Fundamentally, our task as marketers relates to understanding our products well. However, this task is becoming increasingly more complex. Traditionally, products were clearly distinguishable from each other and they took the form of services, objects, ideas or information. The seller was in control of most of the value-creation process, particularly at defining the WHAT of the product - it’s shape, form and means of communication. But as we enter into an era in which consumers, social media, AI and third-party partners play an interrelated role in the value-creation chain, the visibility and control that vendors once enjoyed becomes dissipated.

What happens when the traditional product is in part designed by the consumer and becomes a part of a much bigger offering – a bundle between tangibles, intangibles, experiences and services that are delivered on an ongoing basis?  What happens when the customer-business engagement, content, and communication is produced ad hoc and handled by a computer?

The New Economy

Let’s go back in time. In the past, economic progress (the shift from an agrarian economy, to an industrial economy, and on to our current service-dominated economy) has been driven by transformations in the value proposition of commercial offerings. Today we are in the midst of yet another fundamental transformation. In the industrial economy, lower-valued commodities such as raw materials were transformed into higher-valued finished goods. Over decades, the service sector became the most important driver of economic activity and value added.

To shed light on this transformation, think of how telecommunication companies leveraged the opportunity to sell increasingly commoditized mobile phones as part of a service package. The mobile phone was practically given away for free in order to sell the higher-valued communication service. Goods were transformed into services, or into goods-and-service packages. As conventional thought predicted, mobile phones and services have been facing increasingly higher price competition, continuing the natural progression into commoditization. What we’re seeing now is that the lower-value phones and wireless services are being bundled into something more comprehensive – the higher-valued offering of the New Economy.

Let’s think about Apple, for example. Their mobile phones are now part of a bundle formed by increasingly personalized customer engagements and experiences across space and time. Phones, music, apps, payment services, the cloud, watches, assistance from Siri and advice from AI-driven software all blend into an overall, well-orchestrated and higher-valued offering. The continuum of tangible, intangible and meaningful impressions and sensations are delivered across a network of consumer touch points that Apple controls and continues to expand.

Parallel to Apple, brands such as Google, Amazon, Microsoft, and Nike are also building similar customer supporting ecosystems. They are conceived and structured to guide, teach and/or support consumers on day-to-day practical matters. Some ecosystems appeal to customers in ways that further develop their interests for either advancement (education), independence (finance), confidence (beauty) or achievement (sports).

Nike, for example, uses wearable technology to guide, facilitate and enable consumers to fulfill athletic goals. The Nike+ Coach program was designed to be a virtual personal coach. It allows customers to program challenges and goals, such as training for endurance, while tracking their progress online via graphs. Nike+ Coach allows users to compare their performance results and observe trends over time. As they progress they receive tips and advice to maximize their training results. Notice that the customer-business relationship is symbiotic in that both benefit from the day-to-day interactions. The company learns about customers’ preferences, wants and needs, while the consumer gains from personalized value-added attention.

This ecosystem is intended to build dependability and maintains an intense focus on consumers at an individual level. In the New Economy, the customer becomes an integral player in the economic offering.  S/he is now part of the product, and everything else is put in place to add value in the process. Sensors, apps, running shoes and shirts all support and are part of the value creation.

The transformation of the music industry is similar to the Apple example. We can envision a future in which customers are less interested in paying for the ownership of songs and other tangible goods, and instead prefer “leasing” phones and benefit from frequent upgrades and the latest innovations. They are more open to renting space for cloud computing and signing up for subscription-based programs with monthly fees that serve the purpose of assisting or entertaining throughout space and time. The higher-value offering relates to the aggregate value customers perceive while experiencing the company’s ecosystem.

In light of modern marketing thinking, the goal of maximizing customer-life value by cultivating long-term relationships remains the same. As we discussed in a previous chapter, smaller businesses increasingly adopt marketing technology and/or integrate second or third-party AI driven tools to create their own omni-channels. They will also optimize the user experience and implement data science to learn as much as possible about customer preferences, interests, and lifestyles to predict needs/wants and curate personalized engagements accordingly. Businesses will focus more on expanding their first-party data platforms and take even greater control of their own promotional and advertisement activities through direct-to-consumer engagements such as email marketing, messaging and websites. The business-customer relationship is viewed as part of an ecosystem formed by the symbiotic interactions between customers, the company and partners.

A Change in Perspective

In this New Economy, the perspectives used in marketing management will vary. While the fundamentals remain the same, the table below illustrates how the approach and focus in strategic marketing planning have to be envisioned differently.

The View from Consumers

From a consumer perspective, the higher-valued proposition relates to the combined benefits resulting from many factors: the tangible and intangible, the functional and emotional, and the purposeful and unintended impressions and sensations experienced throughout long-term engagements. Consumers experience unexpected delightful surprises resulting from companies foreseeing the customers’ needs, wants, preferences and interests. Personalized offerings and the relevancy of interactions contribute to the customer’s overall sense of belonging and meaning.

The New Economy is all about connectivity and will be an amalgam of interdependent goods, services, experiences and personalized assistance aimed at higher purposes, for both the consumers and communities.