Beyond the transaction: Why community is the future of customer experience

When one of the biggest research companies in the world starts embracing trends you’ve been a part of for years, it’s a big moment.

Reading Forrester’s headline quote from their Predictions 2020 report, released this month, was such a moment for me: "consumers will choose experiences that allow them to cooperate with others for a greater purpose."

Finally! A prediction that recognises how the world is changing and is about the human, emotive side of business, rather than the technological.

A new relationship?

“prepare for consumers and brands to engineer new relationships that emphasise identity, purpose, and connection” - Forrester 2020 predictions

Why do brands need to ‘engineer new relationships’? Because in the vast majority of cases the relationship a brand has with its customers is still transactional. The brand wants to sell a product or service at a profit. The customer wants to satisfy their individual needs with that product or service. 

Nothing wrong with that you might say. And there isn’t. Business has ticked along quite nicely for centuries with transactional relationships but these have significant limits:

The 3 limits of transactional relationships

1. They don’t recognise the whole person: Transactions reduce both parties to what they need from, and can provide to each other, in that moment (e.g. my need for an Ethernet adaptor within two hours, fulfilled by Amazon).
2. They divide rather than unify: Transactions inherently separate the parties involved based on isolating their specific and different needs. If those needs were the same for both parties there would be no need for a transaction.
3. They ignore almost all outside impacts and benefits beyond the transaction itself: Traditional transactions rely on self-interest. There is no possibility to link the transaction to the interests of any third party or collective benefit. 

‘So what?’ Some still might say. ‘Why would companies or customers want anything different? I can go elsewhere to be recognised as a whole person: My family, my hobbies, even my work. I don’t need to build a connection with brands. Plus, I don’t see why either I or the company would need to benefit anyone else. That’s the work of charities or government’.

One way to understand why we might need to widen our relationship with brands; to go beyond the transaction, is to look at how the world has changed in the last 50 years. 

Every company, and therefore every transaction, is embedded in society. And society has changed more rapidly and more fundamentally in the last 50 years than in the previous 200,000 but at what cost? Our progress is increasingly understood to have come at the cost of the natural world and our own mental health.

Our progress is increasingly understood to have come at the cost of the natural world and our own mental health.

The last decade has seen an explosion in the technology applied to transactional relationships. This has greatly benefited the quality of these transactions, making them far faster, more convenient, hyper-personalised and 'frictionless'. So we all get more of what we want, just when we want it. This is why Amazon has grown into the most valuable company in the world...

But in optimising the benefits of transactions we have also optimised the downsides. Ironically our ‘hyper-personalised', 'frictionless’ transactions are completely impersonal, passive and disengaging (I can leave my house, pick up a package I ordered at a remote locker, pay for my tube journey using my phone, pick up my pre-ordered coffee, all without speaking to another human being). It's plausible to think that collectively, as a consumer class, we might wake up to the idea that the way we buy stuff has become unhealthy.

But in optimising the benefits of transactions we have also optimised the downsides. Ironically our ‘hyper-personalised', 'frictionless’ transactions are completely impersonal...

Change is coming...

In the last 18 months, the most senior institution representing American business (The Business Roundtable) and the CEO of the world's largest investment fund (BlackRock) have both made major announcements to the effect that companies must have a purpose beyond profit. 

There are two major forces at play here. From the ground up consumers are becoming disillusioned, and from the top down investors are demanding a fundamental change in the very concept of the company.

That's why Nike announced recently that they are withdrawing from Amazon, the kings of the transaction.

Transactional relationships cannot bear the pressure of these forces. By their very nature, they exclude the qualities that Forrester highlights "identity, purpose, and connection". Jefferies analyst Randy Konik said in response to Nike’s decision: "Amazon is just a traffic aggregator that reduces friction in consumption ... it doesn't build communities."

Community is the key to purposeful customer experience...

Which brings us full circle. Communities thrive on the opposite of transactional relationships: collaborative relationships. At the core of every thriving community is its essence, its purpose - by definition an interest beyond every individual, something bigger than themselves, something they all believe in. By interacting in such a community people feel a common bond. They feel closer to others, rather than further away, so they share more of themselves and learn more about others. A space is created for relationships to deepen and develop over time.

Forrester is right to say that consumers are hungry for meaning. The challenge for brands is how to create this meaning. Contrary to most previous business challenges the answer cannot be any single tactical or technological initiative. These will only create more isolated and empty transactional moments. Instead, the answer must start with the brand stepping back from the transaction itself.

This needn't be as daunting as it might sound. Stepping back from the transaction doesn't mean abandoning it. Adopting a purpose beyond profit cannot happen overnight. These transitions can be gradual, and often must be gradual - not just for practical reasons but in order to be authentically collaborative.

Simply sharing information about your company, or asking "how do you think we're doing?" is a collaborative act... when it happens in a community, with genuine intent. Small steps like these are surprisingly significant, because they change the ground rules. They create customer experiences that are not transactional. They create a new relationship with the customer which has the potential to deepen into meaning beyond self-interest.

And the success of these new relationships, as they become more common and deepen over the years to come, will be what makes or breaks the future. Not just for companies but of the world. The world's problems are systemic, they need collective understanding, collective problem solving, and collective action. Neither companies, nor customers, nor governments can solve them acting alone.

Robbie

Robbie Hearn

Co-Founder and CEO of Standing on Giants.

Read my white paper 'What is a community and does your business really have one' here.

Standing on Giants empowers businesses to build thriving communities that put customers at the centre of everything they do. If you'd like to find out more about how we could help you build a valuable community, don't hesitate to get in touch.