Along with the countless innovations in consumer products and services, there has been a steady growth in the market for information about those products and services, including the companies that provide them. This is significant, since consumers now have access to markets literally all over the globe. Consumers also have a different information problem than they did when most markets were local, or at least within range of a merchant’s local reputation. Impersonal transactions are now the norm, rather than the exception.
In today’s markets, finding a source for a product is less of a problem than is knowing whether the product is worthwhile, or whether the company selling it is reliable. Product labels and warranties provide information about what’s “in the box,” but consumers have had to undertake a search through each product or company site to discover it. To bridge this gap, organizations like the Better Business Bureau track the market reputation of firms, usually by collecting reports of problems their clients have experienced. Consumer Reports and similar consumer guides, rate the performance and value of products, offered by subscription in hard copy or on the Web, using lab trials as well as consumer experiences to gather their data. Government agencies like the Consumer Product Safety Commission, have also been around for a long time. Despite these consumer tools, for many buyers, trial and error has been their primary source of information.
But that’s changing, thanks to the next generation of tools in the market for gathering information. There is little that goes on in markets that offer products or services that doesn’t show up on the World Wide Web. These include electronic bulletin boards and e-groups, both of which allow consumers to communicate with each other on topics and products of mutual interest/satisfaction/dissatisfaction. Information entrepreneurs have also constructed electronic “classifieds” for numerous local communities. Consumer comments can be added to enhance the quality of the information for other potential consumers. But do businesses care what the comments contain?
They do now. A new Internet site based in North Carolina is the first of its kind to offer live reciprocal information and feedback between consumers and firms. The owners invite firms to help sponsor the site (otherwise free) through their “Consumers for Feedback Campaign.” Firms that choose to accept feedback are featured on the site, where consumers can read the public exchanges and find out how responsive the firm is to its customer concerns. Firms that opt not to accept feedback can be labeled as such, so there are considerable incentives for companies to be consumer-friendly, even when disputes are not resolved in favor of a client. This site, like many of the older Web-based reporting pages, allows visitors to chat with each other or blog on relevant topics. There are mechanisms in place designed to prevent firms from submitting comments in the guise of consumers, and disclaimers by the site owners concerning false information deliberately entered on its pages.
The advantages of this give-and-take information are enormous for consumers. In addition, they insert a self-regulating element into customer-firm relations that is governed by market reputation. That reputation can be communicated to the rest of the market instantaneously, moreover, so consumers are less likely than ever to wind up ‘in the dark’ about a firm’s performance history, quality, and willingness to work with its customers. All good developments.
These recent innovations in information markets illustrate what marketing types and advertisers have long known—information is a necessary and complementary product in the promotion of sales and revenue. Now, it is becoming a necessary component in customer care and satisfaction as well, a process that completes the circle of market exchange.