Rise of the Prosumer: Digitalisation Shifts Balance of Power between Businesses and Customers

Digitalisation has enabled everyone to have access to information and to share opinions of all kinds. The balance of power, which used to be the monopoly of the company now clearly leans on the side of the customer. The relationship between a business and their clients is significantly altered. The client becomes involved in every step of the supply chain and their influence and demands will have an impact on the products, services and prices. Thanks to social media, the customer has become a key figure that challenges usual business models practically in real time and interacts with the manufacturer and demands mass customisation of products and services.

Customers can compare, advise and influence products and services, blurring the lines between producers and customers. With practically permanent access to the web thanks to tablets and smartphone information, rating and comments are made in real time and can be more effective than long-thought out, costly advertising campaigns.

 

Prosumers

These influential customers are referred to as “Prosumers”, i.e. professional customers (though this is open to different interpretations).

The prosumers are so involved in the appraisal of the products or services purchased that they can go as far as finding solutions to solve bugs or finding technical or design ideas to improve. The prosumers do not only talk about the product/service but also about all its surroundings and are strong influencers; this new generation of clients scrutinise the whole picture; they care about whether the company is a good corporate citizen (see Apple, Starbucks and tax payment), a good employer, respectful of the environment and involved in the community.

Recently in France, the support from customers to local milk producers has influenced the outcome of negotiations between the biggest hypermarket names and producers.

Many customers go ahead with purchase decisions by reading previous clients’ reviews, rating and recommendations on websites such as TripAdvisor, Amazon, etc. Well aware of this, manufacturers and retailers try to be proactive and gather their customers’ data to ask for feedback after a purchase. 

 

Communication

Businesses have realised that digitalisation means a stronger engagement with all stakeholders – staff, suppliers, shareholders as well as customers - and the use of all digital channels as part of the business strategy. However inescapable, the use of those digital channels implies a change in the usual rapport and a loss of control over client relationship; positive and more often than not negative reviews on digital channels can very quickly go viral and repairing the damage done will take much longer.

It’s all about communication and interaction. Those businesses who understand the move and are able to put in place the relevant tools and data will have a significant competitive advantage.

Customers are associated in every step from R&D to after-sales feedback. With more involvement and greater consumer power, this also brings greater competition between businesses that not only focus on the product or services sold, but also on the type of relationship built between the company and the client.

Digital communications are a key weapon in the competition: the dialogue (tone and content) can become a differentiation tool to achieve the necessary competitive edge in a very competitive marketplace. Transparency, collaboration and interaction are vital: client, producer and supplier play on equal terms. The prosumer also informs on the strong and weak points of competitors’ products and services – a valuable, direct source of information.

This means that companies need to develop an internal digital culture – led by management - to boost brand reputation and customer loyalty by identifying and developing a constructive exchange with the different stakeholders; in particular, this means developing strong relationships with the prosumers who are potential brand advocates; this brings back some degree of control thanks to transparency, content and moderation, rather than letting two parallel monologues (business and customer) run side by side.

The competitive battle is no longer just about having the best products or services but also about winning opinions. 

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