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When Information Is King, Consumers Gain Leverage

 

September 3, 1999
By atnewyork Staff: More stories by this author:

of dealers, provide minimal warrantees and support, and turn around two years later and try to resell a new product into the same market.

But product-based companies have begun to understand that in the Internet age they will have to behave more like service companies -- pursuing ongoing relationships with consumers. These companies love the notion that they will be able to more efficiently develop products and track the buying decisions of consumers. But with this new consumer ability comes a new kind of consumer empowerment in which information is the currency. This had been particularly true in the auto industry where information about manufacturing practices, dealer costs, and the like, spread through the Net like a flash flood to such great effect that today, when a buyer approaches a car dealership, that buyer is armed with so much information that price negotiations begin at dealer cost and work their way up, instead of beginning with manufacturer's suggested retail price and working their way down.

And how companies react to this changing environment will make all the difference in the world. Those that embrace openness will successfully make the leap to cyberspace; those who try to replicate the old models of customer relationships are doomed to failure.

Now, does that mean Ford should be expected to publish its internal memoranda online? Of course not. But sharing information -- information companies have historically held closely -- is a key component of the new customer relationship. When I think about corporate Web ventures and their relationship with consumers I think about Sony's BobDylan.Com. While other record companies wring their hands over protecting intellectual property and linking to fan sites, Sony has made it a practice to regularly upload full-length audio files of previously unreleased live performances by Dylan on BobDylan.Com. Sony maintains a searchable database of all of Dylan's published lyrics on the site -- intellectual property Dylan's publishing company could have decided to hold close and sell in a book format. And the site prominently links to the best fan sites -- something record companies have historically avoided doing. In essence Sony has replicated some of the best features of the best fan sites and brought them into the fold, not fretting about the loss from the intellectual property they're giving away but instead working to use information to engender fan goodwill.

Ford may well be within its rights to stop Lane from publishing. The courts will decide. But at what cost to its relationship with Internet fan sites? Already FordNews.Com, a fan-published resource site for dealers and enthusiasts alike, has decided to suspend publication during the BlueOvalNews.Com/Ford dispute. According to a note posted on the site by publisher Steve Blake, FordNews.Com has become the rope in a tug-of-war between Lane and Ford. "I now have veered away from my primary goals and have found myself hating the job I am doing, versus loving the fact that I had the ability to share with others the news about what I consider to still be the No. 1 auto manufacturer in the world," Blake wrote.

Now that's just the attitude you want to foster in customers so devoted to your products that they launch entire Web ventures supporting them.

* Jason Chervokas (jchervokas@internet.com) is founder and co-managing editor of @NY. He does not drive a Ford.






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