Consumer-to-business and the value of social media

Harry van Vliet, Erik Hekman and I have started a summer writing project with the work title ‘The value of social media’. Eventually, this writing will become a cahier, say, a booklet. We work in a wiki. We write in Dutch. The text will be translated in English once we are done.

One of the topics I discuss is business models. In core of business is trade: You have something to sell, I want it, we trade it (when for money, we call this transaction, when for something, barter). You may also refer to this system as needs relationship. Today we also observe a new form of needs relationship, that of Consumer-to-business (C2B). One of the most common definitions of C2B is that this is an e-commerce business model in which consumers offer products and/or services to companies that pay for it. CB is therefore a 180˚ shift of the traditional (B2C) business models. We also call this the inverted business model. Inverted business models emerge under the influence of two main developments:
1- The rise of the current web (web2.0) with keywords such as interaction, participation, transparency and community building has an impact on two-way communication and value web creation (in contrast to the traditional value chain),
2- The downfall of costs of technology. Individuals now have access to technology and applications that used to be restricted to companies due to the costs.
Due to these developments, people are empowered to create their own digital environment. Consequently, (some) people will use that empowerment to also create a certain commercial environment.

Another way to look at C2B can be found in research, conducted by Chen, Leen and Chuang*: “Compared to the three frequently mentioned models: B2B, B2C, and C2C, which are now very popular, the progress of the other one (i.e., C2B) is far left behind; it is seldom seen on the Internet. A possible reason for this situation is the high transaction cost. It takes effort to unify a group of buyers’ common needs and preferences and to interact between the buyer’s party and the potential venders in order to complete a transaction. Moreover, it is not clear how to do it; there is little research into this problem”.
The authors further state that C2B is mainly a matter of collective buying processes, e.g. participating in organized leisure travel; in this case, the consumer will modify his personal whishes because of the lower price that has been negotiated collectively with the offerer.

In his thesis, Alexander Osterwalder states**: “A business model is a conceptual tool that contains a set of elements and their relationships and allows expressing a company’s logic of earning money. It is a description of the value a company offers to one or several segments of customers and the architecture of the firm and its network of partners for creating, marketing and delivering this value and relationship capital, in order to generate profitable and sustainable revenue streams”.
Strangely enough, it is hard to find definition of C2B that are not company-centered but more consumer-centered. Currently I am conducting a literature study of, what I would like to call, ‘real’ C2B: consumers proposing to businesses, specifically in social media. We’ll see what the values are

* An agent-based model for consumer-to-business electronic commerce, National Sun Yat-Sen University, Taiwan, October 2006.

** The business model ontology, a proposistion in a design science approach, University of Lausanne, 2004.

180˚. Eureka, a thought about changing consumer behavior

Again I was walking the dog and came up with an interesting thought. I was contemplating on my thesis – Harry and I are working on it, as it will be my ultimate research goal for the next couple of years. The current title is “What is the influence of cross media on the relationship between consumer and company? And/or, how does the relationship between consumer and company change under influence of cross media?” Somewhere along the thinking path, I came across 180˚. For me this seems quite obvious. The questions above imply a certain C2B; consumer to business approach.

C2B Is probably a new thought. I got the idea from Harry who gave me “Brand to community” and in our talks, it became clear that there is a tendency of consumers shifting their paradigms to receiving them to giving propositions to brands, companies, organizations. We all know the old B2C marketing and we even understand that there is a C2C; consumers to consumers, telling the world about their favorite brands. But consumers telling brands what they want – giving propositions to brands – that’s new.

I set upon the task of worming myself into these thoughts and came up with the work title 180˚. I can identify certain weak signals that consumers want to tell the brands what they expect of them. It’s not so new. The automotive industry enables individual buyers to adjust their car to their own standards. Nike and K-Swiss offer people to personalize their sneakers. And, as far as I am concerned, this trend is just the beginning of what I now call 180˚. Everything will change.

In my book Vision, Mission, Compassion, I talked about the rotation dynamics in society. And now I see that those words, given by Hans Dijkstra, are becoming reality. The rotation dynamics, or better Dynamics of Rotation is: explained as follows: Normally, the dynamics of rotation in the triad of the Mission is clockwise, from Master plan to Requirements to Concept, unless we reverse directions, i.e. move from Concept to Requirements. This dynamics – moving reversely – is hardly ever practised in organisations currently. Organisations and the people who operate within them commonly remain in the vicious circle of rules and regulations. This results in over-regulation, both in our organisations as it does in society; rule after rule (Requirements) is apparently needed to structure our living together (in broader terms, our Doing (Concept) until people are fed up by over-regulation and will, mostly collaborately, protest en act: reverse the dynamics. This dynamics of reversal will not move to Requirements but to Kernel, the start of the next phase, that of Participation. We make a very relevant reverse move; from Concept to Kernel. Kernel is the first foundation of the compassion statement. This reverse in dynamics is in fact the move we make from the Planning phase (Master plan, Requirements, Concept) to the Participation phase (Kernel, Targets, Identity). Thus, this reverse dynamics is a true milestone in the processes of Communicative Strategy.

If you have not read the book, this may sound abracadabra. No sweat. What it means is that people are constantly fed with new rules, ideas, thoughts, you name it. What happens is that we don’t see the benefit anymore. There is no added value in new things around us, whether they are rules or new things. We seem to accept new things as a given fact. But instead, we react to all these changes in a way nobody seems to be able to anticipate on; we act differently. We do so by turning things around. 180˚ in a constant pace, just like we fill a bucket with drops of water time after time, until it flows over; the tipping point.

I believe that one of the most important factors of this collaborative behavior comes from being given the opportunity to be informed and actually do something with the information given through modern media; we know so much more than before there were cross media. This idea implies that cross media (the new ones, I must insist) actually change our behavior. Let’s find out.