Apathy to Empathy: A Business Shift

Technology affects our everyday lives more than most would imagine. It has shaped our means of communication, education, social life and even business models. There are many studies that can show trends in delivery and production, yet the biggest change does not set a mark on a statistical chart nor can it be counted on a spreadsheet, but it is there. Technology is changing the very nature of business and consumers.

As a little as 15 years ago, the majority of businesses pushed product and services out to consumers. This was how companies have functioned since the beginning of the industrial revolution. Today, factories produce more goods than a population could actually obtain at sustainable levels. To compensate, companies decrease the cost of goods by lowering the quality of production to ensure constant mass production and keep pushing product to the mass market.

In 1998, two gentlemen, Joseph Pine and James Gilmore, authored the broadest, most concise look at economic changes with “The Experience Economy”. In the book, the progression of economic value is outlined and clearly defined. During the 2004 TED conference Joseph Pine spoke to this very progression. Both the book and the presentation explains how companies evolve from one economic value to the next. In their book, the authors identify some of the driving factors that make this progression clear. But even Pine and Gilmore could not see how technology would begin reshaping consumer consumption trends years later.

In 2010, Rachel Botsman spoke at TEDx in Sidney on the subject of “Collaborative Consumption” where consumers are making an incredible shift from acquiring mass production products to renting or sharing products only when they need them. She argues the issue that consumers are tired of acquiring “stuff” which ends up controlling their lives or where they must live to house this stuff. Consumers began creating a new consumer acquisition model. (see impact sample study)

U.S. News published a compelling article “The Rise of The Collaborative Consumption Economy” on  April 9, 2012 by David Brodwin. In this article, David identifies a new model of consumer habits, “peer-to-peer” consumption. No longer are people acquiring goods when they want something or even if they may need sometime in the near future, rather, consumers are sharing purchases with others or renting products when needed, minimizing space needs as well as costs.

Just as Pine & Gilmore investigated the progression of economics is driven by the consumer’s increasing demand for greater value, technology is a key reason in the evolution of economic value, however, there is another element that I feel is driving this shift in consumption as well as how companies are modeling their businesses. This is a shift from apathy to empathy. (see empathy maps)

Apathy Empathy

In the traditional business model of consumer goods or services, most companies functioned in a state of apathy. Not listening to the consumer’s wants, rather how consumers buy. Companies create offerings and push them out into the market and using marketing and advertising to create demand. Companies rely on consumer field research, focus groups and test groups to gain insights on what consumers will acquire next. Then came the internet.

At first, the internet was a great way to promote, distribute and sell new products to a larger mass market. For businesses, only a slight adaptation to their business model was needed to exist in this new competitive arena. Yet technology and the internet would begin to grow a new breed of consumers and educate existing ones. A consumer who shares information openly, resells products and even collaborates on product design. Business need to become collaborative if they plan to grow.

Through the use of social media and instant connectivity, the old model of apathy thinking is dying. If companies are to grow and maintain profitability, they will need to begin to think about consumers on a more empathetic level.  Understand how consumers see the world and those providing to them. Companies will need to listen more and tell less to the consumer about products and services. If there is any truth in this new collaborative consumption economy idea, then a new business model is needed.  A model that embraces empathy and moves away from traditional apathy. If companies truly want to know the consumer, then they will need to get to know the consumer and how the consumer sees and thinks about them.

Below is the visual structure model of the new “Empathetic Business Model”.

EBMsm

Originally developed in 2005 for a changing economy and to support a troubled industry, a similar visual model was created to help companies develop stronger observations about their focus markets. Over the years this empathetic business model has been refined and adjusted to work especially well for start-ups, small businesses and individuals. This type of model was conceived to work with traditional business models such as the Business Model Canvas which demonstrates cash flow, business relations and supply channels. The Empathetic Business Model, with a business journey map, is used as a prequel business model that helps companies or individuals to identify their strengths, determine possible obstacles and define the relationship between the provider and the consumer by using empathy as a key discovery tool.

If the consumer is changing their buying habits, then the model to provide for those habits needs to change as well. By employing empathy into a business development model, companies gain insights on the life of their offering, how better to serve their customers and increase the value they offer.

For companies to be successful in this Collaborative Consumption Economy they will need to shift from merely selling products to a market and begin listening to consumers so they can better serve their market.

If you’re interesting in learning more, follow the path along the journey map in the posts. The first “Starting the Journey” and request your access. Thanks.

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