My latest card on CIAO is on ‘bought by many’ insurance as an example of how global connectivity is driving commercial shifts in conventional business models. And of course in this instance it is very reminiscent of the old mutual funds of the industrial revolution, with people (in this case in close geographic rather than virtual) in close proximity grouping together to create a protective mutual fund.
And that triggered a thought as to what else was a new invention of an old model. After all, Guest Houses and Bed & Breakfast offers have been around for decades without anyone suggesting that the hotel industry is under threat globally. And the auction model behind eBay is centuries old. So what is it that is truly different if it isn’t the product underlying the transaction?
It is to my mind another example of experience overtaking service which has overtaken product as the key attribute of any transaction. That experience can be made up of many things, some of which are not really related to the transaction at all – the experience of browsing AirBnB for example feeds dreams of holidays as much as it does provide a solution.
Choice too is part of the experience – the choice of global offerings (Etsy being a prime example) rather than local or national. And of course convenience – all done with a few clicks rather than needing to visit or phone.
So I started to think about what else that experience offers – how far in the value chain does it extend? In the case of AirBnB you may not actually be wanting or needing to travel at all – browsing through where you might go can happen in the absence of any specific trip (although it may then become a trigger for that trip). So that extends the journey in advance of a specific transaction, And similarly, getting to know the owners of where you stay may result in new friends – extending the chain well beyond the specific visit.
Experience is becoming key for customers but increasingly I think it offers huge value to providers and suppliers too, in creating extended and different value chains for old models. Numerous new points of contact with customers, and opportunities to build the relationship. So perhaps these are new models rather than just reinventions of old . . . .