Welcome to this first editorial of the BCC Forum. This week sees the launch of the buyer centric commerce forum on the CRM-Forum, one element of the re-launch of the CRM-Forum as 'The CRM-Forum: The Enterprise Software Community' (see All Change).
So what is buyer centricity, and what is the purpose of the BCC Forum? You will find an outline of buyer centricity in the article, A buyer-centric world, and we've also published a comparison of buyer-centricity, customer-centricity, and customer-managed relationships (CMR) to help you understand how these concepts differ. As you’ll find in the Overview of the BCCF, the aim of the BCCF 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.
Obviously, the people who are forming the buyer centric commerce forum (see BCCF Steering Group) think that buyer-centricity is an important development, but is there any real evidence that this concept is going to have any real impact in the marketplace? I intend to spend the rest of this editorial focusing on two key reports that I believe offer significant evidence for this: a recent Ovum report for the UK government’s Department of Trade and Industry (DTI), and a survey of Buyer Centric Markets undertaken with primarily UK-based companies, undertaken by Prism Services Ltd.
Let’s start with Ovum’s report for the DTI, ‘Analysis of the multi-channel software, digital content and related services converged business space’. (N.B. you need to register as a user on 'UK online for business' to access the report.) This report is focused on the growth of a strong digital media sector in the UK. The report indicates that multi-channel services will happen with revenue potential of $245billion (£172 billion) by 2006. Realizing that potential, according to the report, is not dependent on a killer application, but a killer concept. What is that killer concept? Well, although the report does not use the word ‘buyer centricity’, it is, in essence, the killer concept. Let me quote from the report:
“As the complexity of the market increases, and as the end user becomes more instrumental in defining what services (even bits of services) they want to receive, when, where, and how, so the definition of what will prove a successful money generator becomes much broader. Rather than thinking about one specific piece of content or application, players must address what end users might want when, where, and how (that is, according to their own particular context), almost on an individualistic basis. They have to think more in conceptual terms about which type of service is appropriate to whom, where.”
Now this is almost a definition of buyer centricity, though of course I would argue that it applies not only to digital media, but also to all suppliers of business – consumer products and services. Speaking with people working within the DTI, it seems clear that they have taken this report very seriously, and further funding has been provided to continue DTI research and developments in this area, particularly raising awareness amongst companies, public sector organizations, and consumers, and isn’t that just about everybody?
Of course, although government may identify an area as significant, that doesn’t necessarily mean that the private sector will do anything about it. Is there any evidence at all that the private sector is beginning to take buyer centricity seriously? This is where the Prism Services report, Buyer Centric Markets Survey 2002 is helpful. (A copy of the management summary of that report is available for download on the BCC Forum, and the full report can be purchased here.)
This survey involved a number of primarily UK companies, including Barclaycard, Barclays, BP, CNN, Envigo, Mandarin Future, Nokia, Orange, Royal Sun Alliance, Securicor, Standard Chartered Bank, TenUK, T-Mobile, Travel Councellors, Travelex, and Y-Club – a mixture of major corporates, and SME companies, from a variety of market sectors. Some of the more interesting findings of the report include the following:
· All businesses recognized the need to do better for their customers.
· No participant denied the existence of the ‘new consumer’ in their own customer base. Some went further and recognized that the ‘new consumer’ does not fall into classic segmentation models. Many participants agreed that the ‘new consumer’ was harder to reach than traditional consumers. There was general acceptance that traditional market communications were decreasingly useful. New techniques such as viral marketing and online communities were seen as valuable, and some participants were actively using or experimenting with them.
· A new idea was that buyers might control their own data, and disseminate it under their control to potential suppliers.
· Some of the participants were familiar with the concept of a customer scenario, were interested in understanding these scenarios and believed they should have some impact on their business.
· Few participants had fully considered interaction from the customer’s perspective, though we are all familiar with the irritations of call centers, and the high level of aborted internet transactions. Often, channel selection for an interaction was for the seller’s benefit, rather than the buyer’s.
I draw two key conclusions from this. Firstly, that many companies are already thinking about buyer centricity, even if they’re not yet using the term. Secondly, and more importantly, many of these companies, are moving on to implement solutions with buyer-centric aspects, either testing buyer-centric approaches in a conventional business, or building a business based on a buyer-centric business model.
The Prism Services report provides the most significant evidence that buyer-centricity is happening, at least in the UK. If you download the management summary, or purchase the full report, you will get far more detail of the survey findings, as well as Prism Services’ recommendations on how businesses should respond to the move to buyer centricity.
In this editorial I have tried to lay out some of the reasons why I believe that buyer centricity is a trend which should be of interest to all CRM professionals, and pointed you at some resources to help you come to grips with it. I hope you will re-visit this forum as we publish further documents and articles on buyer-centric issues. If you have material on buyer centricity, we’d be delighted to consider them for publication if you email them to Richard Forsyth. Alan Mitchell, author of the first detailed book on buyer centricity, Right Side Up (HarperCollins, 2001), and I, will be contributing regular editorials to this forum on these issues, and I am sure that in no time there will be a lively debate taking place in our discussion forums.
As always we’d like to hear your views on buyer centricity or comments on this editorial by clicking below on ‘Add a comment’ or email me at [email protected].