May 10, 2012

Customer Capitalism

In April 2012 Andrea Tomasini had a Keynote at the Lifecycle Conference in Munich. He started his presentation with some information about Customer...

In April 2012 Andrea Tomasini had a Keynote at the Lifecycle Conference in Munich. He started his presentation with some information about Customer Capitalism and what are the changes in the business world over the past years?


A large number of economists, sociologists and even historians are dealing with this
question. And certainly they have the proper qualification to analyze the various farreaching dimensions of the changes. Our point of view is far more pragmatic. We describe the changes from the perspectives of Managers and Entrepreneurs, trying to give a holistic picture of the “What” and “Why”.
Let’s dig deeper into the topic and find answers to the following questions: 

  • Why are established companies currently struggling so much to keep up their position in the market?
  • Which change of old ways and rules makes it difficult for companies to persist?
  • Is there a recipe for staying competitive?

At the beginning of the 20th century new products and services were introduced at a very low rate with rather controlled and simple marketing methods and messages via print, radio and later on television. Only a few decades later there were hundreds of private channels advertising new and changing products at any time. This resulted in a larger distribution of products and raised the demand for new products, causing many companies to enter new markets, both for production and the fast generation of new ideas and products. The main objective at that time was “merely” raising the cashflow and profit in a fast growing business environment. The only thing necessary for selling more was producing more.

Quality was a minor issue, or putting it more precisely, unsatisfied customers didn’t have a platform for their complaints and could not ask for improvements in quality. In order to stay competitive it was more important to provide product novelties instead of establishing longterm customer relationships based on a certain product or production line.

  • Products were controlling the market.

Today we are facing a completely new situation. The speed with which society and economy develops has constantly grown within the last few decades and brought us to the point, where previous markets and organizational structures, which worked well in the past, are put under new pressures. What is the reason for this?
It’s simple. Thanks to the internet, Google and social networks, communication has become more independent. Customers can get free and vendor-independent information. Reviews from other customers, competitive comparisons, quick and easy feedback to vendors and the power to publish negative product reviews, have changed the role of the customer. A facebook analysis showed that 73% of facebook users trust their friends’ recommendations without trying the product themselves (http://www.getelastic.com/facebook-like/). All the changes show:

  • Today customers are controlling the market.

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Marion Eickmann

I am one of the founders of agile42. Even though I am not an engineer I consider myself almost a "Techi" as I have been working in the field of software development for 10 years now.
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Marion Eickmann

I am one of the founders of agile42. Even though I am not an engineer I consider myself almost a "Techi" as I have been working in the field of software development for 10 years now.

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