For decades, companies relied on push marketing to sell their products and services. Then, in the 1990s, the emphasis shifted to relationship marketing, as slogans such as “delight your customers” became the mantra of many marketers. But those tactics have been losing their effectiveness, particularly as the power of customers continues to grow. Thanks to digital technologies like the Internet, today’s increasingly educated consumers expect companies to do more than just delight them. In response, innovative companies are now trying a different approach: They are providing customers with open, honest and complete information, and then finding the best products for them — even if those offerings are from competitors. In short, they are truly representing their customers’ best interests, essentially becoming advocates for them. The strategy is this: If a company advocates for its customers, they will reciprocate with their trust, loyalty and purchases — either now or in the future. The firm might then command higher prices for its products and services, as many customers will be willing to pay for the extra value. And when people trust a company, they will often tell others about it, helping to reduce the organization’s costs for acquiring new customers.
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Research was funded by the Center for eBusiness at MIT, General Motors Corp., Intel Corp. and Qwest Communications International Inc. The author is grateful to Vince Barabba, Ross Blair, Iakov Bart, Mary Murphy-Hoye, Jeff Katz, Melanie Kittrell, Andrea and Dana Meyer, Stefania Nappi, Brian Rhodes, Venkatesh Shankar, Ron Shelvin and Fareena Sultan. And the author acknowledges his MIT research assistants David Gagnon, Mahesh Kumar, Susan Lee, Lauren McCann, Rami Musa, Fernando Ramirez, Siva Ravikumar, Jessica Santiago and Telmo Valido.