-1.svg "Close Icon (3)-1")
.svg "Close Icon (3)")
- Share
-
If your organisation attracts customers via advertising, PR and other marcomms and plans to do so for the foreseeable future, then it’s time to embrace the possibility that technology is already shifting the way individuals and brands interact. And in the new world, reputation is the currency that counts.
Earlier this month, BlueChip attended this year’s annual Amplify Festival, which canvassed the challenges and opportunities of staying relevant in a changing world. Hosted by AMP, it featured a program of international speakers: entrepreneurs, researchers, trendspotters, academics and authors.
One of those speakers was expert in network technologies, Rachel Botsman. She asked the audience to imagine a world in which high street banks have been replaced by peer-to-peer lending platforms like Zopa or Lendo, where our credit rating is no longer determined by our timely (or not!) bill paying history but by how we’re regarded by our peers in social media, and where we choose our financial planner based on his or her online reputation. In short, a world in which power has shifted from institutions to individuals – and which Botsman predicts will start to become reality within five years.
In this new world, the way businesses and the services they provide are valued will change. Ms Botsman cites airbnb, Lyft and DogVacay as live examples of the value of verified ID (you are who you purport to be), peer ratings (what others say about you) and affiliation, or personal profile (what you say about yourself). These businesses are booming, with Lyft, an on-demand ride-sharing service based on a two-way driver and passenger rating system, receiving $60m in venture capital funding from Andreessen Horowitz less than a year after launch. It’s a clear demonstration of the intersection between innovation, technology and offline services which is transforming our lives one entrepreneur at a time.
So what can the financial services industry learn from these experimental innovators and the emerging marketplaces they’re creating?
First, understand that online reputation is not about digital influence, such as that measured by Klout or how many people are talking about your brand on Facebook. Reputation, our speaker tells us, is a measure of trust. Ephemeral, intangible, but incredibly powerful because, Botsman says, “we are neurologically wired to respond to reputation.”
Institutions are no longer trusted because they’ve lost their human attributes, she says. As a consequence, we will see a move away from the old model of building a relationship with a customer through above or below the line marketing and sales toward new, more two-way online reputation assessment that relies on trust that’s been steadily built between individuals.
Second, financial services organisations can begin to value the ratings customers give them more highly. Airbnb is a prime example of a service whose reviews can make the difference between a profitable home business (literally!) and not being able to make the mortgage re-payments because poor ratings has scuppered future bookings.
On the plus side, once positive reputation is built in one community, it can be used in other sectors, with very tangible results. As Botsman showed, it’s already possible to disrupt established processes, for example, using an outstanding collection of online peer reviews to apply for a rental property when your credit rating is nil after emigrating. The digital world thus has the ability to transcend international borders and so provide access to credit and debt for people who’ve previously been denied it.
Botsman likens this new way of doing business to the village communities of yesteryear, where the views held by your neighbours, acquaintances and customers, usually based on personal experience or word of mouth, would determine the success of your business.
As a final note though, she cautions that because the model has changed and marketplaces are springing up where none existed previously, we need to change the way success is defined and measured. And my money’s on the entrepreneur that can establish new metrics which put a dollar value on online reputation.
Illustration: @CJDelling created the fabulous visual summary of Botsman’s insightful session above.
