Thursday, January 24, 2008

Most Interesting Newsread this week: Expectation Economy


Trendwatching is a great way to keep track of what's going on with consumers, trade, and industry. Very in-depth. Here's an outline summary for the report. Quotes from the report are in italics

  1. "We are dealing with "experienced well-informed consumers...[with a] long list of high expectations"
  2. Instant world-wide communications =instant opinions, evaluation and competitive intelligence
  3. Poor quality = instant peer to peer communication = consumer indifference = no sales and, no feedback directly to the company as to why this happens (consumers less likely to communicate directly to company - I would suspect a wise company would be out there searching blog-land with a vengeance)
  4. Consumers are also very likely to postpone purchases until something better comes along
  5. "This avalanche of consumer intelligence has even spawned a subtrend: consumer info as entertainment, consumers informing each other on the best of the best without feeling the urgent need to actually purchase anything. What started with armchair travel and TV chefs is now applied to virtually every industry or object that consumers desire. We've dubbed this phenomenon "VICARIOUS CONSUMPTION""

"The effect of the EXPECTATION ECONOMY on consumers' moods? Once high(er) expectations have been set, they are bound to go largely unmet, since the majority of brands still choose not to keep up with the best of the best (more on that later). In 2008, well-informed consumers will thus find themselves in a perpetual state of indifference and/or irritation. "

What happens if you are not meeting those high expectations

  1. Indifference: if the consumer knows a brand is under-performing, they'll skip it for the best of the best; indifference leads to not caring enough to contact the company to give feedback.
  2. Perpetual Annoyance: A company can actually be underperforming but not know it. When the best of the best is not available, or not available yet, the consumer will develop a "Fake Loyalty" and will decamp when something better comes along.

Know who is doing an exceptional job, who is best of the best, even if it's cross-industry.

  1. Your competition could be anyone. Not just in your industry or related industry. Consumers are looking for a good experience, the thrill of shopping for the must-have
  2. Expectations are set outside your industry. Think of the status of Singapore Airlines, the usability of Apple computers, the Ritz-Carlton standard of service "Broad trends based on consumer needs and wants will obviously unlock more of these expectations. Just take a look at our previous briefing, 8 trends for 2008, to figure out how these trends set expectations across the board: consumers will come to expect all industries to also start offering them the indulgence of PREMIUMIZATION, the green status fix of ECO-ICONIC, the budget-saving, experience-multiplying pleasure of SNACK CULTURE, the instant gratification of SEE HEAR BUY, the try-out meets relevance joys of BRAND BUTLERS, the uber-personalization of MAKE IT YOURSELF, and the satisfaction of being heard when participating in CROWD MINING. And they really don't care if you're in real estate, financial services, travel or telecom."
  3. Just copying the competition is a race to the bottom: Obsession with what your competitor is doing just makes you a smart follower and not using innovative brilliance.

"Now, all of this is of course not to say that you shouldn't actively track what's happening in your own industry. But in the next 12 months, do also constantly ask yourself: who are our other competitors? What experiences could our product or service be traded in for? And what can we learn from other industries setting consumer expectations across the board?" Go for the premium, indulgent, customized experience.

Tracking and setting expectations

  1. Find out who, in whatever business is setting the bar in customer expectations. Note your own experience with various businesses. Write it down. Photograph it. Document it.

"If you need more, you should re-read our 5 Trend Watching Tips and our previous Trend Briefings, scan Springwise New Business Ideas, even spend a modest part of your 2008 research budget on our full 2008 Trend Report, which comes in ready-to-share PowerPoint format. Oh, and we of course expect you to let us know about any results that are worth mentioning in future editions of this briefing ;-)"

Our take on the article

Libraries are service industries. Examples like Starbucks show us how consumers like to experience luxury brands. How to libraries provide upscale experiences and services? How to libraries meet the service expectations set by the Ritz-Carlton?

Look at other industries. H&M clothing specializes in up to date clothing at low prices. How could a library meet the up to date expectation? How does the library meet the usability expectations set by Apple?

Yes, we're in a slow economy right now. Budget cuts may make big projects seem impossible. Look at small baby-steps you might make to lead your library toward meeting those expectations. Brainstorm, break it down. Even at a snail's pace libraries still move forward.

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