The industrial economy was based on ‘make and sell.’ Take, for instance, the massive production of Henry Ford’s cars and his dictum, ‘you can have any colour you like as long as you like black.’ But, back in Henry Ford’s time there was little regard for the customer. The focus was on the production process.
Then, starting in the late 1950s, came the information economy which is based on a ‘listen and serve’ dictum. Nearly 80% of the world’s employees are now in the service industries. Microsoft is the equivalent of the Ford motor company. The focus now is on quality and customer satisfaction, ‘the customer is always right.’ Market research, segmentation models and distribution channels all contribute to making the customer ‘king’. In spite of this, customers are generally ‘faceless’ because they’re lumped together in demographic segments. And, the systems in place to meet their needs are, on the whole, inflexible.
But now a new approach is emerging. The emotion economy recognises that companies will have to take providing service and information a step further if they want to attract clients, and staff, away from their competitors. Go to a banking court and assess the points of difference between banks. Not much, is there? If you’re buying cars, cosmetics or hair care products, except for the very sophisticated and expensive, or the really cheap products, there’s not much in it today price or product-wise. Take supermarkets – you’ll find some are a little more up market than others but on the whole you could shop at just about any of them with much the same quality and service. Furthermore, people are increasingly shopping on the Internet: they will call up a trolley of products from one store and compare it with a trolley from another and then make their decision to buy. The same applies to a travel agent, or indeed, any other kind of booking agent. You’ll shop around for information on the Internet and then choose your agent, or, bypass them completely and make your own purchase.
Now comes the crunch. Which agent, supermarket, cosmetics and car will you choose? Increasingly, your decision will be based on relationship, connection, trust and emotion, and not on price, quality or speed of service.
You’ll buy a car from, and get it serviced at, the garage that makes you feel special and looks after your particular needs, and you’ll go to the bookstore with the coffee shop, where smiling staff go and find that book for you. Indeed, they may provide Internet access so you can search Amazon’s ‘inside the book’ search facility. The travel agent that delivers your tickets, knows your hotel preferences and rings you when there’s a special on that she knows you’ll enjoy, will not surprisingly be your first port of call. The restaurant maitre d’hotel who welcomes you by name and treats his staff well so that they are pleasant and happy around you, will attract customers. The estate agent who paints your house for you, at her cost because she knows it will fetch a higher price for you both, or fills it with flowers on show day, will grab your attention and custom.
So, companies that will attract attention and custom are those that:
- are trustworthy and honest
- make their clients feel special
- provide service tailored to client preference
- understand ‘mass customisation’ and ‘markets of one’
- network with their clients, spreading their good name by word of mouth
- take seriously issues of the environment, corporate social responsibility and sustainability.
- treat their staff like human beings and not just biological machines.
Other names for the Emotion Economy include: Intimate Economy, Relationship Economy, Wisdom Economy, Transparent Economy and Connection Economy.