Who owns Audible? Amazon or its customers?
Many companies operate under the assumption that they own their products and services. But is this really the case?
In traditional physical manufacturing businesses, products undergo long cycles and are designed, made and sold — at which point the ownership, along with its benefits, transfers to the customer.
Compare that to digital business where services are software-only, or where even the most mundane physical products come with embedded software and an app, and everything moves faster.
New software features can be released on a daily or weekly basis and the feedback loop is reduced to mere seconds or minutes. Take Facebook, which provides app updates every two weeks, and Netflix, who use similar automated systems to optimise new code deployments in under 20 minutes.
Added to this rapid response time is the tightened interaction between the customer and the provider, such that they are close to being simpatico.
Amazon, for example, is closely linked to its customer base because it tracks and analyses their behaviour in real time. Their data catalogue receives more than 50 million updates per week and new data from consumers is processed and fed back every 30 minutes. What this illustrates is the tightened relationship it has with its customers and the speed at which every transaction is analysed and responded to.
Because the interactions between the user/provider is happening in such a fast and intimate way, trying to nail down a definition of the product becomes a near-impossible task. Things are shifting at such speed that any attempt to define a product becomes meaningless — it’s constantly in flux.
So What Exactly Do You Own?
The narrowing of distance between consumer and provider in digital business reorganises the view of what product ownership is. What we argue is that what you own — or should own — is the process by which you and your customers interact. Because the user and provider are so closely linked, the interaction in a way, becomes the product. And that interaction is ever-changing.
In conclusion, where are your organisation’s precious resources best spent? Is it trying constantly to define the ever-changing product to fulfil a misplaced sense of ownership? Or to focus on mastering the process of interaction with your customers?
Rather than try to define what your product is, focus on owning the process of interactions with your customers and the immense value it brings to your services. Otherwise the risk is losing customers who can easily compare competition and leave for another provider who understands the importance of managing these interactions and can do so in real time.