Required Reading: Making Common Cause with Customers
It's no secret that in today's digital and increasingly democratized economy, new outfits like Uber or Airbnb can enter the scene and reshape entire industries, seemingly out of nowhere. But that doesn't mean that more traditional businesses can't stay relevant, argues Billee Howard in her new book, We-Commerce: How to Create, Collaborate, and Succeed in the Sharing Economy. Remaining so requires businesses to, among other things, embrace change and find the "courage to force yourself into an uncomfortable space, especially when things are going along smoothly," she writes. Associate Editor Oren Smilansky caught up with Howard to learn more, including the benefits of enlisting your customers.
CRM: How does the "we-conomy" you discuss in the book differ from the "sharing economy"?
Billee Howard: The term "sharing economy" implies some form of altruism. In reality, it's really this idea of everybody benefiting from something. Companies like Uber or Postmates require support from the community—from the business itself and people who want to freelance and have flexibility in what's called the "gig economy." And consumers want to benefit from services that allow accessibility to things that would never have been imagined before.
I believe that we're going to move from calling it the sharing economy to the we-conomy because it's less about altruism and sharing only, and more about the idea of everybody benefiting and everybody coming together.
CRM: You recommend that companies should be more cooperative with customers. Why is that so important right now?
Howard: The masses never really had that much power before because they didn't have a voice, but now everyone has a voice, so it is a necessity for businesses to put consumers at the heart of everything that they do.
Markets have developed. Products are being commoditized across the board, regardless of the industry. If you're going to spend $30,000 on a car, there probably won't be much of a difference between options in that range. The secret sauce, or X factor, is often the quality of experience a brand creates. Putting the consumer at the heart of everything is a way of creating competitive advantage. Whether it's driving experience through interactive marketing and creative content, or even going so far as to invite consumers to innovate with the brand, these are techniques that are being used by smart companies to engage current audiences and attract new ones.
CRM: Can you give some examples of brands that are inviting customers to collaborate with them?
Howard: Lays' "Do Us a Flavor" campaign is a great example of collaboration. Lays invited consumers around the world to invent the next flavor of potato chips. It got worldwide attention, and it's amazing that new flavors that consumers imagined are now on the shelves, customized according to the tastes of people in different geographies.
Porsche is another example. Porsche decided they wanted to get into the SUV market, but [industry research] told them that nobody in their right mind would want a Porsche SUV. The company [responded by surveying] consumers and brand loyalists. When they asked those people, the answer was a resounding yes. Porsche trusted its consumers and went against what industry research said. The Cayenne is not only one of the most successful SUVs on the market, it's also one of the most successful vehicle launches in the history of Porsche.
CRM: What can established companies do to stay competitive as the we-conomy ramps up?
Howard: Companies need to understand that it isn't a just a fad. It's an economic ecosystem that is only going to get bigger. When traditional companies don't embrace change and disruption, as we know, they don't win—they die.
We've never had a period when the canvass has been so blank. There are so many different facets of society that we want to apply the Uber business model to.
If companies want to succeed, they should look for pockets of opportunity and really try to reimagine (or imagine) things that have never been achieved before from a service standpoint.
CRM: Are there any companies that are doing this well?
Howard: Companies in the hotel industry are doing it right. Instead of sitting back and saying, "Oh, what do we do [to compete with Airbnb]," Hyatt invested $40 million in a start-up called Onefinestay to compete directly with Airbnb, and is offering through the same business model an experience that is extremely competitive and has a point of differentiation that is bit higher end. Wyndham did something similar, and invested $12.5 million in a company called LoveHomeStay.
The Rise of the Sharing Economy
Although the term itself might be vague, the fundamental principles of the disruptive business model are here to stay