This week sees the launch of the BCCF virtual forum (www.crm-forum.com/bccf/index.html ) on the CRM-Forum, providing CRM-Forum members with documents, news stories, discussion areas, and editorials on buyer centric commerce related issues. See 'Buyer-Centric Commerce - An idea that's come of age' for the first of these editorials. I will be taking an active role in moderating that forum, and I am a member of the steering group that is forming the Buyer centric commerce forum. I’d like to spend the rest of this editorial outlining the reasons for my growing interest in buyer centric commerce, and why I think that all professionals involved in CRM need to keep a beady eye on how it is developing.
For some time now, I have been aware that there’s a significant change in progress in how CRM is developing. Back in October 1999, at a conference in London at the Meridien Hotel, I first used the term ‘Customer Managed Relationships’ to try and distinguish between situations where the supplier company initiates and controls the dialogue with a customer (CRM), and the customer initiates and controls the dialogue (CMR).
This shift in the control of the dialogue to the customer happens at two levels. Certain channels and functions are inherently customer-managed. For example, someone visiting a web-site decides what links they’re going to follow, whether they’re interested enough to read any ‘interrupts’ in the form of pop-ups or other messages from the web-site owner. If we think functions, customer service is usually customer-managed, regardless of channel. Customers contact the service department if and when they have a problem that they want solved.
However, at a much higher level, the customer can take control. In essence, the sales and marketing process is a matching of products and services to needs. That matching process can start with the product / service (Do you need this wonderful product I’m selling? – a push process) or they can start with the need (I have these needs, and am looking for a set of products and services to satisfy these needs. Can you help me? – a pull process).
In the twentieth century, we got used to a predominance of push processes, such as advertising, direct marketing, telesales operatives, etc for this matching process. However, it is important to realise that historically this has been far from the norm, and even in the last century, there was a mix of push and pull. To give some more examples, I’m just back from holiday, and want a memento for my wife to remember it by. So I ask a jeweller to make me a brooch from a piece of coral we found on holiday. I want my kitchen done up, so I ask an architect to come up with a design. I need some food, so I go to the supermarket and select what I want. All examples of ‘pull’ processes satisfying the customer’s needs.
Why has there been so much ‘push’ sales and marketing activity in the last hundred years or so? Because the process of mass-production (for both products and services) meant that products were designed upfront, based on market research of customers’ needs, and once the production mill had started pumping out product, sales and marketing people had to ‘push’ it at customers. Customers were prepared to accept this ‘push’ process because mass production significantly reduced prices.
However, mass-production processes have now got flexible, due to the use of computers and numerical control machines, so suppliers can allow customers to configure the machine they want (see Dell, Ford, and other web-sites). Suppliers are again becoming capable of responding to individual customers’ needs.
At the same time, on the customer side, a number of trends are encouraging the customer to want to move to a ‘pull’ process. Firstly, the emergence of the time-poor cash-rich, and the I-cons (see Where is the Customer in CRM?) is encouraging them to be far more demanding of their suppliers. Secondly, access to the Internet is allowing customers to move closer to a ‘perfect market’, where they can know and understand the features and prices of all alternative options to meeting their needs. Thirdly, customers can band together at web-sites which consolidate customer demand, and provide customers with feedback from other customers with similar needs. See www.epinions.com, http://www.dvdplusrw.org/">www.dvdplusrw.org, or www.dpreview.com/forums for examples of such sites.
It is becoming clear that we are likely to see a radical change in the way that sales and marketing processes are undertaken in this century, reverting perhaps to more traditional pull processes.
Over the past year, I’ve devoted a number of CRM-Forum editorials to the topic, and if you’re really interested in how those thoughts have developed, you could check them out:
• Re-evaluating CRM cliches No 1: One-to-one marketing
• Re-evaluating CRM cliches No 4: Customer Relationship Management (CRM)
• Where is the Customer in CRM?
• The best bank for CRM
• Is the key to successful CRM excellent customer service?
• The future for CRM?
• Significant new trends in customer service, sales and marketing.
Perhaps the foregoing outlines why my interest in buyer centric commerce has developed, but one question remains outstanding. Why have we changedd from customer-managed relationships (CMR) to buyer centric commerce? The following quotation, from Alan Mitchell in A buyer-centric world, published in the BCCF Forum, should answer that:
“‘Buyer-centric’ and ‘customer-centric’ are not the same. In fact, they’re opposites. Seller-centric companies are naturally obsessed with ‘customer focus’ and ‘customer-centricity’. But this ‘customer-centricity’ is actually the ultimate expression of a seller-centric mindset. Sellers are interested in customers as a market for their products. They want to get close to, understand better, and focus on customers for their own seller-centric purposes: to understand better what to make (so that they can sell more, easier, more profitably); to identify potential buyers and persuade them to buy more, more often. For the seller-centric company, customers are a means to achieve seller-centric ends, whereas for the buyer-centric company, sellers are a means to achieve buyer-centric ends. Indeed, the very term ‘customer’ is seller-centric: a customer is defined solely in terms of his relationship to a seller.”
Is Forsyth wandering off, all on his own, with this change of emphasis? I was pleased to find that there are others with a similar mind-set. In particular, Alan, quoted above and author of the first detailed book on buyer centricity, Right Side Up (HarperCollins, 2001), has put, and is putting, significant effort into developing these concepts. And it is not only individuals who are working in this space. Netonomy and Budd UK, for some time now have been associated with customer-managed relationships. A new company, Prism Services Ltd, has also been set up with a view to working in the buyer centric commerce space. These companies, and a few individuals, have got together to form the Buyer Centric Commerce Forum, who’s aim is to explore and encourage thinking about and understanding of the concept of buyer centric commerce, to help develop and promote best practice and its application, addressing an audience of people who can make a change to buyer centricity happen in their context.
Probably more importantly, there is a growing body of evidence that buyer centricity is coming into prominence in the public and private sector. The UK’s Department of Trade and Industry recently published a report from Ovum called ‘Analysis of the multi-channel software, digital content and related services converged business space’. Although this report is primarily focused on Multi-channel services, it recognises, though it does not use the term, that buyer-centricity is the ‘killer concept’ (not application because it isn’t software) that will lead to the rapid development of these multi-channel services.
In the commercial space, things are also beginning to happen. Prism Services Ltd have run a survey of UK businesses interested in the buyer-centric concept, and companies such as Barclays, Barclaycard, Royal Sun Alliance, Standard Chartered and Travelex in the Financial Services space, Nokia, Orange, and T-Mobile in the telco space, as well as less well-established companies such as TenUK and Y-club are somewhere between considering strategic options relating to buyer-centricity or having already implemented buyer-centric services. The management summary and recommendations of this Prism report are available on the BCC Forum.
So it looks as if buyer centricity is rapidly going to come of age. If you are interested in exploring the concept further the following links on the BCC Forum may be useful:
For an overview of buyer centric commerce concepts:
• A buyer-centric world (by Alan Mitchell)
• A comparison of buyer-centricity, customer-centricity, and customer-managed relationships (CMR) (by Alan Mitchell)
For more on the buyer-centric markets survey:
• Free summary: Buyer Centric Markets Survey 2002 Summary and Recommendations
• Purchase the complete report (Purchase Price: £ 390.00 GBP ex VAT (£ 458.25 GBP inc VAT )
There’s also a discussion forum, news stories, and editorials at the BCCF Forum.
As always we’d like to hear your comments. Make them below or email me at [email protected]