Trust and the digital economy
- Half way up a mountain in India or in a back street in Putney, trust is the new currency for the digital economy, argues JP Rangaswami.
But I wasn't entirely ready for a conversation around digital marketing to start half way up a mountain in India.
"My favourite restaurant is up a mountain in India. It doesn't have any advertising so if you don't know someone who knows about it you can't get the phone number. It's sited in an ancient observatory so you have dinner in the observatory itself, surrounded by all the artefacts.
"The rules of engagement are that the owner opens up the restaurant for you specifically so that whether you are 4 people or 30 people the restaurant only comes alive when the owner agrees. There are no menus. He asks you a couple of questions at the start, then you have to trust him. You pay him for what he considered to be his value. He cares enough about you for the whole thing to be about you. If you left a tip, you'd never be allowed to come again."
But there is a new tip - in the shape of a TripAdvisor recommendation:
"I went to a Goan restaurant in Putney where I was told not to give a tip, but to put a recommendation on TripAdvisor. The waitress asked if I liked the food. So is TripAdvisor the new tip. Now it's not a controlled environment and you might end up being attacked by your competitors. But in something like a 6 week period I've come across 20 instances of this. Every one of those instances has gone for the same channel - TripAdvisor."
For Rangaswami it's about what he calls a trust revolution.
"There's been a transfer of power that changes the rules of trust. In the past, I had to trust that a restaurant wouldn't poison me; now they have to trust that I won't smile and smile and poison them online. It's too blasé to say your brand is in the hands of the customer, but because of TripAdvisor it becomes an action point. The customer is in charge of your brand and the brand needs to be responsive to how you treat the customer. Smart companies have already taken note of that. I love the principle that customer service has largely become recommendation seeking. The best way to thank me is to tall someone about me. Once that becomes the engine that drives a business then it validates every bit of what the customer company really is."
Trust manifests itself in different ways, he adds:
"I was in the Bahamas last year at a place that used to be US military base. It looks at first like you're in Havana without all the crowds. I was paying the bill for having spent the week there. We were due to leave in ten minutes. I had trudged up the stairs from sea level - which was a long way - and I realised that I had forgotten my wallet on the bar. Now it was like Clapham Junction there with I don't know how many people passing by. When I got back down, the wallet hadn't been touched. The waitress hadn't put it behind the bar, just pointed over to where it was sitting. It was part of the trust thing, something about the place and the attitude there."
What does it mean for business?
The question of course is how this helps businesses. Salesforce.com is now - it says - the Customer Company, a shift away from its previous Social Enterprise messaging that heavily buys into research firm Gartner's argument that the Chief Marketing Officer (CMO) is the new powerhouse when it comes to ICT procurement decisions.
It is to this audience that Salesforce.com is pitching its Marketing Cloud vision:
"What I'm seeing now is that people understand the marketing cloud idea is that people understand it it in a way that it has become real and deep enough to change the behaviours of people I engage with. I know of nothing that would connect a woman in a gently dying resort in the Bahamas with a man in a Goan restaurant in Putney other than that they just want to do well and for people to tell other people about that."
The impact of this on the CMO and the CIO relationship is one that is still evolving. Gartner plays up the CMO at the expense of the CIO power base, but in the real world - away from spinning pitches to win consultancy business - the CIO is more likely to adapt his or her role to accommodate the new Line of Business influence within a digital enterprise.
Rangaswami suggest that when he's pitching the gospel according to Salesforce.com to C-Suite gatherings, he can take it for granted that somewhere around the table is the CMO:
"A few days ago, I was part of a presentation where the only people present were CMOs. I have heard people say that they are in charge of digital. The role implied by the likes of Gartner is one that is closer to marketing than to IT. It's unreasonable to paint all CIOs as the same. The CIO who thought his job was procurement is likely to be finding that his territory is increasingly hard won while the CIO who thought he was about information is much more likely now to be trusted advisor to the CMO."
Back to customer basics
It's also about putting the customer back at the heart of the organisation, a 'back to basics' shift to the original days of CRM, but this time empowered by social and digital technologies and with the emphasis more heavily back on the customer aspect. Rangaswami argues:
"The first interest for the C-suite is growth. They need to have growth in a period in a period of economic uncertainty. Digital and social become about the customer. I stress that the customer company issue is seen and felt by B2B organisations as much as by B2C ones. There are a number of angles. Every person in a B2B world has a B2C life. They are human beings.
"No-one has ever explained to me that we've stopped being people selling to people and people buying to people. It's still about human interaction. Everywhere you look you see clustering taking place and see B2B/B2C type chains forming. The purpose of business is to create a customer. Every business - from an investment bank through to GE building jet engines - knows that at the end of the chain there a customer. If there isn't, then there's no reason to be in business."
Not everyone's going to get this though, are they? Anyone who's had to wrestle with so-called customer service with a utility firm for example might question that every organisation gets the new power of the customer. Rangaswami concedes:
"Utilities are an example of the classic lack of competition. Brand is being effected though. Even in low choice environments, some of the those regulated spaces have oligopolies. In the UK, we may have been willing to undergo a level of pain before we switch brands, but as we discover the pain that is being inflicted we are willing to take a stand."
But even Luddite utility firms need to make a change, insists Rangaswami :
"It's said that it took IBM 40 years to 'become evil' Microsoft ten, Facebook five and Twitter one. It's not that companies are becoming more evil of course, but there are more tools there to recognise and pass on the idea. Most monopolies still tend to disregard that, but they had better not. People will say you're not a place that they want to work. You try hiring in a market where you're recognised as place where people don't want to work."