A businessperson focusing on customers can be forgiven for thinking that “experiences” are what matter most. And for good reason. People clearly want to engage with products, services, events, etc., that cause a shift in their state of mind that they find pleasing. And that shift is an experience. That said, delivering discrete experiences, in and of themselves, doesn’t lead to long-term competitive advantage. Companies increasingly realize that the experiences need to be organized in a sequence that leads to a valued (dare I say “meaningful”) relationship between companies and customers.
But what is a “relationship?” We understand it very well in the context of friendship, relatives, and romance. But when you apply the concept to the connections between people and companies, it can feel odd or inappropriate in some way. This in spite of the fact that companies like to talk about customer “loyalty” or deploy “customer relationship management” software to develop the interactions between themselves and customers.
Fundamentally, people don’t much care for others who seek “loyalty” from them, but don’t offer it in return. And they don’t much like to be “managed” either. And why would they? Do you primarily seek “loyalty” from friends, as opposed to warmth? Do you crave being “managed” by your children, as opposed to appreciated? What people DO like is to have an ongoing, deepening interaction that’s consistently experientially satisfying.
Rather than focusing on managing people or looking for loyalty, it’s more useful, if we’re developing an innovation strategy, to recognize the primary types of relationship that evolves between customers and companies. They should, ultimately, be based on how we interact to create valued experiences, rather than how we get customers to spend money with us as an end in itself.
There’s four of these types of relationships we’ve identified:
- Top-down. In this model, the company calls the tune. It develops what it thinks best, offers it to the customer, and then the customer decides if they want it or not. Many times people love this model. For instance, if you go to a movie, you want the director to serve up a sequence of experiences over two hours. You don’t want to be asked which type of experience you’d like at any particular moment. Being taken in hand is what you’re after.
- Co-Created. Here, you get together with a company and the two of you develop an offering that the customer would like, within a range of options largely determined by the company. Build-A-Bear Workshop is a great example here. Lots of digital companies operate from the assumption that customers want to co-create their experiences. The jury’s out, however.
- Improvisational. In some cases, there are no real limitations on what you and the company can do together. You both just have to agree, as you go along, that you’re both willing to continue. A bespoke tailor can work this way with you if he or she so chooses.
- Down-up. And finally, there are cases in which the customer totally calls the tune, and “the company” jumps. Certain types of service firms play this way, such as consulting firms– within reason, of course.
Applying these relationship models can be tremendously helpful to the innovation strategy development process.