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The Evolution of the B2C Relationship

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Found in:    Consumer Products or Services | Financial Services | Healthcare | Restaurants | Retail/Ecommerce

We are always talking about how CX is a continuously changing practice that shifts to align with the current customer expectations and cultural norms.  Yet we seldom discuss past iterations of CX that are no longer relevant to the market.  While anticipation is key, reflecting on the history of CX can help to identify the factors that contributed towards changes in the past, and, in-turn help companies to become more equipped to both anticipate and cope with future changes.  

The history of CX as an acknowledged practice may be fairly recent, PeopleMetrics pointing out that the introduction of CX was a byproduct of businesses adapting to the media landscape in recent decades. Yet, the way in which businesses and customers interact today is the result of years and years of transformation that has occurred over the past few centuries.

Throughout history, relationships between customers and businesses have been defined by the available technology and existing societal standards.  With each major advancement, such as the introduction of automobiles, market relationships were redefined to fit the new standard. Let us take a little walk down memory lane.

Limited by Proximity

Starting way back, before the internet, before electricity and before steam-powered boats, people consumed at an exclusively local level.  Prior to efficient forms of transportation, customers were constrained by geography.  Their choices were dependent on the available options that were in walking, or a horse ride’s, distance. This is when you chose to buy your food from Bill because he was the only farmer for miles; or when you got your shoes repaired at Anderson’s Shoe Repair because it was two doors down from your house.  Proximity was the determinant of business and therefore, there was little competition. 

As a result of geographical limitations, relationships were oftentimes defined as multiplex, essentially meaning that people wore many hats.  Your barber was also your butcher, and he also delivered your first baby.  This type of relationship formed strong bonds between people that revolved around the individual’s holistic role in the other’s life rather than the products or services being exchanged.  

Most businesses at the time operated on a small scale, their pool of potential customers consisting only of those nearby.  This allowed for personalized interactions. Business owners could become very familiar with their customers, learning their preferences and expectations through repeated interactions.

New Modes of Transportation

The first major advancement that reshaped the B2C relationship was steam. With steamboats, people had mobility and they were able to choose from a wider selection.  If you did not like the haircut that your butcher gave you, you could hop on your steamboat and visit the barber who lives two towns upstream.

As society advanced further, new modes transportation, such as automobiles and trains, provided customers with more and more choices of where they could purchase goods or services.  They could go where the price was the lowest, or the product was the highest quality. As a result, relationships between businesses and customers were formed on the basis of the transaction rather than the personal ties between the two. This gave way to the simplex relationship, meaning that interactions between individuals occur on a single plane, existing to fulfill one purpose. i.e. Since you choose your barber based on the service, your relationship only exists in relation to that service.

Relationships Flattened 

As society expanded and grew, businesses scaled up and relationships were focused on sales.  There was no need to invest in marketing since companies owned the flow of information and sources from which customers could learn about other companies were limited.  Sure, you could choose to buy a car from the dealership a few cities over after your friend told you about their great deals, but customers’ access to comprehensive, comparative data was scarce.

Somewhere along the way of businesses increasing their customer pools and streamlining their relationships with customers to focus on the sale, the personal aspect was lost to uniform interactions.    

Age of the Internet

Then things changed when the internet came into play.  With the ability to compare and contrast businesses with the click of a mouse, customers were given a substantial amount of power.  In-turn, the relationship between customers and companies was reshaped yet again.  Now, in order to earn profit, business needed to leave a great impression on the customer that would keep them from moving on to the next. In a market in which the difference in the product across businesses was marginal, companies were pushed to differentiate themselves from their competitors in other ways. 

Whereas classic marketing techniques were effective in the early years of their existence, today most customers are immune to oversaturated marketing techniques like internet ads and commercials.   With unlimited options made accessible via the internet and other technologies, it is easier than ever for customers to abandon ship and find a company that better suits their needs.  That being said, the focus has shifted towards retaining existing customers and building a loyal customer base.  This means that companies have to establish a relationship with customers that will hopefully survive over the course of many transactions.

Returning to our Roots

Just within the most recent decades, there have been significant stages of change within the domain of customer experience, prompted by new technological capabilities .  For example, personalization.  Personalization is pushing companies to reshape their relationships with customers.  Advanced technologies have made it possible to store large amounts of data around the customer, allowing for businesses to gain a deeper understanding of the customer, their preferences, past transactions and general behaviors.  With this technology available, new standards and expectations are set.  Customers want an experience in which their relationship with a company is tailored to their personal needs and preferences.

In a way, the modern B2C relationship has shifted back towards the multiplex state where the connection between customers and businesses was established on a highly personal level, and existed in many spheres .  Now instead of personalization being a product of proximity as it was back then, it is a product of the technologies that grant companies the ability to create extensive databases of customer information. Customer data allows for businesses to achieve a similar level of personalization that Bill, the farmer, could provide, but presumably at a much faster pace.  

Furthermore, many brands today are expanding the channels of interaction. Now instead of only interacting with customers on the premise of a transaction, companies are infiltrating other areas of customers’ lives that do not necessarily lead to a sale; social media, for example. Social media is a platform on which businesses can become more than just a point of sale to their customers.  Just like how, back in the day, your barber also delivered your baby, now your mattress provider can also be a source of entertainment for customers on Instagram.  In an effort to create loyal customers, and satisfy existing ones, companies are interacting with them on multiple levels and through a variety of channels. 

The relationship between customers and businesses has undergone significant change over the years, revealing the influence of major industrial and technological advancements.  By examining these changes and the ways in which they affected the customer experience, we are able to better anticipate the effect of future changes.  Today the customer has most of the power, leaving it in the businesses’ hands to reach out and form lasting relationships.  Yet, who knows what major shifts lie around the corner.  Businesses need to be prepared for big change and the transformations that it will bring.

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