Powerful Customers
My aunty is 85 years old and recently she got a new digital TV with
a Sky Box. I was showing her how to use the remote control and I
said, “Look at this. Imagine you’re watching a TV programme and you
want to take a break or make a cup of coffee. All you do is press this
button and the programme stops.” And she looked at me, in all
seriousness, and said, “But what about everybody else?”
What that illustrates is the mindset of somebody who was brought up in
the last century, whose social habits involved going to the cinema
to watch, with everybody else, at the same time, the same films. And
even more recently we all watched TV at the same time. Whereas younger
consumers expect to be able to record a TV programme to watch later, or
to watch it on the internet. For shorthand, we might call these ‘old
consumers’ and ‘new consumers’.
In the age of Web 2.0, the interactive web, what we are witnessing is a
fundamental and irreversible shift in the balance of power in favour of
consumers. We no longer have passive consumers who are told what to
watch, when to watch it, how to watch it - but a new breed of much more
informed, demanding, tech-savvy and communicative consumers.
Consumers are no longer passive. They are creators too. Consumers are
also acting as marketers and even as financiers. Technology has enabled
this shift in power, but it’s consumers who are driving it and becoming
much more powerful. So we need to understand the new economics of the
age that we’re living in and this underlying shift in power – a shift
which makes things in some ways more difficult, and yet also brings new
opportunities for entrepreneurs.
Business models that deny or resist this shift in power are doomed to
failure. And that includes many established businesses that are stuck
in their ways, who will not or cannot change. They won’t change because
they’ve invested so much in the old way of doing business: their
assets, financial structures, their mindset, their skills, their staff
and their whole way of thinking is based on an outdated assumption that
customers are passive and can be treated as one mass.
At the same time, on a positive note, new business models that embrace
the fact that consumers are now ever more powerful will succeed. As a
business adviser in the creative sector I am helping creative
entrepreneurs in the UK and world-wide to develop innovative ways to
create profitable business models based on the new opportunities to
engage with powerful customers.
The most successful creative businesses in the future will be those which follow this approach.
This is an edited extract from a longer article based on a speech by
David Parrish to a conference of TV producers in Finland. To watch the
video of this speech online, visit: www.t-shirtsandsuits.tv
This article was first published by 08BusinessConnect
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