From Marketing To Collaboration

The Fundamental Shifts:

The digital economy is dramatically changing traditional selling and buying. Buyers are getting tired of the advertising clutter and are turning increasingly to other trusted sources to get more objective buying advice. Sellers are finding it increasingly difficult to earn a return on their push-marketing programs. In other words, both parties are looking for a new solution beyond today’s traditional sales and marketing capabilities.

With each passing day, this new buyer-seller model is becoming increasingly clear. As summarized by the exhibit below, it is based on two key shifts:

From Selling To Collaborating

Today’s marketing solutions are all based on the same arm’s length marketing and sales model that originated with the industrial revolution of the early 1900’s. It requires sellers to design, price, advertise and distribute their value proposition to the potential buyers in their target market. It requires buyers to search through these innumerable offerings to select the best available option.

It is now possible for buyers and sellers to evolve to a much more time-tested and higher performing relationship model. One where buyers and sellers collaborate to find the optimal exchange of value.

This is not a new or unproven idea. Before the industrial revolution disconnected sellers from their buyers, one to one collaborative exchange practices (such as bartering, trading and negotiating) were the basis of virtually all buyer-seller relationships.

With the advent of the digital economy, increasingly connected buyers and sellers can once again move beyond the “take-it-or-leave-it” propositions generated by arm’s length marketing. Buyers and sellers can use emerging technologies to return to the time-tested practices of collaborative exchange optimization (CEO), yet in even more powerful ways.

From Campaigns to Interactions

Most businesses are very focused on maximizing the returns on their sales and marketing investments. This has resulted in an emphasis on increasing the profitability of sales and sales programs and campaigns. For many companies, the linkages between these investments and the resulting returns are often very hard to measure and understand.

With recent advancements in “Customer Relationship Management” (CRM) capabilities, it is now possible to focus at a much more relevant and actionable level. The focus can now shift to measuring and understanding the profitability of the value exchange which occurs at every point of buyer-seller interaction. In other words, at the point where profitability and value is actually determined.

Most companies have many different types of interactions with their customers across many different channels. It is now possible to measure, understand and optimize the value exchanges occurring at each of these points of interaction.

The Emerging Class of “Exchange Solutions”

When combined, these two shifts introduce the opportunity for buyers and sellers to collaborate to improve the exchange of value at each point of interaction. For example, when a buyer interacts with the seller while online paying a bill, a message could appear from the seller offering to forgive the payment, if the customer is willing to provide the seller with an offsetting benefit in return: consolidate more of their business, refer friends etc. Or when a buyer interacts with a seller by calling for a price quote, the seller might offer to vary the price depending on whether the customer would pay early or enter into a longer term contract.

ESI has developed the “exchange solution” needed to make it possible to have these collaborative win-win dialogues. Buyers and sellers can once again work together to optimize the exchange of value at each point of interaction.