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The business of consumer empowerment: Why it's time to ditch customer controlby
10th Sep 2010
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The days of trying to exercise control over your customers is coming to an end. As Alan Mitchell explains, the best way for organisations to attract and keep customers is now to empower them and help them.
In a famous study conducted in the 1980s, researchers gave residents of a nursing home different degrees of choice over their lives. On one floor, residents were allowed to choose which pot plants they could have and were given responsibility for watering them. Collectively, they could also choose which night was movie night. On another floor, residents got exactly the same deal in terms of pot plants and movie nights, but this time the nurses chose for them.
The patients on the floor with a sense of increased control not only became more cheerful and active, they also became healthier. Eighteen months later, the death rate on the ‘sense of control’ floor was half that of the ‘no control’ floor.
Numerous studies have confirmed the same basic finding, from many different angles. The other side of a sense of control or empowerment for example, is one of no control, helplessness. Back in the 1960s for example, 1960s Martin Seligman, now a doyen of the positive psychology movement, conducted some tragically sad experiments on dogs. He punished the poor hounds with small electric shocks for whatever they did, ‘good’ or ‘bad’. Eventually, they just gave up. For example, when they were placed in a position where they received electric shocks they didn't move away, even when they could. As Seligman put it, they had ‘learned helplessness’ – a phenomenon he later linked to depression in human beings.
The message of these findings is simple: a sense of empowerment or control is a powerful emotional benefit in its own right. Tesco CEO Terry Leahy highlighted this in a speech recalling his early years on a Liverpool Council housing estate. "Choices were more limited," he said. "So small things matter. The ability to make a choice gives you power in your life. They may be small choices but they can add up to a sense of control and purpose. People draw tremendous self-esteem from being asked to choose – from being trusted."
More recently, research into the psychological drivers of human motivation has uncovered related patterns. If you want to get somebody to do something, you can always resort to carrots and sticks; incentives and punishments. But, it turns out, people will often do far more if they want to do it anyway, for its own sake – because doing it makes them feel good. Even more intriguing is the finding that externally imposed carrots and sticks often ‘crowd out’ intrinsic motivations, undermining rather than reinforcing them. So if you try to ‘incentivise’ somebody to do something they wanted to do anyway, they may lose interest. Why? Because the carrot (or stick) represents ‘somebody else controlling me’ rather than ‘me pursuing my own goals and purposes’.
Driving human motivation
The big three drivers of human motivation, it’s now thought, are not externally imposed incentives and rewards but internally generated desires for a sense of autonomy (being able to pursue your own purposes rather than being subservient to someone else’s); mastery (having the skills and abilities to actually achieve these goals); and the sense of purpose itself (all the better if it creates a sense of belonging, connection and relatedness with other people).
Findings like these could become crucially important for organisations as they try to navigate the swirling cross-currents of growing consumer empowerment. Try thinking about some of the things that really frustrate you. High amongst them (almost certainly) are:
- ‘I am not able to express myself’. Not being able to speak your mind – being silenced or muzzled – is hugely disempowering. Giving people a voice is often value-adding in its own right.
- ‘I don’t know what to do’. Not knowing what the right thing to do is can be a source of great anxiety. Any person or service that helps individuals make better decisions – and to feel confident about these decisions – can therefore add huge value.
- ‘I don’t know how to do it’. This breeds a sense of frustration and impotence, so any person or service offering trustworthy advice is also offering value.
- ‘I know what I want to do and how to do it, but I don’t have the means to actually do it.’ This can be immensely frustrating, so equipping people with the tools, infrastructure and mechanisms to do things for themselves can be another source of real value.
If we think about it, this short little list represents some pretty deep, universal human needs. The crop up whatever industry you are in, whatever your specialist product o category. All of us want to know what to do: to be able to make better decisions. We want to know how to implement these decisions, and to have tools and resource to actually do so. We want to be able to express ourselves and to explain what we want to other people.
The five waves of empowerment
Now take a look at how the trend towards increasing consumer empowerment is unfolding.
Once upon a time, empowerment was limited to choice between a quite limited set of products in a quite limited set of categories. (You might be able to choose which choc bar to buy but not what school or hospital you went to, which telephone company to use, and so on). So that’s the first wave of increasing consumer empowerment: increased product choice.
The second wave of empowerment shifted choice from products and services to sources of information. It started in traditional media with the proliferation of newspapers, magazines, books, TV channels and radio stations. Then it extended to the internet, so that increasingly consumers could not only choose products and services, but also the information they used to make decisions about these products and services (such as peer reviews, price comparison sites and so on).
Wave three came as empowerment extended beyond choice to voice. The industrial age world of product choice was still a top down world, where all the information flowed only one way: from the organisation to the individual; from the marketer to the customer. Since the turn of the century however, ‘bottom up’ information from individuals to organisations and each other has been moving centre stage. It has created a new arena of personal empowerment: the ability to express one’s views, opinions and feelings, and for many it has been a liberation.
The fourth wave of consumer empowerment is only just beginning. It takes ‘voice’ beyond its early, rather chaotic form of unstructured personal expression (as exemplified by peer-to-peer social networking) and supplements it with increasingly structured and disciplined personal information management. This the world of personal data stores and volunteered personal information where individuals can go beyond generalities such as ‘I like this’ or ‘that sucks!’ to specify exactly what they want, when, and to provide all the necessary supporting information.
The fifth wave of consumer empowerment is also only just beginning. It’s when individuals have access to the tools, infrastructure and services they need to do things more efficiently and effectively: not only to make the better decision but to implement it better too; to make plans; to organise, coordinate, administer and so on. Think of this is SaaS (software as a service) applied to individuals, equipping and empowering them in the organisation and management of their day-to-day lives.
The bottom line is this. We are emerging from an industrial age where the organisational agenda was one of control. Organisations needed internal control in order to be able to make and deliver products and services efficiently. And they sought external control too – control over customer attitudes and behaviours so that customers would fit the organisation’s agenda: ‘buy our brand’, ‘interact with us in a way that’s easy and cost-efficient for us’.
This environment created an underlying assumption that ‘knowledge is power’ – something to be hoarded and kept behind closed doors because knowledge told you how to exercise control.
Today, this agenda – and the mindset that lies behind it – runs increasingly counter to both the emotional and practical demands of customers, for whom increased control/ empowerment is a) a means to an end (i.e. ‘achieving what I want to achieve more efficiently and more effectively) and b) a significant benefit in its own right, because of the intrinsic emotional rewards it brings.
It means that, increasingly, the best way for organisations to attract and keep customers is not to control, influence or persuade them but to help them – to empower them by re-purposing the organisation’s knowledge, skills and resources as a tool in the customer’s hands. To put it starkly, in the emerging environment, if you do not get into the business of empowering your customers, you may not be in business at all.
Alan Mitchell is a founder of Ctrl-Shift and Mydex, the personal data store company.
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This is the best piece of enlightenment I've had in weeks. You have nailed the key drivers and organised them in a useful list and progression thank you.
this article is very insightful. it is now something of a cliche to say that the customers have control but i think it is true and this is as good an explanation i have read for how businesses can leverage this change to 'help customers help themselves' and ultimately also benefit as well.
This is a very good article and brings out key concepts applicable across industry segments. Coming from a Telecom industry background, I see a need for Telcos to actively take steps beyond trying to get insights into Customer behaviors and managing Customer Experience to Empowering Customers to decide what , How and where they want and at what price and quality. This will enable Telcos to concentrate on managing their Services so as to continuously and efficiently cater to ever changing and widely diversified service requirements and yet have satisfied and happy customers.