The Relationship Economy Isn’t About Marketing

by Jay Deragon on 10/14/2013

relationship economyThe term “relationship” and its represented value have deteriorated over the last hundred years. It has cheapened to the point of insincere and meaningless marketing jargon used as spin to proclaim a desire to serve the interest of customers. The claims are similar to pickup lines in a bar where the only interest is to get into the pants, or in this case the wallet, of the other party.

The difference between a sincere and insincere interest in a relationship is one seeks the value of the intangible things and the other only wants the short-term tangible results.

A Lesson for Business

Last week I was surfing through my clouds of content tagged by categories of relevancy that match my interest and one article caught my eye.  The title of the article was “Marketing revolution: the rise of the relationship economy” written by Tom LaForge and published in The Guardian.  Let’s examine this proclaimed marketing revolution and the rise of the relationship economy.

The article reflects on the historical practices of business in terms of improving their products and services. Mr. LaForge writes “For the last 30 years or so, those responsible for branded products have been doing a great job of lowering costs and improving quality. They’ve optimized supply chains and computerized and mechanized every possible step that could be handed over to computers or machines. Then they Six Sigma-ed the whole thing repeatedly so that year after year, decade after decade, costs were squeezed out while, at the same time, quality steadily.” And Mr. LaForge takes the reader through the remaining evolution of business practices for reducing cost, improving quality, increasing functional and emotional attributes to the point where marketers themselves unintentionally created an environment where consumers wouldn’t care if most brands disappeared.

Mr. LaForge then takes the reader into what he believes is the new revolution of marketing, the rise of the relationship economy. He talks about how organizations need to define and focus on their social attributes to attract and keep relationships with buyers. He states “Unlike functional attributes, social attributes are not about the product. Nor are they – as with emotional attributes – about how the consumer feels when using the product. Social attributes are about relationships and relationships come in many varieties – some good, some bad. When a relationship is good (e.g. mutually beneficial, nonexploitive, voluntary), it is good at all times and in all places. When it is bad (e.g. beneficial to one party only, coercive, extractive or manipulative), it is bad at all times in all places.”

Bravo to Tom LaForge, who happens to be the Global Director, Human & Cultural Insights at the Coca-Cola Company, for saying what needed to be said.  However let’s be real about what is being said vs. what it takes to make it a reality.

The philosophical shift needed for any organization to adopt the precepts of the relationship economy is the first revolution that must happen before marketing can be revolutionized.  And the shift must start in the minds and hearts of leaders.  Leaders who still think that relationships are driven by tangible results are living in the past.  Today’s results are largely driven by the intangible capital an organization creates, or doesn’t create, for the benefit of its stakeholders.

The problem is most companies don’t understand the shift. Instead they try to act like they do by adding new words to their marketing campaigns. You can fake the tangible’s but not the intangibles.

Smarter Companies understand that because they continually identify, measure and improve upon their intangibles for the benefit of their stakeholders and the results come naturally.

{ 1 comment }

frank ramirez October 14, 2013 at 10:09 am

I agree that “relationship” is a term that has become meaningless. This is because true relationships are based on reciprocity. A reciprocity defined by the expectation of an equality in the value exchange and a foundation of trust. In capitalism were taught to maximize the inequity of the exchange in commercial engagements. This results in vendors minimizing their investment while trying to extract the most value they can from the consumer. This is fundamental to the consumer-business transaction. This also establishes a relationship not of trust, but of distrust.This is the foundation for competition and so it is a healthy attribute of an efficient marketplace. The end truth is business-consumer “relationships” today are more marketing doublespeak than truth. Consumers do not want relationships with companies, all they want is a fair exchange of value.The sooner companies realize this the sooner their brands will be trusted, then you have a foundation to build upon.

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