Forget about „Jobs to be done“ (JTBD) – the future is about „Decisions to be made“ (DTBM)
Most certainly you are familiar with the „Jobs to be done“ (JTBD) Framework? Ever heard the quote “People don’t want a quarter-inch drill. They want a quarter-inch hole.”? This quote, which was made popular by Theodore Levitt, forms the foundation for the Jobs-to-be-Done Theory: the notion that people only buy products (like drills) to get a “job” done (e.g., create a quarter-inch hole). The Jobs-to-be-done framework allows to mind shift from optimizing the same product again and again towards identifying innovative ways off the beaten path to serve a given need (job).
I believe that this framework needs to be rethought or at least extended to fit the future of digitalization. Of course, people will still have Jobs-to-be-done and might hire your company to do the job for them. But the future is about something much deeper and mightier than doing jobs for you – it is about making decisions for you.
We already get a glimpse of that near future when we think about robo investor services making trading decisions for you, ebay agents making decisions on when to participate how in auctions for you or hr-agents pre-analysing the company fit of applicants.
These AI based solutions do not only do the job for you, they make a lot of – sometimes quite important – decisions for you. They deliver convenience on a much deeper level – as long as you can trust them.
Did you ever not fall asleep, because you were busy thinking about how to get that quarter-inch hole Theodore Levitt was talking about into your wall? Probably not. Companies addressing Jobs-to-be-done make our lifes easier – for sure. Companies taking over the decision making for you deliver convenience on a much deeper level – if you can trust them. Did you ever not fall asleep, because you were thinking about the right strategy for your retirement planning? Maybe… What keeps us up at night are Decisions-to-be-made not Jobs-to-be-done. And AI based services promise to make those decisions for you – more competent than you and in your best interest.
In some years time we might „hire“ autonomously driving cars to do the job of bringing us from A to B. But while doing so, the car will make an endless list of small and profound decisions for you. From which route to take and at which shop to pass by to how to react when irregularities occur.
The tricky thing is: these systems are way too complex for us to rationally assess their capability and motivation. The decision-making happens in a virtual, code based, non-linear and often undocumented interconnection of systems, products and partners. No way you can fully assess if these systems are for certain capable and on your side. You have to trust that they are. And if you don’t trust them you won’t hesitate to leave.
Trustworthiness is the Achilles heel of the next wave of digitalization. We need to design and manage trustworthiness as thoroughly as we design products and services. We need to design systems centered around trustworthiness. We need to generate a solid understanding of trust themes relevant to our customers, employees and partners and how we could address them through out our company, throughout all parts of our business model. We need to measure and optimize our trustworthiness – and cultivate trustworthiness in our organisations’ governance and culture.
A Decisions-to-be-made (DTBM) framework would be a great first step towards this kind of trust centered Design approach.
If you are interested in the development of a DTBM framework – contact me 🙂
„You can end our collaboration any time with a days notice!“
A brilliant offer my colleague Willi Schneider – an Interim Manager – always mentions in his first meeting with potential new clients. Usually consultants are eager to work based on long-term retainers – so why does he offer this option – obviously to his disadvantage? He creates trust in the early phase of the customer relationship:
He proved that he is convinced in the quality of his work and therefore they can be convinced as well (you could cancel but you won’t!)
He offers a „trust retainer“ towards his clients – which makes the client’s trust in him grow (you could book me out for the next year just in case and then cancel after some days – but I trust that you handle our relationship with care)
He eliminates so called „trust friction“ in their decision making (can we really trust in his competence and intention? – well we can cancel anytime if he promised too much!)
One of the key drivers to be seen as trustworthy is communicated self-limitation – obviously to ones disadvantage.
It’s like the gesture of two open hands held up. It makes you pretty vulnerable and limits your ability to defend yourself IF the other person would have the intention to harm you. It communicates „you can trust me“ (because I trust you). Same with offering your hand for a handshake. You show that you trust the other person – and at the same time increase your trustworthiness. You offer kind of a trust retainer which triggers feelings of trust at the counterpart – a fascinating interrelationship of trust.
The „eternal trial phase“ pattern is using this phenomenon. Especially in the initial phase of relationships, when both partners try to figure out, if they should collaborate, we usually demand commitment before access.
In commerce, we invest trust (with a payment, our data, our efforts, our time etc.) based on promises made (Marketing). We need to trust, that what we experience after we commit ourselves is what was promised. This creates an uneven trust balance – we have to invest trust without the other party doing the same. This seems to work mainly due to a general trust into legislation and laws which make us assume that we don’t get tricked.
The trust pattern „eternal trial phase“ redesigns this uneven trust balance towards a system in which the buyer’s commitment can easily be withdrawn anytime in the relationship – to the disadvantage of the selling partner.
Freenet’s revolutionary FUNK App is based on the „eternal trial phase“ trust pattern.
In comparison to the standard 24 month contracts customers are used to sign, the FUNK APP idea appears to be a rather vulnerable business model . But from a Marketing perspective, the FUNK APP seems genius to me! Freenet understood, that the standard 24 month contracts are often seen as an unfair trick telcos use to rip off their clients. Offering the „eternal trial phase“ – customers’ trust friction is reduced to a minimum – allowing a smooth purchase decision.
The FUNK APP’s main objective is to communicate trustworthiness. The message is clear: there is no need to trust Freenet beforehand. „As we are absolutely convinced of the value we offer, we can make the verification and (if needed) cancelation of our offering extremely easy – „no strings attached“.
The „eternal trial phase“ pattern …
reduces initial trust friction
eases decision making
triggers a trustful relationship right from the beginning
and customers appreciate it. They pay slightly more (The FUNK APP offer sums up to about 30,- € a month for the premium package) as long as they want to be commited.
I am convinced that this new way of selling telco contracts will result in an extreme increases of new customer acquisition and – although made as easy as possible – will decrease the customer churn rate.
What about your offering? How could an „eternal trial phase“ offering look like in your industry? Get in touch and we will figure it out!
When we started offering discounts for special clients at the digital consultancy USEEDS° I founded in 2008, we used two discount alternatives. The first discount scheme seemed to be the industry standard. You define a discounted retainer with the client – a fixed minimum amount of days or EUROs they would have to order in the years to come. The alternative discount scheme was a discount percentage which increases, the more a client orders within a period of time – without any obligations to order anything. The first scheme was sometimes the basis for odd discussions with clients on how much they still need to order and what kind of additional forced projects we could come up with to reach the limit. The second scheme always produced positive surprise followed by discussions whether we should transfer the money back or use it for additional projects our clients always wanted to do but couldn’t finance – „hidden delight“.
Why don’t You get money back from Amazon, if you paid for 48 hours of access time, but only needed 3 hours to watch the film?
I know the question sounds absurd, but it helps to look at pricing mechanisms from a different perspective, the perspective of trust building.
The two most common ways to reduce pricing without loosing margin are limitations (less Gigabytes, limited time, reduced features etc. than the consumer might want in future) and bundles (more months, more of the same, more Gigabytes etc. than the consumer might want in future). Both are continuously mentioned as reasons to feel disappointed and tricked – reasons to lose trust. Why is that and how can the „hidden delight“ pattern change it?
With limitation and bundles, Marketers sell less than the consumer might want in future or more than the consumer might want in future. What they most often don’t sell is what the consumer actually might want in the future.
Limitation and bundles force customers to make a bet. And every time the bet turns out to be a bad bet, the customer will transfer the disappointment onto the relationship.
Have you ever signed a one year fitness centre membership (more than you might want in the future) and „saved“ months of fees? Have you ever learned later on, that you actually joined the fitness program only for some months but still the payments were due month per month? It occurs to me, that the fitness centre industry only exists, due to the one year (or sometimes even two year) contract model. They know that the usual member will become a „sleeping“ member within months. It allows to intensively overbook the fitness centre and sell not 12 months for the price of 10, but 3 months for the price of 10.
Members who notice that they where somehow tricked – at least not advised to their benefit by the fitness centre agent – will not prolong the membership (well they actually wanted to leave earlier anyway 😉 or come back later. They also will not recommend the fitness centre in the neighborhood and might try to trick back. The consequence of limitation or bundle pricings are often frustration and distrust. No one will thank you for a benefit signed years ago but many will complain about a loss once happening. So the initial advantage in selling becomes a nightmare for selling again.
My wife was an extreme Adobe enthusiast for the last 15 years. Back in the days we had long disputes on whether „Illustrator“ (her favorite drawing software from Adobe) or „Freehand“ (the competitor from Macromedia I preferred) was the better choice. She insisted on the Adobe software and partly this preference seemed to originate from her deep trust in Adobe. This trust was broken some months ago, when Adobe granted her a 3 month free try out for a pool of stock images. She accepted („well it’s for free let’s see maybe it’s useful“) but never actually used the service and didn’t know, that she needed to unsubscribe it weeks before the trial period ended to prevent it to become an expensive one year contract („Adobe wouldn’t do that to me“). From that moment on she was reminded monthly – when the next 50 € were booked out of her bank account for a service she never uses – that she can’t trust Adobe any longer. 15 years of buying Adobe software equals a 5 digit amount of sales volume. Seems that Adobe is not aware of the return on investment in trust.
ING the biggest Digital Bank in Germany chose a different route in their mortgage division. Additionally to an extremely competitive interest rate, they offer a further 0,1% reduction, if the customer opens a free of charge current account at ING and uses it as the main bank account. Let’s say the customer signs a mortgage of 250.000,- € for 10 years – that makes the 0,1% reduction worth more than 2.000,- € for using a for free current account. Bianca de Bruijn-van der Gaag, lead of the „home tribe“ and therefore responsible for mortgages at ING explains: „I know 0,1% is a lot. But the current account allows us to stay in a deep high frequent relationship with that customer for years. It gives us the opportunity to prove, that we are the right bank for further banking related business. It pays off in the long run“
We are used, that Telcos force us to sign a 24 months „membership“, gas and electricity providers have special offers with a min. of 12 months „membership“, car leasing contracts often can’t be cancelled within the first 36 months, if you want to pay back your mortgage earlier than planned, you have to pay an „early payback fee“ to the bank and once you buy the yearly public transport subscription (12 months for the price of 10) it will be extremely hard to cancel it, let’s say because you move to another city. Bundles ensure that customers are forced to stay longterm – well at least for those 12 or 24 or 36 months.
Companies which care about trustful longterm relationships act differently. „hidden delight“ is one of their secret weapons. Take Transport for London. When they introduced the oyster card in 2003, they offered the opposite of the examples above. With Oystercard you pay the regular price of a standard ticket per travel but if you use it to an extend, that a day pass or week pass would have made more sense, they retrospectively switch you to the special day or week rate offer. „Travel as much as you like in one day and we’ll cap your fare so you don’t pay more“. Transport for London sells what the consumer might want in the future. Transport for London solves the cognitive inconvenience to predict one’s travel behavior – an uncertain bet – and offers a „hidden delight“ model. At the end of the day (or week – depending on the card) Oystercard users get a refund, if a cheaper ticket would have made more sense. A frequent positive surprise.
Definition Trust pattern #003 Hidden delight The „hidden delight“ pattern describes behaviours in a relationship, in which one party changes conditions like pricing or service intensity retrospectively to the benefit of the other party.
„Hidden delights“ allow the continuous communication of good news along the way. And they help to sell. The Oyster card „cap your Fare“ offer was initially installed to make the Oyster Card attractive to customers. Longterm attraction in contrast to potential longterm frustration of bundles and limitations.
Now apply the „hidden delight“ pattern on your business. What would happen if a bank doesn’t offer a special trading offer for the first 6 months, but reduces the trading fees depending on the length and intensity of the customer relationship. Wouldn’t this create positive longterm bonding? Wouldn’t it foster a trustful relationship? (And yes, if you do the math banks would make a good margin). Or Vodafone? What would happen with your trust towards Vodafone, if you don’t have to decide between plans because you know you always retrospectively get the plan which best suits your consumption? would it make you relaxed about telco plans? Would it make you stay longer with Vodafone?
A friend of mine just recently experienced the Amazon example. She wanted to watch a film and bought a 48 hour rent at Amazon. Within the 48 hours she didn’t watch the whole film. So she would have needed to buy another 48h rent to watch the rest of the film. Does that feel fair? Well she contacted Amazon via chat and told her story. And „one minute later I could watch the rest of the film without double payment – it was a very positive surprise“. A customer care agent repaired the trust. The „hidden delight“ pattern creates trust systematically.
Trustpattern #001 „Put it on my tab“
Trustpattern #002 „adversely trigger“
Two days ago, Katharine Viner, the Editor-in-chief of the Guardian send me an email. She thanked me for supporting the Guardian and told me, that the next annual payment date is 15/03/2019 (a month ahead) when €49.00 will be charged to my credit / debit card. She actually reminded me, that now would be the time to cancel my subscription.
Some weeks ago I received a similar mail from dropbox, telling me, that now would be the time to cancel my membership, as in 4 weeks time the next yearly membership fee would be due.
What is going on here? Are they all going nuts? Did some agents from the competition take over the marketing department? Who should earn the money they throw out the window? „Do you really want to renew your subscription ?
Well actually I didn’t unsubscribe dropbox nor the guardian. The emails fostered my feeling to be at the right place, to have chosen the right partner.
The “Adversely trigger” pattern makes you feel in interaction with an extremely integer and transparent partner. You experience a proud gesture of your partner being convinced of and focused on the overall service quality offered. The pattern makes you aware that you have a choice – and that your choice is right.
Take a minute and apply it to your business model. What would happen if you tell your customer that switching their bank accounts has been made much easier with PSD 2, that there is a cheaper mobile phone plan offered at your company or that an insurance actually doesn’t make sense anymore just weeks before automatic subscription renewal
What would be the immediate loss?
What would be the difference if a service like Aboalarm reminds you instead? What would be the longterm benefit?
Somebody who takes care of a job you have to get done? Organizing the company Christmas party, plan a trip to San Francisco, Refurbish the conference rooms? What happens is, that you lose contact to the companies doing the actual work. Your opinion on those companies is based on what feedback (if any) you get from your assistant. You often don’t even decide which vendor to choose – your assistant does. At least the preselection part of it. Your assistant creates a walled garden around you and takes over communication, negotiation and decision making. You have a much more trustful relationship with your assistant than with the vendor.
– Companies replace employees with artificial agents – often in form of chatbots or speechbots – Clients will trust their own artificial agents to communicate with company agents – Companies lose direct communication with clients – Marketing might have to become client agent centered – There is a huge business potential both in establishing the agent marketplace and / or the trusted AI agents for clients
Well, not all of us have assistants, but we are all facing digital assistants of companies to deal with us and our wants. Chatbots, which efficiently guide us through any problem we might have with a company’s service or questions we have about their offerings.
Here is the good news: In the future, not only those companies will have digital assistant – us as well. And that future is quite near: Tim Baarslag, a computer scientist at Centrum Wiskunde & Informatica in Amsterdam has some examples: „There are simple bots on eBay, for example “sniping agents” that bid at the last possible second. And there’s software that bids for ad placement online. Then there are negotiation support systems, software that assists humans by suggesting win-win outcomes. In a job negotiation, the system might suggest: “From the proposals received so far, it can be deduced that the salary level is very important for your boss, while you have previously indicated you value family life most of all. Perhaps asking instead for a work day at home could be in your mutual interest.” (full interview with him can be read here)
Both assistants will be digital agents, with whom we might chat or talk. Between themselves they will talk code. Let’s call them bots. The company bot will have a new sort of client, the bot of the client and he will stand in competition with many other vendor bots. Vendor bots will have to offer unique propositions to win the favor of our client bot. Client bots will be wooed by vendor bots and that will happen most likely at new kinds of trading platforms, which will regulate and match supply and demand of any kind of services or products. (goodbye comparison sites!)
There are many ways Vendor bots could create USPs to convince a client bot. It could offer smarter or more sophisticated services, run the better negotiation engine, offer more or better APIs.
And the vendor bot could take specific actions to increase the trust and loyalty of the client bot, which might sound a bit strange. But why not? The German sociologist Nikals Luhman defined trust as „confidence in one’s expectations“. The goal of Predictive Analytics is exactly the same.
A complete new set of cards – and Marketing will play a major role in the game. Today vendor bots are seen as additional communication and service touchpoints to reduce customer care costs and increase sales. In future, a lot of marketing budget will be used to market those vendor bots themselves to artificial clients – the client bots. The battle on who provides these client bots started a while ago with Alexa, Siri and friends.
In the long-run, trustworthiness will eat convenience when we decide which one to choose.
Bot centred Design and Marketing will adopt existing processes. Bot personas, bot segments, bot moments of truth along bot journeys – of course all applied to the digital world. I can’t wait to experience this new world of marketing and run my first iterative Co-Creation workshop with bots!
2008 a backbone of our modern society seemed to crash – the financial system was collapsing and we all know about the turmoil following. Today a presumably even more important backbone of society is in danger.
Rachel Botsman – a leading thinker and critically-acclaimed writer on trust in the digital age – describes the deep importance of trust in our society, for business and our social life:
„Without trust, and without an understanding of how it is built, managed, lost and repaired, a society cannot survive, and it certainly cannot thrive. Trust is fundamental to almost every action, relationship and transaction. The emerging trust shift isn’t simply the story of a dizzying upsurge in technology or the rise of new business models. It’s a social and cultural revolution. It’s about us. And it matters.“
It matters a lot – for example to Jackson, who experienced the impact of missing trust the hard way:
Out of nowhere Jackson got that very hard-nosed email telling him that she quits, right now! She will not answer any further communication – not now and never again in the future.
They had spent years in a trusting, happy relationship. He got to know her when she was quite young. He loved her way to question the world, her fresh unorthodox way to deal with authorities. „Fuck the system“ was one of her favorite sayings. They had so many unique and wonderful experiences traveling the world together.
When he received that farewell letter from her, he immediately questioned himself. He must have done something very wrong for her to quit such a long-term relationship so easily. She never acted that way before, on the contrary, freedom and belonging were core values they shared. It felt like it wasn’t her talking to him. Finally he tried to call her to clear out this grave misunderstanding. But no matter how hard he tried, there was no response. It was separation forever without any warning signal. What made it even worse, was from that moment on, all her friends were unreachable as well. His whole international community of friends shut their doors: loud and clear.
It kept him busy. How could this trustful, deep relationship end in such a way? After some time and investigation, he figured out what happened. He once – just once – spoke about one of her friends with people outside her group of friends. She never clearly said she wouldn’t like that, nor did she explain why she wouldn’t.
Her name is Airbnb – one of the digital giants we grant so much trust and control over our lives – as of now. I exchanged Airbnb with “she” – a human-to-company relationship with a human-to-human relationship, to highlight the mutual relationship and trust aspects in it.
According to the latest SYZYGY Digital Insight Report „The Digital Consumer in 2019” – a summary of top predictions from major industry trend reports – trust will have an extreme influence for business in 2019. Paul Marsden, Chief Psychologist Officer at SYZYGY AG explains: „In a post-truth world of fake news, propaganda bots and data breaches, expect a trust deficit to grow between consumers and brands. Forrester dubs 2019 the year of ‘Zero Trust’.“
Trust is an accompanying currency next to money. Companies need to handle trust with the same care.
Consumers’ trust in companies, and companies trust in consumers. Both aspects need to be handled much more carefully. Consumers are smartening up and leading digital consultancies like JWT, Accenture, Gartner and R/GA expect consumer-first empowering privacy policies and digital ethics to appeal in 2019. Companies need to professionally design, measure, manage and repair trust on an individual consumer to company level. Trust can be a major competitive advantage or a reason to lose most of the company value within weeks.
Jackson trusted Airbnb for years and recommended it to many of his friends until he got that farewell letter. And Airbnb? How much did they trust Jackson after those years of relationship? Was it a thought through decision to reduce the trust in Jackson to zero after one instance of giving feedback on an Airbnb host outside the Airbnb platform? It was against their policy, ok. Their reaction did not increase trust in their policies.
Have you ever experienced that sudden frustration of queuing in a long line in the super-market and noticing that you had forgotten your money? Upset at your own forgetfulness, you think of the hassle you will have to go through such as returning all the items in your basket to their shelf (or hiding them somewhere…?), walking back home and up the stairs in a hurry, fetching your purse (or smartphone or cards) then returning to the supermarket after having to phone your friends to tell them you will be late You would then have to collect the items and queue all over again.
Now imagine that instead the cashier would say “Oh It’s okay. Just pay us next time you come in”. With a feeling of gratefulness and appreciation at this generosity, you would leave the supermarket with a relieved smile.
The concept of “Put it on my tab” is not a new one and has been with us for some time. Many years ago, the “tab” consisted of a physical tablet or notebook where all these open payments were written down. When I went shopping with my Mum as small boy, this was generally based on the “Put it on my tab” pattern. The pharmacy, the fruit and vegetable shop, the butcher all simply made a note and billed the “family account” at the end of the month. There was no written contract and my Mum was so used to this system that she seldom took money with her – and she always returned to the same shops.
Doesn’t the same happen to us nowadays with many relationship-based business partnerships? We use the mobile phone and get billed later. We use electricity and pay at the end of the month. We use car2go and are billed after usage. Not to forget the invention of the credit card which is based on the same principle. The difference of these examples and the „put it on my tab“ pattern is, that they make you sign a contract to ensure you will pay the bill and your credibility is checked before you are allowed to have that business relationship. „We don’t trust you“ is their initial message.
In the “Put it on my tab” pattern, future payment is ASSUMED and the risk for the lender of not getting paid is accepted. This is an impressive sign of trust and one which encourages us to return as loyal partners. It also imparts a feeling of owing more than just the money you did not pay immediately. You owe loyalty and trust. The pharmacist probably experienced some incidents of fraud, but overall this policy paid off.
In e-commerce there is of course no one-on-one relationship to handle the risk involved in the “Put it on my tab” pattern and there is no pharmacist who knows you personally, but there is real-time data which makes it at least as easy to predict fraud and control the overall sum of losses involved in applying the pattern (more on this in future posts).
Have you ever applied the “Put it on my tab” with friends?
Presumably you have!
Have you ever considered applying the “Put it on my tab” pattern in your customer relationship?
Recently there was an amount of minus 3 Euros in my PayPal account and I was not permitted to use the PayPal payment service until I transferred these 3 Euro from my bank into my PayPal account. As I have been using PayPal for about 15 years, one can imagine how this affected my feeling of loyalty towards them. I was so upset, that I opened a Paydirect account instead – knowing that it would not be as great a product.
Imagine buying at Otto.de for years and one day at the online checkout your credit card seems to be invalid. How would it feel, if Otto.de would say, “No problem! We are sending the item. Please transfer the money until end of the month”
“Erst kommt das Fressen, dann die Moral”, stellte
Bertolt Brecht so anklagend wie resignierend fest. Wer kennt das nicht:
Den Sturmlauf aufs Buffet, wenn die Hühnerkeulen auszugehen drohen.
Bislang bestand kaum Zweifel, dass der Mensch ein egoistischer Raffzahn
ist. Die Finanzkrise scheint dieses Menschenbild gerade wohl zu
bestätigen. An der Börse wird gezockt bis zum Abwinken, ohne Rücksicht
auf Verluste. Die Verlierer campen auf der Straße und fordern Fairness
und Solidarität. Gutmenschen vs. Egoisten? Arm gegen Reich? Macht gegen
Forschungsergebnisse aus den unterschiedlichsten
wissenschaftlichen Disziplinen zeichnen in ihrem Zusammenwirken ein
anderes Menschenbild: Der Mensch als soziales Wesen, das Werten wie
Großzügigkeit und Gerechtigkeit den Vorzug vor schierem Eigennutz gibt.
Doch wie passt dieses Bild in den Kontext unserer bestehenden
gesellschaftlichen und wirtschaftlichen Strukturen? Ganz nah dran am
Puls der Zeit erforschen wir Zusammenhänge, die auf den ersten Blick
unfassbar scheinen. Wir werfen einen interdisziplinären Blick auf die
Befunde, die das “Gute” im Menschen beweisen sollen und fragen nach dem
Sinn altruistischen Verhaltens im Kampf ums Überleben. Wir nehmen den
Zuschauer mit auf sein ganz persönliches Abenteuer, an dessen Ende er
sich selber fragt, wie viel Altruismus wohl in ihm steckt.
The Milanese Cheese seller smiled at me from behind his cheese stand and didn’t really understand, why i wasn’t amused about the extra „Fior di Latte“ he snuck into my cheese selection. Fior di Latte is a wonderful cheese, similar to Mozzarella, but much creamier inside. I love Fior di Latte. But I also love to decide for myself, if I want to buy it, especially when it doubles the amount I have to pay.
The „Sneak into basket“ trick he applied is one of the so called „dark patterns“ used in eCommerce nowadays. Dark patterns range from „Hidden Costs“ to „Price Comparison Prevention“. All these tricks have in common, that they generate an unfair advantage in a business relationship. One could say dark patterns are the saving belt for Product Managers and Marketeers with over ambitious short-term sales goals. I guess with this simple trick the cheese seller sold quite a bit of Fior di Latte to new customers.
What he didn’t know was that I lived just around the corner for another 4 years and yes ever since then I quit my „business relationship“ with him and bought my cheese at the market stand right next to him. Business relationships evolve quite similar human relationships. Our relationships are not re-evaluated from scratch everyday. It is to a very high extent set at the initial moments of interaction (the introduction phase) and re-evaluated in moments of conflicts with the preset expectations. Black patterns, especially applied at the beginning of a relationship, define it to be based on distrust and low engagement.
The future of business is based on longterm relationships
We are in the business era of „everything as a service“ – meaning next to everything we used to buy is now available as a digitalized pay-per-use equivalent. And if it isn’t yet it will be tomorrow. Angela Merkel, the German chancellor, just recently predicted, that “everything which can be digitalized will be digitalized in the near future”. EaaS comes with an unbeatable set of competitive advantages in comparison to leasing or selling based business models. But they have one weak spot: EaaS based businesses derive little earnings or even losses in the beginning of the customer relationship. Every new customer produces initial onboarding efforts and running costs increasing the payout time for these relationship based businesses up to years. And usually these business models not only make the purchase decision much easier, but also the decision to switch the service partner (sell your car and buy a new one versus changing from car2go to drivenow). Robbie Kellman Baxter discusses the underlying opportunities and challenges of this business model in detail in her book „Membership Economy“.
The key success factor of EaaS business cases to break even are engaged customers.
It’s the level of engagement (activation, recommendation and retention) of their customers which makes EaaS profitable and this engagement is highly dependent on the quality of the relationship companies have with their members.
Just recently at the digital agency USEEDS°, we calculated the business opportunities in a fully digitalized wealth management service based on a „pay-per-use“ purchase model. For the customer this service is a highly attractive alternative to classical consulting fee based models. But for the bank the beauty of a scalable fully digital system only flourishes, if tens of thousands of customers actively use the service for years to reach the Return on Investment. The core lever of successful relationship businesses is the long-term loyalty and engagement of customers. There is no place for dark patterns in this business model.
We need patterns to boost long-term relationships
The success of relationship based business models is highly dependent on the quality of relationship they set in the introductory stage. All follow-up attempts to influence the relationship with Customer Loyalty or Customer Engagement programs are less efficient and effective. We analyzed 300 companies in their approach to set a positive relationship at the moments of truth (moments of introduction, trouble or expectation conflicts) and discovered a set of patterns which could be applied to any business. (we will present and discuss the patterns in future articles at trustpatterns.org )
The longterm business advantage in Trust patterns
Patterns trading an initial disadvantage for the company for long term Customer Loyalty and Engagement are the opposite of dark patterns – so we call these patterns Trust patterns. Trust patterns create an initial „unfair advantage“ for the customer (the reacting partner) not the company (the acting partner). Trust patterns foster the quality of relationship towards that feeling of loyalty and trust – a feeling of belonging. They are not magic. nor manipulative. Trust patterns suggest an initial investment to set positive, long-lasting relationships, in which the investment generates returns in time.
We are not talking business romantics here
Without a solid business case next to a great purpose vision and attitude, any endeavor is damned to vanish. Trust patterns in business are an extremely valuable building block in membership business which only derives the expected long-term revenue streams and return on investments, if you clients a held in a positive AND active relationship. And membership business is a mega trend around industries. According to a 2018 study* with 1200 teenagers in Germany (12 – 19 years old) , the amount of netflix users doubled within one year to 47% market penetration. Spotify grew by 28% from Q3 2017 to Q3 2018 toward 190 Million users worldwide. The ownership model will still be around, but undeniably, membership business and the „everything as a service“ mantra in digitalization are the new business paradigm.
Trust patterns define the necessary sustainable and profitable ways to make long-term business success happen AND spread the idea of trustworthy and fair relationships in our society.
*by 2018 JIM-Studie 2018 des Medienpädagogischen Forschungsverbunds Südwest