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The four waves of consumer empowerment

Posted on: Friday 11th of December 2009

To be honest we weren’t that surprised at the results of our recent research: for all the talk about consumer empowerment most consumers don’t feel that empowered … yet.

Does that mean ‘the trend towards increased consumer empowerment’ is all hype? I don’t think so. I think it means we need to dig deeper into what ‘consumer empowerment’ actually looks like, and how (and therefore) where it is unfolding.

The first level is choice. The classic arena of choice is between competing products and services. More recently however, consumers have also gained much greater choice over the sources of information they pay attention to. This has huge implications for organisations’ management of their customer ‘touchpoints’ because customer trust and attention is migrating rapidly towards those sources of information they find most helpful – which are not necessarily the same as the touchpoints that deliver organisations’ messages.

The second level is voice. The first wave of consumer voice has been rather anarchic – the rise of ‘bottom up’ flows of information in the form of individuals publicly expressing their views and feelings via social networking, chat and other line forums. The existence of consumer ‘voice’ is transforming the communication environment for organisations. As Asda CEO Andy Bond recently noted, “within seconds, customers can compare notes, demolish price structures, destroy marketing strategies and tell the world to shop elsewhere”

But these are early days yet. Because it’s so anarchic many of these early forms of voice are difficult to use or to trust. The next wave will be much more disciplined and structured – taking the rich material there is and sifting, grading and codifying it so that we pay attention only to the relevant, trustworthy, and useful bits of it. This is where the next big wave of Volunteered Personal Information (VPI) comes into its own.

A third level of empowerment is the ability to specify what I want, how, when. This is more about empowering processes rather than choice or voice. Finally, there’s a fourth level of empowerment that revolves around the ability to choose or specify ‘choice architectures’ – the ways in which our choices are constructed, framed and presented in the first place; the ‘rules of the game’ if you like.

How fast each of these waves sweeps over an industry or organisation depends on two things. First, how quickly new information management tools (the tools of voice and specification) are placed in the hands of individuals and how quickly they are taken up. Some, such as online search and price comparisons are already well-established. Others such as personal data stores and more sophisticated personal information management services are still to come.

The second factor is how organisations and industries respond: do they resist or embrace? Resistance isn’t necessarily futile. If an organisation refuses to upgrade its internal operations so that they are capable of responding to an individuals product, service or communication specification, there’s no point in doing the specification in the first place. Many such chicken-and-egg games are currently being played out.

But the crucial thing is this. The more individuals use personal information management tools and services they more they have to offer organisations they engage with – help in the form of the information organisations need to deliver the right value to the right people in the right ways at the right time. To cut costs and add value in other words.

That’s why. increasingly, organisations have a positive, compelling vested interest in adapting to – even encouraging – the ‘empowered consumer’. And why mapping these nuances in detail is becoming so important.