by Samantha Paxson

A crash course in understanding the relationship economy

Dec 20, 2017
EnterpriseIT LeadershipIT Strategy

The relationship economy is all about building trust by deeply understanding your customer and delivering exactly what they want, when they want it. These four must-read books can help you adapt to this landscape.

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The business world has shifted over recent decades from the consumer economy (where price and savings drive customer decisions) to the relationship economy (where customer service and brand loyalty drive customer decisions). In addition, between smartphones, smart appliances, Bluetooth and data networks, daily life is becoming more integrated with each passing day. That means the volume of data feeding into relationship economy decisions — via reviews, social media, AI-driven recommendations and more — is increasing.

Despite this revolution in the business-customer relationship, many businesses are still somewhat far behind. That’s not too surprising. It’s easy to say “I’ll learn about that later” — and then find the idea of catching up to be daunting. Unfortunately, the relationship economy is going to push further and further down the technology continuum. That means that the time to catch up is now, not later.

It’s all about building trust by deeply understanding your customer and delivering exactly what they want, when they want it. The good news is a lot of material exists to get the most out of this new engagement paradigm. Here are four excellent books that can help you adapt to today’s relationship economy landscape:

The Power of Moments: Why Certain Experiences Have Extraordinary Impact — Chip and Dan Heath

The key to the relationship economy is about building brand loyalty through moments. Most people think of moments from a family perspective, but everything is an individual moment. In business, these little things matter, whether that’s getting good customer service, enjoying the product service with friends/family or simply having a good experience related to the company. Chip Heath, a professor at Stanford’s Graduate School of Business, and Dan Heath, senior fellow at Duke University’s CASE Center, explore why certain brief experiences can jolt us, elevate us and change us — and how we can learn to create such extraordinary moments in our life and work. Once you understand the importance of moments, it’s simple to apply it to business.

The Element: How Finding Your Passion Changes Everything — Sir Ken Robinson

For businesses struggling to break out of the mold of the consumer economy, this book distills the idea of approaching, well, anything into finding the Element: the “point at which natural talent meets personal passion.” The consumer economy focused on dollars and cents. The relationship economy is about connection, and that means that marketers have to hit their stride with their Element. Creativity, teamwork, hard work and a willingness to adapt to new things are all ways to succeed once you figure out what your Element is — and then you can use that to drive your relationship economy initiatives.

Originals: How Non-Conformists Move the World — Adam Grant

The consumer economy required a certain level of conformity. Discounts, coupons, sales — calculating the bottom dollar meant repeatable processes based around price. The relationship economy focuses on connection, and many times, the best ways to establish connections are through unique and inspiring initiatives. In this book, Adam Grant argues that being a nonconformist drives innovation. They observe successes and failures, then test different possibilities until a breakthrough coalesces. With so many different avenues to attempt with the relationship economy, this balance of daring and observant is a winning technique for connecting with customers.

Outliers — Malcolm Gladwell

Gladwell’s book is the Yang to Grant’s Yin. While Grant talks about strategic procrastination while observing, Gladwell also champions the idea of ability as a product of experience. “It is not the brightest who succeed,” Gladwell writes. “Nor is success simply the sum of the decisions and efforts we make on our own behalf. It is, rather, a gift. Outliers are those who have been given opportunities — and who have had the strength and presence of mind to seize them.” This is perhaps one of the best parts of the relationship economy: the fact that there aren’t rules, just guidelines. Relationships can be built across many different avenues through many different paths. The importance of understanding the opportunities in front of you — and the value of seizing on them — will allow you to capitalize on the relationship economy in countless ways.

You may be surprised that the four books mentioned here aren’t marketing or technology books. But that’s the trick with the relationship economy: it’s not necessarily about marketing in the traditional sense. For those that truly thrive in the relationship economy, the spotlight is on connections: how to make them and how to make them stronger. As engagement pushes forward throughout an interconnected world, the same things that build healthy relationships in your personal life translate into the business world – and thus, sometimes the best books for business aren’t the ones necessarily about business, but about our humanity and its intersection with the digital world.