There’s an interesting topic being discussed over on Web-Strategist.  Once again, Jeremiah Owyang challenges us to think of a new paradigm that could change the way companies relate and react to their customers.  Ultimately, I disagree with what he says although I think he’s onto something:  communities of customers, when banded together will have greater power in product development to the extent that companies will have to adjust their product strategies to meet these demands.

Essentially, what Jeremiah is saying is that in the future, PR will be transformed (at least partially) from representing organizations in a relational aspect toward stakeholders to become actual representatives of the stakeholders themselves as these stakeholders relate to the organizations.  This will become part of the purchase pattern.  In essence, PR firms will represent the interests of communities as companies look to bid to have their products or services purchased.

I don’t see this happening in the direction the discussion is going.  There’s a variety of reasons why I believe that this is the case.  First of all, I don’t see this as part of being PR.  And I would think that the essence of most of these proposed communities may make this, as an industry (meaning vendor relationship management), too difficult to formulate on a large scale.

That doesn’t mean that I think that the idea has no merit.  It does, only I think we’ll see it emerge in a different form.  Communities can have a strong voice and companies WILL need to adapt to this.  They could easily affect product development and subsequent marketing.

My own personal experiences lead me to think this way.  Maybe I’m biased.  Maybe I’m knowledgeable.  I don’t know.  Here’s the factors that I’m basing my beliefs on:

This isn’t a PR function.

Much of the theories such at this that center around using social media are done by PR people or by those that heavily engage PR people via social media.  Sometimes, as a result, it gets too focused on PR.

I’ve actually run a “user community” that had a direct relationship with a company.  So I’ve seen first hand the importance of the company-customer relationship in a representative setting.

I live in the Washington DC area, where we have many trade associations.  Associations act as representatives for their members, be they before the halls of Congress or in the marketplace.

My long held belief that much what is predicted by theorists (although not necessarily Jeremiah) are by people whose background is in technology.  They base their beliefs on their experiences in the technology field in which the dynamic between vendor adn client can be quite different than most.  They often extend their vision to that of other industries, which often is inappropriate.

With those factors being put into consideration here are reasons why I don’t think it will happen this way:

Customer bases may not be able to effectively translate into communities

That’s right.  Customer bases may not be able to effectively translate into communities.  Too unorganized.  Too dispersed.  It will take some sort of centrally focus agent that can gell the community enough to act cohesively, to get the individuals to think of themselves as members, and to put some sort of collective preference ahead of what may be personal preference.  Ergo, the industry of community/customer based PR representation will not develop en masse.

Customer bases will often not agree enough to maintain their strength.

Think health care reform.  This health insurance reform.  Think abortion services.  We’ve got millions of people in this country that have strong views on this issue one way or the other.  I can see a mess if a group of businesses in a particular industry got together to solicit bids for health insurance from companies and a powerful contingent within the group was demanding that abortion services be provided, forcing all members of the group to either be part of this health care plan - at a reduced rate.  Many will leave the group.  There goes the group.  And that’s just one issue.

I could also see how other types of differences may spring up regarding demand.  They could be regional, demographic, cultural.  I’ve always maintained that you’ve got to engage people on THEIR terms.  Minority viewpoints could be overlooked, disregarded, or trampled upon.  And if their funds are being used to pay for something they may either object to or think they will not benefit from (but whose competitors may benefit) could create a tremendous amount of dissension and outrage.

Vendor resistance will be strong.  PR firms will need to get paid - who will do that?

Key question:  who pays?  If the PR firms - or whatever the selected body is that represents the industry members/customers - want to be in this type of business, they’re going to want to get paid.  Who will pay them?  Will it be vendors?  Competing vendors who may already have to provide more and more customized products and/or services (which likely increases costs) for perhaps lowered prices could potentially give them razor thin profit margins.  Doubt that’s gonna happen.  In the early 00’s there was a phenomenon that was going to vastly change businesses.  Industry run net marketplaces.    These were to be online industry focused exchanges where vendors would bid on client listed needs and demands.  It was going to be huge - at least according to those building the exchanges and a few professors at major business schools.  They practically all failed.  Why?  A lot of the potential vendors largely stayed away from the exchanges.  There is an obvious difference between the exchanges of several years ago and the ideas that are being talked about today, but nevertheless, companies aren’t gong to give up that much power.  And I think they’ll largely succeed.

I just don’t see most of these communities developing that much power that quickly and easily, especially when companies resist.  The groups have to remain cohesive and united…united enough to hold off individualistic purchases for the sake of group continuity.  They have to represent a solid majority of the specific customer base, making it very difficult for vendors to work around them.

Brand Loyalty and one-to-one engagement

I still believe in brands.  I still believe that people’s expereince with brands can outweigh their sense of giving up individual preference.  And with social media, if you believe in what many “theorists” have been saying, companies can develop deeper relationships with individuals.  Relationships that strengthen the brand and the bond between the customer and the brand.

Individual Needs and Choice

In a similar vein to the concept of engaging people on their terms when it comes to cultural aspect, I’d say the same could be said for engaging people as individuals.  This partially asks people to give up their individuality…something many may not be willing to do.

Here’s where it could work:

Corporate sponsored communities.

In the mid-1990’s I ran something called the M2 Users Association.  M2 was a broadcast quality video format put out by Panasonic.  It came out around the same time Sony released Beta.  Sony pretty much won that battle.  The problem was that TV stations, video studios, and a decent amount of individuals invested a sizable amount of money buying the M2 format.  Their concern was met with Panasonic’s commitment to maintain solid relations with these customers, even when Panasonic and the members knew that M2 would soon have to be phased out.  The association strengthened this mutual commitment and respect.  Without the association, it is likely Panasonic would have abandoned M2 quicker.

But the point here is that the association was corporate sponsored and the members has a previous relationship with the corporation and a direct interest in maintaining its continued support.  That interest was based upon significant financial concerns, not just collaborative preference.  And note…this was a technological product.

Communites already empowered by backing from some other source.

The M2 Users Association falls into this category, but more importantly, so do trade associations.  These organizations are already in existance and specifically designed to represent their members needs.  The members pay fees to the organization, satisfying the queston of payment.  And trade associations are staffed by professionals who understand the dynamics of the industry they represent and they also understand how to think in a collaboratvie manner for their members.

Communities where the level of internal competition is less than the need for the product/service.

Larger companies can buy in bulk.  Smaller ones can’t.  Bulk costs less.  Will big want to give up this advantage?  Not a chance.  They’ll back out of the process.  Whatever the product or service is, the concept of group purchasing cannot hurt this dynamic.

Communities where the needs of the members aren’t specific to individuals.

In order for this concept to succeed, the products can’t fully customizable.  Otherwise, individual needs take over and collective bargaining ceases to exist.

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