Do you ever think about the future balance of power in the world of consumer relationships? As a marketer it is definitely worth evaluating in order to spot the fast-growing trend of offering customer-orientated solutions.
In a few years, who is going to hold the trust relationship of the consumer? Who are the gatekeepers of the future? To make sure VWV is going to keep up, we’re all over this kind of questioning.
Two key trends
I see two key trends that will drive the world’s marketers to these answers.
The first is the ever-growing insistence of everyday people to be treated as individuals and not as one of the ‘mass market’. More and more consumers are demanding customised products and services and that will soon become the only accepted norm. Companies that provide this “mass customisation” are the ones that are growing their share of the market within their particular sectors.
Which brings me to my second point, the increasing number of companies that are recognising this consumer trend and their ensuing drive to develop mass customisation methodologies as a solution.
Instead of mass customisation empowering consumers to make a choice between many competing products or services, the abundant selection has in fact made them less confident about making the best choice. This is my hypothesis but consider the economic definition of ‘opportunity cost’.
An ‘opportunity cost’ is the perceived value of the best choice forgone by making an alternative choice. That is to say, if you have R10 and spend it on apples instead of oranges, your opportunity cost in that circumstance is R10 worth of oranges. The result of today’s abundant choices is giving the consumers the ‘opportunity cost’ of any particular product or service and this choice is constantly growing. Now, instead of giving up R10 worth of oranges to buy apples, you are giving up pears, bananas, watermelon, pineapples, grapes and a whole lot more.
Based on this premise, and as needs become more complex, mass customisation will grow exponentially with alternative choices – this in turn creates a situation where consumer’s ‘opportunity costs’ increase.
So, how are consumers coping in this age of abundance? They make the best choice where and how they can afford it. They also seek assistance to make these choices from professionals or other consumers that can provide purchasing guidance. This is prevalent in complex industries such as financial services and medical insurance. These are product categories that most people know little about, and in the drive to make informed decisions they seek guidance.
This trend will soon spread to industries such as travel, schooling and entertainment. The abundance of choice will further complicate even the most basic products and services and it’s only a matter of time before people will seek professional assistance to make these decisions too.
This trend will birth a new industry of “navigators” or organisations whose sole purpose is to simplify the lives of consumers. More on this in my next post.