Apr 06, 2022
In Questions & Answers
Our economy has and will continue to shift from a focus on ownership to a new focus on access. The rise of the sharing economy ( Airbnb ), the subscription economy ( Netflix ) is disrupting the balance of power on a global scale. Since 2012, subscription revenue has grown nine times faster than S&P 500 company sales and four times faster than U.S. retail, according to Zuora's new Subscription Economy Index . In paying for a product or service rather than owning it, consumer habits are shifting from transactional to relational . Consumers demand more from brands than to buy them at the best price. They want the best customer experience throughout the life cycle of the relationship, shifting the global focus from the transactional economy to the relationship economy . relational economy It turns out that relationship-based exchanges are not new, but rather the oldest form of transactional model known to man. From the dawn of civilization to 300 BC, humans participated in a local relational economy marked by barter —eggs for furs, cheese for seeds—with people with whom they had a common connection. Confined to smartphones, consumers in today's global relational economy are free to choose their own path. It’s no exaggeration to say that as more and more customers use the services of companies that offer stylish vacations industry mailing list let a personal driver swipe their fingers (millennial car ownership is at an all-time low). Brand new meaning At this point, some marketers might chime in because their business model doesn't rely on subscriptions or shared access, but rather on selling actual products that customers buy and own . Nonetheless, these marketers are also part of the relationship economy , as the concept of branding has changed accordingly. Free Photo/Pixabay In the consumer economy , the meaning of a brand depends on the "image" in the minds of consumers. This image adds an aura of appeal and uniqueness to the brand's products and services, amplified through marketing magic, and reinforced through repetition. But as we move into the relationship economy, brands are increasingly defined by the consumer experience — to the point where the relationship with the consumer defines the entire brand. Take Nike, for example, a very successful brand whose business model is based on selling sports equipment and currently tops Forbes ' list of the world's most valuable sports brands with a valuation of $15.9 billion . What keeps Nike at the forefront is the fundamental nature of its relationship with consumers, which has long evolved from one between sports companies and customers to one between athletes looking for better performance, with Nike acting as a helper. A personal trainer for them to achieve their goals (e.g., track workouts via the free Nike+ Run Club app, and $200 running shoes).