Prosumers: The rise of the new customer

The Service Line with J. N. Halm: It’s A Joke...employing Humour at the Front Line
J.N. Halm is a columnist with the B&FT

They are from diverse backgrounds. They do things differently. They have different reasons for doing what they do. They even have different objectives. But technically, they are all from the same stock. Lots of studies have been done about these individuals. Volumes have been written about them. Many businesses are putting in serious strategies to cater for these individuals. These organisations have no choice—prepare for them or go out of business.

Welcome the new breed of customers—the prosumers!

Interestingly, the first time the word “prosumer” entered the lexicon of the English language was way back in 1980. The term was first used by American futuristic author Alvin Toffler, a man famed for likening the evolution of humankind and technology to waves of water. According to Toffler, the first wave was the Agrarian Age. The Second Wave was the Industrial Age. The Third Wave is the post-industrial Age we currently find ourselves in.

Originally, Toffler used the term “prosumer” to refer to individuals who produced some of the goods and services they would end up consuming. During the first agrarian wave, many individuals were actually prosumers, with only few people qualifying as pure consumers. More people were cooking their own meals, mending their own clothes, painting their own houses and even having their own haircuts. Most people reared their own livestock for private consumption. A family that needed milk had to milk its own cows.

As humankind made a move towards greater industrialisation, prosumerism became less prominent. Time became scarcer. People stayed longer in factories and offices producing goods. Effectively, there was not enough time for people to get involved in the production of what they were to consume. In effect, the Industrial Wave curtailed or even eliminated prosumerism.

Interestingly, advancement in technology over the past few decades means that people are getting a lot more time on their hands. The post-Industrial age (or the Information Age or the Age of the Mind) is placing the power back into the hands of consumers—and as history has shown, consumers with power to produce eventually become prosumers. This is the cause of the neo-prosumerism movement. In essence therefore, prosumerism is not a totally new phenomenon, but an old phenomenon making a comeback of sorts.

Today’s prosumers come in different categories. An August 2020 edition of Journal of Service Management contained an article that produce a good categorisation of the various types of prosumers available today. Titled “Prosumers in times of crisis: definition, archetypes and implications”, the study produced six prosumer archetypes. The study was conducted by Bodo Lang and Joya Kemper from the University of Auckland, New Zealand, Rebecca Dolan from the University of Adelaide, Australia and Gavin Northey from Griffith University in Queensland, Australia.

The first type of prosumer is the Do-It-Yourself (DIY) customer. According to Toffler, these are those individuals who choose to complete some services themselves, rather than paying someone else to perform them. The man who is arguably the greatest marketing mind of our days, Professor Philip Kotler adds that among this type of consumers are those who hunt or grow their own food, make their own clothing, and create their own amusements.

I guess I was a DIY customer during my days in the university. I preferred to wash my own items of clothes rather than give them to the errand boys who did the washing of most of us. My motivation for that behaviour, as well as the motivation of many other DIY customers, is not exactly financial. I just thought I could do a better job at washing my own clothes than any errand boy.

Evidently, although DIY customers are low maintenance because they might not come around to buy often, they will not make a business a lot of money. These are the kind of customers who should be given excellent service whenever they come in to do business. They should be treated as long-lost friends.

The second type of prosumer is the “self-service prosumer”. I like to see these customers as those for whom the self-service options of service delivery were invented. Inventions such as automated teller machines (ATMs), self-service kiosks which can be used to provide directions to customers, make reservations or even order foods as well as barcode scanners that can be used by customers to scan items they buy in supermarkets are all creations that fuel the desire of this type of prosumer.

These customer, unlike the DIY types, make a business more money since the business is able to save on personnel cost and charge for the use of the technology. These type of prosumer might not do a lot of business in-person but that in no way means the organisation should leave them alone. It is important that occasionally, the organisation reaches out to them, even if just to see how they are doing and how they are finding the experience with the organisation.

It is clear that these are customers who are comfortable with technology. Therefore, it is important that the organisation ensures that when it comes to these customers, technology will not fail. Nothing is more frustrating than to have technology fail you when you most need it. It seems it is always at the worst possible time. The disappointment of these customers with service failures could send them out of the relationship, never to return again.

The third group are the “customisers”. These customers choose to personalize and customize their own products and services. They are those customers who would buy an item of clothing, go home and then take the item apart and re-design or do alterations on the clothes to suit their individual tastes. These the customers who will buy an item of a certain colour, take the item home and re-dye or paint it with their choice of colour.

These types of customers are very difficult to detect. This is because they appear as normal customers who love the items they are purchasing. But inwardly, they might have reservations about the specifications of the item. It would take a front-line employee who actually listens well to unearth this customer type.

The fourth group of prosumers are the “collaborative prosumers”. These are the Robin Hoods among the prosumer movement. They would go out of their way to provide services or even products for themselves and other customers for free. They see themselves as helping society. In terms of business success and profitability, these type of customers are a business’ worst nightmare. They would easily send a business out of business by offering the business’ products or services for free. Many experts believe that the collaborative prosumer is the purest type of prosumer because the one’s actions are not motivated by any self-interest.

According the study by Lang and his colleagues, the fifth type of prosumer is the “monetized prosumer”. These are closely related to the “collaborative prosumer” with the significant difference being that their efforts are actually commercialised by organisations. More often than not, they do not receive any financial reward for their work. Any individual who gets to post free information on social media sites that attracts large viewership but does not get anything in return is in this class of prosumers. The social media site makes money off the viewership of that material and does not have to pay for the content.

The sixth type of prosumer is the “economic prosumer”. This group produce services (or products) and sell them to others for money. Typical examples are part-time Uber drivers, Airbnb hosts and guests as well as online fitness instructors. These individuals create value for customers while still enjoying the same service they are providing. This group includes those individuals, families or organisations who produce and consume their own electricity and even distribute their excess energy to other users. A growing number of prosumers are in this group.

It is clear from the preceding categorisations that many of today’s customers are not the typical customers of the past. All these different types of prosumers have one thing in common—a willingness not to sit on the side lines when it comes to service delivery. They want to play an active role in the service they are enjoying.

Prosumerism is the buffet equivalent of the service experience. Customers of today are so empowered in terms of knowledge and of options available that they are not satisfied just sitting on the fence. They want to be part of the value-creation process. They want to get their hands dirty, literally and metaphorically. Smart businesses know this and so are taking advantage of this growing trend.

Smart businesses know for a fact that things have changed—and changed for good. These businesses are therefore coming out with their own unique ways of ensuring that customers feel a part of the process. The first step to taking advantage of prosumerism is to ensure that a business is able to segment its customers base into two broad categories—prosumers and pure consumers. The next step would be to further segment the prosumer group into further sub-categories, preferably along the lines used by Lang and his colleagues. With a clear idea of where each customer or group of customers fall, it would be easier for the organisation to handle each group the way it prefers to be handled.

The days when the one-size-fits-all approach worked for customers is far gone. Because today’s customer is more than a customer. Prosumers are taking over and they do not look like they would be going away any time soon. From all indications, they might even become more powerful as the knowledge and options available to them increases. That is a reality many businesses must find a way of dealing with.

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