It’s No Game: If You Want to Keep Up With Your Customer, You Have to Adapt to New Business Logic

I heard this the other day, and though I can’t remember who said it, it has stuck with me because of its truth: “Customers leave value in their wake.”

The time-weary business concept that the company, through its products and services, produces value, has finally incontrovertibly been replaced by the view of the customer as the core of value. Argue with me if you care to, but there are too many customers, pundits, gurus and companies out there who, either consciously or subliminally, know that.

The world is now run by a customer ecosystem dominated by a personal value chain for each individual. And that, in turn, means that the value chain is not based on just one business and its extended partner and supplier network. It may take many enterprises and many extended value chains in orbit around the value chain of each customer. Why? Because the true business differentiator is the experience the customer has in his or her engagement with that business.

Consider the fact that Disney Destinations, the travel arm of Disney Corp. (which has always been ahead of its time when it comes to customer experiences), recently changed the name of its CRM program to CMR (for Customer Managed Relationships). The company recognized that customers wanted experiences and relationships organized around what they, as customers, saw as meaningful. Just because 200 families wanted to go to Aruba didn’t mean that all 200 wanted to do the same things in Aruba. The change from CRM to CMR is “just a slight nuance regarding our philosophy that our guests invite us into their lives and ultimately manage our presence/relationship with them,” a Disney executive told blogger Seth Godin in May 2006 (http://sethgodin.typepad.com/seths_blog/2006/05/crm_is_dead.html).

Sea change
That is a lot more than just a “slight nuance.” It reflects a major shift in the perception of value and where it resides. A personalized individual experience is, in fact, the business differentiator that products and services used to be but are no longer.

Today’s business logic hasn’t evolved since Henry Ford declared that everyone can have a car “as long as it’s black.” It is price-dominant. It is an outlook that says “we will push products and services—according to customer demand—but we still control the value proposition.” That broken logic doesn’t work with customers, anymore. The playing fields are far too level when it comes to availability of similar products and services and identical access and delivery mechanisms.

But before you can adapt to the new business logic, your company has to acknowledge two truths: that the old business logic is broken and that the new customer already exists, with non-negotiable requirements. The new customer is not a “future state.”

Once you’ve admitted that, you are ready to look at the prototypes out there for the new business logic. Some of the characteristics:

• The producers create a corporate culture that is defined by the voice of the customer first.
• The model uses the most advanced and, yet, common technological tools available.
• The company and the customer each get value in ways that are appropriate and satisfying to them.
• The customer’s experience with the company creates advocates, who recruit others to purchase the products and then to collaborate on building the personal experiences.
• The lines between producer and consumer are blurred with the conjoint creation of value and the producer both a publisher and aggregator.
• The users and the producers encourage each other and mutually define the future directions of the specific products.
• The users have the tools to configure and/or customize their personal experience with the product.
• Marketing methods are not necessarily conventional but are, in fact, based on social networks.
• Transparency and trust between the company and the customer are part of the value proposition.

But, you ask, who in hell is going to build a business model based on that? The video game industry, for one. With a great deal of success, I might add. PricewaterhouseCoopers puts the industry’s 2005 revenue at $25.9 billion and projects it to more than double, to $54 billion in 2009 (Global Entertainment and Media Outlook: 2005-2009).

Mods
The gaming industry provides gamers with the source code and the tools to modify the games. In this way, the gamers, themselves, can personalize the experience. This “mod” community—for “modification”—is made up of people who have always treated the games as theirs, playing them and adapting them in such a way that they ultimately transform the original game into something entirely different.

Conferences such as BlizzardCon engage the gamer-customers and encourage them to participate in planning the company’s actual next direction. The company provides user tools for the gamers and even documents best practices for modifying the games, making them available online.

It’s a complete customer win—and a company win. Customers get to customize games to their individual specifications. They are engaged with a community of other “modders.” That the community is supported by the company adds to the modders’ experience and enhances their relationship with the company. Customers find meaningful value in the sense of community and accomplishment, and the company creates advocates who go out and sell more games.

Collaborate with your customer to produce meaningful value for each of you, and you will see an exponential rate of success for you and your consumer-partner. Don’t believe me? Please close the door on your way out of the 21st century.