Used to be you had to please your customers, your investors, and the press. What happens when your customers are your investors and your press?
This article is part of Inc.'s special report on How (and Where) to Make Money in 2013 (and Beyond). Follow the links at the end of the story for more game-changing trends, bold predictions, and hot markets to watch next year.
In today's networked, hyperinformed economy, customers are no longer mere buyers. They're helping design and innovate products and services, preordering and funding products that haven't been created, and even investing directly in early-stage businesses. If you continue to treat your customers as mere sources of revenue, you're missing the boat--and, quite likely, pushing them into the arms of a competitor who understands the truly important role they can play.
For a look at the opportunities, and perils, of this new customer-centric model, consider the Pebble Watch. The company launched via the crowdfunding platform Kickstarter, raising $10.2 million and netting orders for some 85,000 watches. When the anticipated September delivery date came and went without explanation, Pebble took a serious beating. But the company rallied, posting regular updates, including videos and photos from its production facility. And Pebble's founder, Eric Migicovsky, learned an important lesson. "It's awesome to see the amount of support we have after posting an update about production," he says. Kickstarter learned its lesson, too: In September, it announced new rules that, among other things, require project creators to better disclose risks and challenges associated with their projects.
But crowdfunding is just one way to get customers involved. Quirky, a New York City company that manufactures household goods and tech accessories suggested and voted on by its 300,000-strong community of citizen inventors, uses another model. Rather than preselling, Quirky produces selected products at its own risk and rewards "influencers"--those who have helped to refine the product--with royalties on the items' sales, which gives them an incentive to promote the items themselves. The model has essentially eliminated the need for traditional marketing, says Ben Kaufman, Quirky's founder and CEO. "The nature of marketing is convincing people they need something--you don't need to persuade someone they need something if they've already told you they need it." Kaufman expects to see more companies follow his lead. "It's the smart way of doing things--learning more about what customers want up front, before making a big investment."
Even when customers aren't literally invested in a company as product consultants, there is a growing need for companies to be more transparent. Forward-thinking brands in all industries will increasingly be expected to disclose information--about products, labor practices, sustainability--that customers care about. "Brands will need to move from just having nothing to hide, to showing and proving everything they do," predicts David Mattin, senior analyst at Trendwatching.com. "Even consumers who aren't interested will expect brands to prove their ethical credentials to those who are."
Tricia Wang, a digital ethnographer who has worked for Nokia and Microsoft, points to another emerging trust issue that marketers may need to think about. "For a long time, brands thought that they only had to focus on developing trust with their consumers," says Wang. "But as companies start embracing sharing models that can rely on people's networks to popularize their product or even create the service itself--think Airbnb--designing for trust will be a top priority. Successful companies will be the ones that figure out how to foster trust--not just between the company and the consumer, but between consumer and consumer."