Businesses are optimized for a world that no longer exists: What worked before no longer does. There is a new market reality and the consequences of ignoring it are severe. We see this in the velocity of organizational "topple rates" -- the rates at which companies "fall from the top" of their competitive position. We see this in the accelerating revolving doors of senior management. (Howard Schultz and Michael Dell ousting their replacements as CEO at, respectively, Starbucks and Dell are simply the most recent poster children for this reality.) This all reflects a fundamental challenge every business faces: how to know your customer.
The answer rests upon this new reality: There is wisdom in the collaborative consciousness of markets. The opportunity lies in understanding that wisdom quickly and on an ongoing basis. Doing so involves converting first-person customer feedback into first-person intelligence. This means understanding the flow of critical information inside and outside of organizations -- such as emails, blogs, reviews, chat data, and customer service notes -- which is growing every day at exponential rates on the Internet and inside your company data stores. Doing this yields:
- revelations of market shifts and changes in customer expectations, desires, and intentions;
- responses of what to do about them; and
- measurable results to monitor adaptive efforts and to crush competitors.
Before you made educated guesses as to the content of that feedback; now you can know. All the hype and hope over Web 2.0 reflects the powerful stirrings and technology underpinnings of Market 2.0 -- a fundamental shift toward collaborative commerce and decision-making. This will yield a restructurings of:
- how business is conducted;
- how competition is identified, understood, and beat; and
- how opportunities emerge.
Market 2.0 is the new game, energized by the collaborative affordances of Web 2.0, a true democratization of consumer decision-making. This ushers in a new basis for building and maintaining competitive advantage: The winning organizations will be those which learn quickly how to gather, interpret, and act on day-to-day changes in market sentiment, opinion, and preferences.
How much user-generated content is there? According to the Pew Internet and Life Project, "53 million American adults or 44 percent of adult Internet users have used the Internet to publish their thoughts and respond to others" about products, share opinions, and give advice. And these statistics are similar in many countries around the world.
Evolution informs us that adaptation involves "fitting into" new competitive environments. The "fitness" algorithm is simple: Adapt or die. It's no different for businesses. In these new, often unknown, and essentially unstructured new worlds, how do you
- get your revelations (of what your customers really want and intend to do);
- develop your responses (of what to do about those revelations); and
- measure your results?
The key to corporate adaptation lies hidden in blogs and email, online forums and service notes, community sites and social networks -- ignored, unknown, unused. Think about this. Ignoring this information means that organizations are making competitive life-and-death decisions without the input from the 70 percent of their customers who actually express precisely what they want. Is that a successful strategy, especially in the face of the new challenges of globalization?
Central to Market 2.0 is collaborative consciousness. "Consumers are highly influenced by the experience of other consumers -- far more than they are by marketing professionals," says John Lazarchic, Petco vice president of e-commerce (Internet Retailer, 2/1/2008). A profound implication ensues: Every interaction with one person has seismic impacts on many others. This Collaborative Consciousness updates the dictum, "it takes a village" to the powerful, "I bring the village."
Enter first-person intelligence. First-person intelligence extracts revelations from the Collaborative Consciousness and captures "signals" of intent, of value, of context. These signals comprise leading indicators of market and consumption shifts -- but you must tune in. Today there are new mechanisms for "hearing, analyzing, and acting on" your customer's expectations, desires, and intentions, of what constitutes value to them, and of their contexts to realize that value. Imagine having insight into expectations and signals of where customer intentions -- and markets -- are heading. Wouldn't that be crucial?
Web 2.0 provides the infrastructure to build the collaborative contexts where customers say what they think, feel, and want. But Market 2.0 fundamentally reflects the collaborative creation of market segments around those customer preferences. First-person intelligence pulls all these voices together to deliver the crucial "signals" of those preferences, their contexts and, as a result, signs of emerging opportunities to enable action.
The trickle of 2007 around these new platforms and models is becoming the Niagara Falls of 2008. Perhaps you could afford to have missed it in 2007. But now you have to act on the new Market 2.0 playing field before your competitors do.
It's a new day. Turn the truth and intelligence hidden in customer feedback into market power.
About the author
Ralph Welborn, Ph.D., is author of numerous articles and two books: The Jericho Principle (on emerging collaborative business models to create innovation) and Get It Done (on aligning the gap between strategic intent and operational reality to drive effective execution). Welborn is a senior business and technology executive who has built and led global business management teams at KPMG Consulting, BearingPoint, Unisys, and Charles Schwab. Welborn has a Ph.D. in the philosophy of science & technology from Boston University, and a BA and MA in public policy and development economics.
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