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intimacy? or business trust?

This comes from a conversation with Don McLagan of Compete. Compete is in the business of tracking (anonymized) consumer behavior on the Web, and thinking about how to move (with permission!) towards direct communication with identified customers. We started with the concept of “customer intimacy.” But who wants to be intimate with a vendor? or vice versa?

 

Yet, true story, last Sunday I earned 6000 status miles from United Airlines for faxing them three statements from my other frequent flyer programs (British Airways, American and Delta). I would have done that for free; I *want* United to know how much I travel with the other guys. Maybe they would treat me better if they knew.

 

As it happens, I have a long, close, data-filled - but not intimate! – relationship with American. Let me explore it to make a few points. I have earned more than 7 million miles from American over the years, and I have a lifetime AAdmirals’ Club membership. (I bought it in 1985, just before I was planning to sell my business for the first time, and expected that the new owners wouldn’t pay for such a thing. It cost about as much as a single year’s membership costs now. Not that I was that smart; I bought a similar lifetime membership with Eastern Airlines – but their life was short!)

 

American knows a lot about me… both travel patterns, and, over the years, a number of complaints and a few compliments that I sent in and which are probably on file somewhere. But what’s more interesting to me is that I know American. I know not just their prices and routes, but also their seat maps and upgrade policies. I can go to American’s site and check seat availabilities on the flights I’m considering. If there are two and one’s full and the other empty(ish), I’ll go for the empty one – better chance of an upgrade, or at least of an empty seat beside me.

 

Doesn’t this transparency hurt American’s ability to control its inventory? Not at all. They *want* me and people like me to fill up their empty flights and reduce bumping on the full ones. It’s in their interest for me to be happy, and for me to benefit from upgrades to seats that would otherwise have gone empty.

 

Rather than a mysterious enemy engaging in inscrutable countermeasures, we are partners, trying to get me the best seat possible given American’s rules. I don’t expect American to be altruistic or to give me more than I deserve, but I trust them – business trust! – to do what’s in their own best long-term interest, which is to keep me as a satisfied customer.

 

How concscious is American of all this? probably not very, or they would make it slightly easier! I would love a software package that would help me to navigate American’s site and grab the seat maps of the different flights I’m considering (and perhaps those of a few competitive airlines) into a single page. In fact, I’d be happy to have a software package that would represent *me* in my dealings with a variety of vendors.

 

That brings me to the business proposition of Sidestep or, as it happens, WhenU, a company that I just wrote about in the Release 1.0 issue on adware. Their original (and perhaps born-again) proposition is a shopping assistant (as in WhenU shop) that would do precisely this kind of thing.

 

This is all part of a slow, mostly unnoticed shift in the balance of power towards consumers. Once we got into mass production, we moved into an economy where producers made things (trying hard to divine and influence customer tastes, of course) and consumers could choose from what was on offer. Then we got feedback, 800 numbers and the like, and companies started to “listen” – some of them seriously, some only in their marketing pitches.

 

But it’s mostly still the vendors who have all the firepower. The user tools I mentioned above are beginning to redress the blance. And Priceline allows the user to set his own price, but its business model basically depends on price obfuscation – because the vendors don’t want to expose their below-market pricing to competitors or to less price-sensitive customers.

 

But there’s another, better example out there of what’s coming in – of all places – the on-demand air-taxi business. In this business – most notably Dayjet - consumers enter their requirements and constraints, which are matched with other customers’ data *and* with what Dayjet has on offer in terms of aircraft and personnel to fly and service them. It’s in everyone’s interest to use the resources most effectively and to make trade-offs based on customers’ preferences (and their willingness to back them with money). To course, Dayjet takes a cut, but there’s not the feeling of Dayjet benefiting at the customers’ expense that you so often feel with traditional business models.

 

Of course, that’s a slightly idealistic view of things, but it’s where we’re heading. The customers become – in realtime – partners in designing and allocating the offering.

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Taken on May 10, 2005