Tuesday, November 5, 2013

Why “If you’re not paying, then you’re product” is only part of the truth.

We’ve all heard the phrase that “If you’re not paying, then you’re product”.  

Most people understand what this means when it comes to free services like Facebook, or Gmail.  In those circumstances, you’re not the customer as the real customer is the advertiser who is paying your service provider to have access to your time, eyeballs and attention.

Some companies allow you to upgrade your service by paying them a fee.  At this point you might feel like your service provider is now beholden to you, not the advertisers.  This may be true in a small minority of cases, but largely what happens here is your adverts disappear and the service provider switches from pandering to it’s customers (the advertisers) to pandering to it’s stockholders, who may - or may not - have interests that align with your interests.  This means that even if you are paying for a service, there’s something in the small print that says what you are now paying for might still be changed or removed and there’s not a lot you can do about this.  On top of that, your anonymized data is still probably being sold.

I first saw this interest clash in banking.  As a teen, I learned the hard way that you don’t ask the bank to alter your existing accounts to take advantage of new features.  If you need a new feature or service, you open a new account.  That way, the bank can’t use it’s “one-way” migration practices where if you change your account and decide you want it back how you had it, the bank will claim that it can’t be done (remember that as a paying customer, you’re still playing second fiddle to the stockholders).  This also means your older account continues to “grandfather” with privileges that new accounts no longer have, and you can move your funds back into it at any time you want.

But times are changing.

Until recently, you were either a customer or supplier.  In rare cases, you might be both, and when that happened, both parties were normally very aware of this.  Your local bank manager knew you, and knew that you had an account with them, and the bank used your services (let’s say it’s window cleaning).  They also knew that some of their customers might also be your customers, too.  Everything was clear cut and everyone understood this.

Where we are at right now is a different scenario where the common supplier (Bank, Telco, etc) thinks that they have a grip on their customers whilst trying to satisfy their stockholders, but has also totally disengaged from them.  You phone them up and you have speak to someone in India.  If you want to use their service, you don’t visit them - instead you go to a website run out of the other side of the country.  If you apply some common sense to this, you quickly realize that other than “big picture” analytics, they’re losing touch with the reality of modern B2C commerce.

And this “blindness” is being compounded by technological changes.

One of the biggest things I learned this year, around this ethos, very much applies to Bell Canada, who now enjoys a much reduced role in my household.  After the public three-way debacle between them, myself and Yellow Pages Canada, I took what I learned about public protesting, technology and social media, and I realized I also had things slightly wrong.

I was viewing myself as a customer of Bell’s who plays second fiddle to their stockholders.  The result of this was I almost solely used social media to get my message out to other customers - the logic being “Bell is bigger than me, so I need to bulk up with more people” in order to win.  Whilst I lost the first battle with Bell, I did ultimately win the war because Yellow Pages Canada had no intention of standing alongside Bell Canada at the Privacy Commission and undid everything Bell was resolving to have as the status quo.  Everything that was a problem got “magically” fixed.  The entire debacle cost me $12 in advertising, though it cost Bell and YPG Canada a lot more.  

Now, as an iPhone programmer, I have my own personal customers from the things I do in my spare time.  They have iPhones and some of them run on Bell.  So, we’re back to the “My customer is your customer” scenario, just like previously at the banks.  

Unlike the bank situation where everyone is well aware of where they stand, this is not the case any longer.  Further, the telcos have been commoditized to the point that not only are they unaware that customers have access to other customers, they’re also being used as the conduit to enable me to get to their customers, at which point I can display whatever messages I want with no financial gain to themselves.  As another phrase goes:  "The customer is always right until the customer stop paying".

So lets return to the original statement of “If you’re not paying, then you’re product”…Bell’s customers are paying Bell and myself making some of them my customers too.  Bell is giving me access to their customers at no charge.  Does that make me the product of Bell?  

It doesn’t appear so.  

However, the stockholders would probably be somewhat befuddled by what exactly would be going on here because they’d be in the position of being used as enablers for something external to them that they probably don’t want to happen regardless, yet they're the conduit for something that they can't charge for, whilst I can now raise my point much easier than before.  

So to conclude:

This phrase is wrong.
“If you’re not paying, then you’re product”…

A more correct phrase should be.

“If you’re not being paid for what you do, you’re not in control - someone else is.”