Why we’re turning B2C on its head
Humans exhibiting herd behavior is a well researched and documented phenomenon. This idea even made it to some religions, where the deity is being portrayed as the shepherd and the followers / believers as the sheep. This depiction is even more current in today’s world, albeit the role of the deity has been recast…
The shepherds are the big tech B2C companies of our time. They all started out with a promising and revolutionary product that put the desires of the consumer front and center. The sheep flocked to these new shepherds because they could lead them to the greenest pastures where they frolicked with their newfound community of similar sheep. All was well in sheep world until the shepherds realized that they needed to generate some revenue if they wanted to become the most powerful shepherd. Up until then, the shepherds were mainly driven by their strong belief that they could make the sheep happier, and that was all that mattered. But even good hearted shepherds aren’t immune to the desire for power. The sheep believed the initial promises about being able to live in a welcoming community, unaware of the strategy shift the shepherds were planning.
As the sheep kept feasting on the grass that was provided to them by the shepherds, their fleece kept growing and growing. The ingenious shepherds quickly realized that they could shear the sheep and sell the wool to the highest bidder. In the beginning the sheep weren’t even fully aware that their wool was being used, some might have even welcomed it, thinking it was all in their interest. But as the shepherds got greedier and greedier the shearing got out of hand quickly. Soon the sheep felt exposed and violated in their privacy. To make matters worse, salesmen started showing up with carriages filled with wool sweaters. The shepherds noticed that after the excessive shearing the sheep felt cold, so they called their knitting friends and let them advertise their sweaters for a small fee to the now freezing sheep population.
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Although a fictional scenario, it does resemble the current batch of B2C companies. Their business model is inherently flawed when you think about it from a consumer’s perspective but also from the view of a business partner. Let’s unwrap this in two steps:
Firstly, let’s look at it from a consumer’s point of view. Consumers are slowly but surely coming around to the fact that their data is not just being used to enhance the user experience but is also sold to other companies / used for targeted advertisements. This is leading to a shift in consumer perception, whereas before everything that was shown on the platform was being considered as “genuine” and “real” to some extent, has now to be looked at through a more skeptical lens. Distinguishing a genuine post from a “sponsored” one is not as trivial as it sounds. And even if they are clearly labeled as such, they still dilute the consumer experience by bombarding the users with content and ads they did not sign up for.
Secondly, it’s also not ideal if you’re a business partner. You’re paying for your ads to be seen by people who fit certain parameters. These may range from rather broad like age and gender, all the way down to actually finding the ideal customer through third-party data providers that specifically cross-reference consumer’s behavior with other data sources (i.e. credit card data, loyalty card points, etc.). As a business partner you will still end up paying for ads that do not convert into a successful transaction, even with all the necessary filters in place.
Another danger that is faced by advertisers when they use targeted ads is “persuasion knowledge”. Professor Carlson, who is a marketing professor at Georgetown University, summarizes persuasion knowledge as such:
Consumers are accustomed to persuasion because they use and experience the same tactics in their everyday life. They have to persuade their friend that getting another drink might (not) be the best idea, where not judging you for having a few tipples. Or they might be persuaded by their cousin that they really do have to experience this experimental fringe play, think off-off-West End / off-off-Broadway type, about how to avoid accidents while using cutlery (a real play by the way).
Consumers are well versed in both the act of persuading and being persuaded and for this reason highly targeted ads mostly backfire. Once a consumer just catches the slightest sniff of persuasion it’s over. Skepticism will kick in and the experience could even soil the brand perception. Consumers are savvier than ever and are well aware that they leave traces online. But they still don’t want it thrown in their faces.
That’s why we’re turning the prevalent business model on its head. We’re giving the power back to the user, to be more than just one of many sheep but actually themselves. Our users will never encounter any advertisement because we believe in the power of our recommendation engine. On top of that, our recommendation engine is not powered by the “all you can eat data buffet” that other big players have accumulated. We give you the best recommendations based on what you are willing to share with us. On top of that, we pride ourselves on not just considering every user as one sheep out of the whole flock but as the actual person they are. This is one of the many reasons why we decided to implement the “eezy pets” into our user experience (stay tuned for a more detailed post on the pets).
You might think this is all nice and well but how do we actually generate revenue? Selling ads or data isn’t the only way to turn an idea into a viable business, although it might seem like that these days.
As just mentioned, we really pride ourselves on our recommendation engine and we put our money where our mouth is. We decided to pursue a purely transaction based business model. This means we receive a fee from our business partners only when our users actually decide to follow our recommendations. So in a nutshell, we are only as good as our recommendations are. This creates a positively reinforcing spiral. In order to be successful we need to make sure our recommendations perfectly match our users and perfectly matching recommendations keep our users happy while also creating higher quality leads for our business partners.
This is what we’re all about here at eezy, making everyone’s life easier in a world of constantly increasing complexity
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Watch this space as we take you through our startup journey and share some more insights.
