Sneak Preview: The Extinction of Products and the Key to Brand Survival

by Christopher S. Rollyson    

The end of mass media as we knew it is old news, but what CMOs may not appreciate is that product firms will have a similar fate.  Even closer to home, brands based on mass produced products and services will no longer support the brand structure as we know it today.  These market forces are driven by social technologies which have spawned empowerment and enabled people to act on their natural preference for individualized products and services.  Today, although “mass media” still has a place, its stature is far diminished and will never recover.  Mass-produced products (and mass-managed services) will die for the same reason:  people prefer things that are personalized to them over generic-if-cheap things a machine cranked out for no one in particular.  Here’s why products will become extinct and how to guide your brand in building post-product customer relationships and profits.

Product Recap

Do you realize that products, as we think of them today, never existed before 1750?  I predict that brands built on mass-produced impersonal objects will die completely by 2050 – and many will perish decades earlier.  Of course, mass production itself will continue, but its products will no longer support the concept of a brand as we think of it now.  This will happen because impersonal products are not in harmony with people, who prefer things to be individually made for them.  Social business is a key enabler of mass customization because social technologies are an economical means for “makers” and “users” of things to communicate.  Prior to the Industrial Economy (its industrial revolution began in 1750), people made everything, usually to order.

Everything was a service, there were no products as we think of them now.  People served other people.  Stop and think about that a minute.  Because we’re going back there but differently.

Every place had its distinct style of dress, foods, customs, etc.  Even when there were duplicate “service providers” (i.e. bakers, shoemakers), each one gave something of him/herself to the service, so “differentiation” was baked in.  Personalized service is the rule that people have always lived by.  Reputation was core to differentiation.  It is in our DNA to appreciate “the personal touch” even though that can be positive or negative.  The past 300 years will prove to have been an exception.  The Industrial Economy, while it created unprecedented wealth, required standardization and depersonalization.  Machines harness physical power to transform raw materials into products very quickly:  wood to chairs, thread to cloth, tomatoes to tomato paste, iron to steel…  They work much faster than people, so the prices of all kinds of goods plummeted, which enabled more people to afford them.  Due to our vast success with mechanization and standardization, we applied the product (and brand) model to everything possible.  We tried to “productize” services to squeeze out more productivity.  We created standardized business processes, too.

However, we are encountering several problems that signal a significant correction of the product phenomenon.  As I predicted in 2006, the Industrial Economy is currently being subjugated by the Knowledge Economy.  Mass production will continue to experience diminishing returns.

The Problem with Products

When the Industrial Economy emerged, people owned relatively few “things” so there was pent up demand for every thing.  During the past 300 years, we have constantly improved the design and efficiency of machines, expanding their scope and scale so supply increasingly outstrips demand in each market around the world.  Too many products are chasing too few customers. Commoditization is increasingly the rule for everything machines can produce.  Businesses’ solutions everywhere are the same: find new markets “abroad.”   However, the oversupply problem is compounding fast.  Since the 1990s, financial liberalization and digital communications have globalized supply and demand and facilitated the growth of truly global markets.  Customers can buy online via the Web due to the Internet and liberalized financial systems.  As each market’s productivity increases, it focuses on exports so the producer-consumer imbalance is accelerating very quickly.  There’s no “abroad” any more.  Western CEOs and CMOs look at India and China as “huge new markets” for their products, but any success they have will be short-lived.  China and India will be exporters extraordinaire for sophisticated products and services in every category.  Mechanization will enable them to create oversupply very quickly.

What About Services?

By modern definition, “services” are intangible, so machines’ ability to deliver services has been limited.  Only services that are very simple have been mechanized (automated teller machines, car washes).  Other services such as telecommunications, cable, and mass transport are “mass managed” because they are designed for demographics, not people.  People endure them but don’t like them.  The services of dentists, dry cleaners, dog groomers, etc. have been too complex for machines to handle.  Smart machines will push the envelope here, but when these efforts succeed in mechanizing services, their value will fall fast for the same reasons products’ has.

Marketing – Where We Go from Here

The marketing profession coalesced during the 20th century to address early vestiges of oversupply.  Marketing had to “give products personality” by placing adverts, and it mechanized “the four Ps” everywhere.  Today it has decreasing impact because people are over-saturated by products and messages that try to create differentiation where there is often little.

Marketing is not the problem:  products are commodities, people are jaded, and this will get far worse.  To survive, marketing must transform by nurturing other people’s conversations about what they want to do with products.  I call this the Social Channel.  It is the new battleground for differentiation and sales.  The sun has set on the Productized Channel.

Marketers are very familiar with the concept of an “ingredient brand.”  Do you realize that, for most people, products are “ingredient experiences?”  Few people like to buy products; rather, they buy the effect they can create with the product.  This is where the puck is going, so marketers need to help people have experiences.  Mass customization will enable a new level of intimacy between maker (erstwhile producer) and user (erstwhile consumer).  For more on this, see Post-Product Marketing and Engagement.  Here is a simple roadmap for transforming your brand’s engagement and customization approach.

Step One:  Deep Engagement with Users

• De-productize and de-customerize your thinking, which assumes the reality that “we have product to move.”  Machines build products that are not for anyone in particular although their design is often meant to be most relevant to certain demographics.  This legacy thinking is dangerously out of place in the 21st Century in which impersonal products have rapidly diminishing value.
• Change your team’s focus from product features to users’ experiences.  Traditionally, marketers’ key goal was to get “consumers” to buy more.  They paid minimal attention to “user experience,” what people did with the product, but this is precisely how to differentiate now.  I forsake “consumer” and “customer” for “user” to mark this shift in thinking.  Your firm/brand/product team can collaborate with users to help them create unusual value with your “product.”  This starts with your commitment to user experience.
• Use digital social venues to locate, observe and nurture unusually relevant conversations.  Social venues are extremely efficient for helping people introduce, find, promote, and expand conversations.  Since social venues are usually asynchronous, they are highly efficient and enable several participant roles.  Remember, your team’s focus is now on helping people create meaningful outcomes with your “product.”  By the way, you can do this even if your product is highly commoditized like fasteners, toothpaste, or toilet paper.  Get involved in conversations in which these products play very important roles or in which the impact of minuscule product differences is great.
• To make this work, you need to be grounded in the user’s true experience, not what your team wants it to be.  When you listen to users talking among themselves, you will understand the difference; it’s what people say when you’re not in the room.
• Plan for a significant change process; many members of your team will resist this.  Select pilot teams carefully, experiment, measure, and adjust your approach.
• You may find the Social Network Roadmap(sm) useful to visualize the adoption process.

Step Two:  Changing how You Deliver

If you have not experienced deep engagement, it may be difficult to imagine Stage Two, but here’s how it looks.  By engaging users in social venues for a while, you gain extensive insight into how people are using your product – why they are using it, and what they are trying to achieve.  We call these “use cases.”  You also encourage some of your firm’s experts to interact with users, which improves their ability to innovate.  Anti-perspirant scientists engaging with breastfeeding mothers who want to avoid chemicals but work as sales representatives in the southeastern U.S would be an example.  The increased communication with users and insights into their desired outcomes will naturally lead to evolving the products themselves and/or elements of procuring, servicing, or maintaining the products (which your firm may also do).  Step Two probably involves your policies or terms of using the product (B2B firms) – or packaging, pricing, green initiatives,etc. (B2C firms).  Of course, we are assuming that making changes to policy or packaging is easier than making changes in product specifications.

You first accommodate users by making changes that will be valuable to them and have the least impact on your business operations.  Imagine how users will feel when you listen to them and respond in meaningful ways.  By the way, this is happening in a transparent digital environment so everyone sees how you are responding to users.

Step Three:  Changing Your Products

Stage Three will be a natural extension of Stage Two.  You will have seen quantitative business results in Stage Two, which enables you to progress to changing the product(s) based on interactions with users.  Note that, by now, you have already built a support group in social venues.  You can introduce and test ideas before changing the policy or making other changes.  You can create pilot programs for more (administrative/servicing/product) features.  Remember, the community of people you access in one or multiple social venues may be hundreds or thousands of people, possibly millions.  Your R&D team may have ideas it wants to vet with people in social venues.   An advanced phase of Stage Three is starting and supporting conversations about user experience in which you solicit ideas for new products, and these conversations are grounded in user experience not product features.  When you know how to build and grow online conversations, you combine your engineering, product, marketing, and service experts with the most knowledgeable users and can innovate much more quickly than any competitor. This can evolve into users designing products (the way this happens depends largely on the product you have and your users).  It may be appropriate for you to build a private social network using a white label solution.  CSRA (Christopher S. Rollyson and Associates) doesn’t advise this unless your assessment is that the venues in which conversations are happening don’t provide the right features or community benefits to let conversations fully flourish.  We almost always recommend using private groups or blogs first to test your assumptions.

Conclusions

• Humanity has existed for millennia, and we have a “nature” that prefers personalized over generic.  For the past 300 years, we have traded away our natural preference for more mass-produced things that have helped us create unprecedented wealth and comfort.  But we take these things for granted now, and we produce more than we can consume.  These are permanent structural changes.  I hope this post has got you thinking seriously about these profound changes because those who act first will have a very unusual and rare advantage over those who want to extend the past.
• Shifting focus from product to user experience will threaten many people, but it will prove to be a much more fun and lucrative space.  Being product focused caused brands to lose alignment with consumers because they had to push product. By focusing on user experience, you are aligned with users.  This means sharing control with them and building collaborative relationships with them.
• The extinction of products provides the true context for social business and why I cannot overemphasize its strategic importance to brands.

Brands that don’t see the end of products will perish, and no one will notice except their producers and vendors. Just think about the local papers and TV stations you have known.

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