by: Chris Lawer
In 2002, General Motors launched a trusted advisor internet site called AutoChoiceAdvisor. It helps customers to select the motor vehicles best suited to their personal needs. The advisor asks prospective buyers several questions (for example, what vehicle manufacturers they prefer, what they have to spend, what features are most important and how they plan to use the vehicle) and then provides the customer with a list of recommendations. Critically, this list includes vehicles from manufacturers other than GM. The benefit of this service to customers is that GM is now acting as an advocate, facilitating the customer’s needs and providing impartial advice and information to help the customer make a more informed choice. The benefit to GM is that the service captures valuable knowledge about customer preferences and trends, knowledge that can be deployed in product development and innovation. It also boosts its brand values along strong trust and transparency dimensions. (This example was found in Winter 2004 MIT Sloan Management Review article by Glen Urban, "The Emerging Era of Customer Advocacy")
Citibank is another organisation experimenting with reverse market strategies. It now provides a free online financial account aggregation service through its Myciti.com web portal. The site provides a full range of Citigroup consumer products and services, including credit and charge cards, banking services, investments, mortgages, loans and insurance. It also allows its customers to access e-mail from a variety of service providers, frequent-flier accounts, and information from major content sites. By enabling customers to access a consolidated view of all their online passwords and financial and loyalty accounts regardless of supplier, Citibank is creating powerful new opportunities for customer differentiation and service in a highly competitive, consolidating and commoditised market. Despite privacy concerns some customers have about the service, the MyCiti site attracted more than 300,000 users in its first year of operation and adds some 3,000 new users a day. But the Myciti.com portal does not stop at aggregation. The service also provides financial planning support linked to key customer life stages or events such as becoming a student, getting married, starting a family, buying a home and planning for retirement. Although this help is presently restricted to the financial aspects of these events, Citibank has the potential to develop its reverse market orientation by orchestrating multiple networks of suppliers and sellers, each defined by a specific life event or customer problem scenario.
U.S. auto insurer Progressive has a long tradition of customer-oriented innovation. One well-received initiative is its recent move to offer a reverse market price comparison service on its web site. Previously, U.S. customers’ ability to compare rates across insurance companies was both time-consuming and complex. Now, by entering their personal information, driving history, vehicle details and other data on the Progressive web site, the company enables its customers to undertake a simple and direct market comparison. Although it sometimes loses out to its lower-priced competitors, Progressive’s customers often remain loyal simply because the service reinforces their trust in the business, underwritten by its corporate brand values of openness, transparency and maverick change, aimed at constantly finding ways to do things better, faster and cheaper for its 12 million customers.
The GM, Progressive and Citibank examples illustrate how early-stage reverse market strategies are beginning to unlock different forms of customer value. They all understand that there are mutual benefits to be realised by improving on their customer’s time, attention, knowledge and access to markets whilst providing new forms of positive personal context and brand relationship.