who write. I have a growing base of your other distributed customers to listen to, a multitude of brand agnostic info. sharers. I, in turn, also hold the obvious threat of contributing to that collective voice out there that impinges not only on your profit from this transaction of ours, but your future growth.

-Pre-WWW, one example of this model was in user groups of big software companies, a phenomenon they themselves helped create. I am sure there are examples of such groups making life uncomfortable for the company’s product plans.

-I suspect there would be (or have been) instances of industries where this played out in the form of a large network of distributors exercising control over a small number of manufacturers.

-The scale equation has made many global businesses learn to discard their one-standard-for-the-world approach in India (and China I guess). The two cola giants, Kellogg’s and the fast food majors have all made 180-degree turns from their initial stand, and innovated purely based on the pressure coming from potential customers having the advantage of scale.

-MLM or network marketing businesses play a different game. My take on that model is that they avoid this problem by converting customers into the other side of the equation.

-The often-cached, easily-searchable aspect of online forums is significant. A relevant tip in a printed newsletter of a Windows user group in the UK was not accessible to someone in Sri Lanka the way an LG mobile phone user in Azerbaijan could find an undocumented workaround to play a music file quoted in an obscure bulletin board in New Zealand, even if the said post was subsequently removed at the behest of the company ["We forbid such customer manufactured innovative uses of our product..."--oops, did I use a forbidden phrase ]

“Marketing 2.0 is not primarily about learning a challenge, it is about learning to live with less power. And the only way to do that is become nicer, less greedy, more sharing, correct?”

That’s an interesting take, but I would phrase it in a slightly different way–mostly because more mercenary-minded marketers disparage this as being some touchy-feely social fad, which I don’t think is accurate. As the balance of power shifts to buyers, and they have more alternatives to choose from, purchase decisions can be made on more dimensions than just price. The immediate additional concession is customer service and support. With more forums for customers to share experiences and search engines to make those conversations available, prospective buyers have access to real data with significant longitude. “If I buy X product, I can see from all these complaints on the Web that I won’t get good service. Better go with Y.”

But that is already broadening out to other issues as well: “This company is using child labor.” “That company is dumping waste.” All the way down to: “This company’s CEO has offensive political views.” (The Whole Foods debacle.)

To me, the simple way to think about these issues is not the economic frame–although it can be reduced to economics on the operational level–but to approach it from the social frame. That is, after all, the underlying drive of what’s happening. I think the approach is to recognize that what we used to think of clinically as “market segments” have become “networked customer communities”. These communities are growing organically around personal affinities shared online.

The challenge for business is to shift the view from economically precise exploitation to socially effective engagement, understanding there’s a huge economic benefit to this approach in the bargain. Company’s need to ask themselves what are the communities to which they most naturally belong, in terms of being able to provide real value from which they can profit. No one begrudges a company profit, they just want a reasonable exchange of value–and now they have the leverage of competitive choice to ensure they get it. Companies that get it are focusing not only on what product they can provide, but what role they play in the community in delivering value. Is their role the innovator? The low-cost supplier? What are the expectations customers have for this role, and for the exchange of value. If you have that kind of a relationship with your customer communities, my thesis is the cost and risk of marketing is effectively reduced. Not eliminated, but reduced.

You still have to know what you’re core competencies are–ie: the resource-driven company. You still have to advocate on your own behalf and differentiate your self. But your dialog with customers around the expectations of how the exchange of value is understood will take a lot of risk and cost out of what companies currently do by building products on a good guess and seeing if they fly in the marketplace, while flogging the hell out of expensive media campaigns.

I’d love your suggestion for how to make the conversation less straggling. I think we’re on to a good thread.

The shift in ownership of the tools of production, and the decrease in the information asymmetry, to the advantage of consumers, has changed the power balance between businesses and buyers. Marketing 2.0 is not primarily about learning a challenge, it is about learning to live with less power. And the only way to do that is become nicer, less greedy, more sharing, correct?

That is definitely an intriguing new lens through which to look at things. In the past, any shift in power between businesses and buyers tended to be reflected purely in price movements. William Whyte noted as far back as the 50s that the rise of discount retailers could be interpreted as businesses merely giving the more empowered buyers, who were doing some of the work previously done by salesmen and marketers, the money-value of their time in the form of discounts. Ikea is a modern example: you pay less because you assemble and haul.

To build on your argument, I think what will be different in the future is that Marketing 2.0 will no longer be able to use only lower prices as the way to reflect power-relationship shifts. Partly because so many products are already being sold at zero cost due to complex Web economics, partly because operating margins will not provide the room while businesses struggle to adopt more efficient 2.0 cost structures, but MAINLY because buyers are now demanding more than mere price reductions.

Your Kodak example shows, for instance, that buyers are now demanding as a requirement the customer-feedback-driven product development that previously was a corporate choice. No longer can companies make what they like and proclaim “any color so long as it is black.” Now it is “Give me features A and B or I won’t buy, and I’ll twitter to my tweeps not to buy either.”

So a good exercise for the marketing community, including your blog, is to figure out all the dimensions along which concessions must now be made to the more powerful buyer, what those concessions will cost, and what businesses must do internally to their cost models in order to offer those concessions and still make a profit.

This thread between you and me has straggled for a bit, and I am guessing anyone following along might be getting a bit lost. So it is time for me to make the story more coherent by offering up my next set of thoughts. You’ve now gotten me thinking more carefully about what the full “customer experience” really is, and what my definition of “a customer is a pattern of human behavior” definition entails.

Venkat