The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism

Citation

Wolfe, D.B. (2004), "The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism", Journal of Consumer Marketing, Vol. 21 No. 1, pp. 77-78. https://doi.org/10.1108/07363760410514049

How often do you find yourself pressing a point that you know to the core of your being is right, only to be frustrated because someone you’re trying to persuade “doesn’t get it”?

Imagine you are walking down the street 450 years ago when a friend runs up to you and shouts in your face, “The earth is not flat! It’s round, like a ball. Not only that, it turns around the sun!” You tell your friend to go home and sleep it off because you know that from the highest hill or mountain top the panoramic view shows no sign of the earth being round like a ball, and you know from first‐hand observation that, every day the sun shines, it rises in the east and sets in the west in its daily journey around the earth.

Would you believe that some people schooled in societies like our own still believe the earth is flat? To see for yourself, type in “Flat Earth society” at Google. Those who believe the earth is flat do so because they need to believe so. After all, belief follows need.

We believe what we need to believe to have guidance in our pursuit of a sense of personal validity, safety and comfort. Once such a set of beliefs is in place, challenges to them are usually met with fight or flight responses. We argue in defense of our beliefs or flee from notions that contradict them. We are prone to denying ideas that contradict our beliefs any landing rights in our minds.

Gaining landing sites in readers’ minds was a major challenge confronting Shoshana Zuboff and her husband, former Volvo CEO James Maxmin, in writing The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism. Some reviews of the book clearly indicate that these reviewers just do not get what Zuboff and Maxmin are saying.

Zuboff and Maxmin draw extensively on two centuries of history to show how capitalism is an evolutionary artifact of human thought shaped less by companies than by the changing character of consumer needs. Like illusions of a flat earth, it is an illusion that commerce is shaped as much by companies as generally believed, according to The Support Economy’s authors. They also argue that from the beginnings of capitalist enterprise, women – not men – have done most by far to shape the consumer economy, pointing out that most consumer products in the early days of capitalistic enterprise were artifacts that women had made for their households and families.

Much like Copernicus’s repositioning of the earth from the center of the universe around which celestial bodies revolve, Zuboff and Maxim conceptually displace corporations from the center of the capitalistic universe, putting consumers at the center. “That is not original”, you might say, adding, “Isn’t that what all the current‐day talk about customer centricity is about?”

The truth is that despite the now ubiquitous invocation of the term customer centric, no Fortune 500 company fully qualifies as authentically customer centric as Zuboff and Maxmin see it. A few are moving toward full customer centricity, but all operate in varying degrees with the inner‐directed focus dictated by traditional enterprise logic. Selling products takes precedence over an outer‐directed focus to serve consumers under the rubric that by making customers the center of attention, maximum wealth creation on behalf of shareholders is not possible.

Beyond their detailed case against Corporate America for shameless fraudulent claims of customer centricity, Zuboff and Maxmin indict current trendy schools of marketing thought, including relationship marketing, one‐to‐one marketing, permission marketing, experiential marketing and especially customer relationship management (CRM) marketing for the same transgressions.

Only readers who grant the ideas of Zuboff and Maxmin landing rights in their minds will fully grasp what the authors mean by the centrality of customers in capitalistic enterprise. That does not mean sanctioning every idea they offer. It means being willing to let Zuboff and Maxmin’s ideas freely compete with one’s own current beliefs.

The Support Economy is not the easiest of reads for several reasons, none of which should deter anyone interested in learning why so much is broken in business, from moral trust in the corporate community to the growing dehumanization of the customer experience.

The foremost reason why The Support Economy is a difficult read is that it represents a new and generally unfamiliar consciousness, as Albert Einstein might have put it. He famously said, “A problem cannot be solved in the same consciousness that produced it”. Despite that wisdom, and as Zuboff and Maxmin observe, when faced by deep‐seated problems that threaten their well being, nearly all companies fall back on doing more of what they have always done, only with greater fervor. Thus, anyone believing that old ways that are held sacred in traditional enterprise logic will solve today’s bigger challenges will have a hard time “getting” The Support Economy.

The book will also tax some readers’ attentions because of its thoroughness of detail. Zuboff and Maxmin apparently believed that widespread acceptance of their ideas depended on a level of historical detail that has rarely been seen in a trade business book. Yet, without such detailing, the book would be more subject to claims of defective logic.

Zuboff and Maxmin artfully plot the evolutionary parallel paths of the supply side and the demand side in capitalistic economies, from the days of proprietary capitalism, which ended in the 1920s when GM’s Alfred Sloan pioneered managed capitalism to usher in the modern corporation. Postmodern corporations that do well will function by the enterprise logic of distributed capitalism. They will, by operating with a focus on helping customers process their lives in their journey towards self‐realization, or as Maslow would say, self‐actualization, or as Zuboff and Maxmin say, psychological self‐determination.

Commerce is decreasingly about products, the central focus under traditional enterprise logic, and increasingly about the customer experience. Anyone up on goings‐on in the world of commerce knows this is a new wrinkle in enterprise logic, but few yet realize that it is not possible to support the deeper needs of customers that add up to competitively distinctive superior customer experiences. It takes a different consciousness than we are generally accustomed to engaging in the business world to understand how we can turn the marketing of products, from toothpaste and laundry detergents to cars and apparel, into sources of support for consumers needs. But that is what The Support Economy is about.

And here is why The Support Economy deserves the attention of everyone working in the consumer economy: For the first time in history most adults are aged 40 and older – in the years when self‐actualization needs play a larger role in lifestyle choices and buying behavior. This New Customer Majority is not marginally the majority, but hugely the majority – 124 million people to 85 million people between the ages of 18 and 39. It will grow by 16 million in this decade while adults under age 40 will increase by only a tad over 1.5 million consumers.

Translating the demographic advantages of older markets into monetary terms, spending in 2010 by people 45 and older will be $2.6 trillion to $1.6 trillion spent by all adults under the age of 45 – a full $1 trillion advantage.

Thus to grow in this decade and the next, most consumer product companies must devote greater attention and dollars to older consumers. However, the companies that profit most from this redirection of attention and resources will be familiar with self‐actualization needs and strive to help customers meet those deeper needs. They will be a source of customer experiences that build customer loyalty. Forget “share of wallet”, that morally – and strategically defective product centric mantra of today’s IN schools of marketing thought. It is about share of heart.