The recession and the parlous state of government finances is leading a number of councils to consider adopting a low cost airline model and charge for access to a range of services, in a bid to drive up revenues. One of the first to do this is Barnet Council.  This has been dubbed the “EasyCouncil” business model by some national newspapers. And as the pressure mounts on the new Government to get a grip with public finances, we are likely to see an upsurge in local councils following this trend.

However, it isn’t just local councils that are introducing tiered models for service now. In fact most Corporates are increasingly looking at how they can make their least valuable customers service themselves and then make higher value customers or those who want to upgrade pay for faster access to customer service or support. This is most explicitly seen in the IVR systems that all large companies now use that drive customers through interminable walls of questions and redirects on an automated basis, to try to limit real human intervention. I see this with my own bank, Barclays, who charge me to be a Premier customer, but don’t really offer any better service. In theory I get faster access to customer service and I have a personal account manager, but the reality is that the Premier Manager only talks to me when he thinks he can flog me some more products!

There are a few exceptions amongst the bigger brands with John Lewis consistently coming out well in customer service reports. The 2009 UK customer satisfaction report also put Waitrose and M&S in the top 3 companies for best customer service.

But in general the trend in bigger companies is to make more of their customers pay for more of their overall costs in some way. Conversely while many big brands are stripping out their free service, a host of smaller companies are offering better and better service. Why does Pret a Manger continue to be voted so positively for its customer service? It has built it into its culture and its business model. Companies like ASOS and net-a-porter get voted so positively because they provide a high value product combined with great customer service.

The web is also seeing the increasing rise of companies that give power back to the consumer and in turn make the company do some of the work and offer a good service. This true of a start-up like Aroxo, which allows the user to name the price that they will buy at. It’s also true of other companies like Maxbips where you can auction your savings to the highest bidder and a free concierge service from You Wish.

The recession is likely to accelerate the divergence of company behaviour with more and more large companies driving towards a tiered model, where you get a basic service for free and pay to upgrade for better service, while smaller newer companies offer better and faster and more innovative service. This will make for more interesting choices for the consumer, something the British people love. So maybe the recession will be a positive force for change in the end!

The world is agog with incredulity at how many people have started to use Twitter and how disruptive it is. Yet most of those people are more excited by the revolution in live communications and the ability to charge other ignorant souls for the pleasure of explaining what it is all about, than they are about how it might cut costs or drive sales. And so it is that the web is being dumbed down by an ever increasing fascination with soap operas and celebrities. What happened to a good old fashioned look at the role of digital in making money?

Why is it that so many companies believe that they are listening to their customers when they do market research? Most market research is such a blunt instrument that captures a static view of what customer wants, when actually that process is so dynamic.

We notice it all the time on www.youwish.com. Someone wants a particular product or service at one moment. They ask for it. A business replies. But the prospective customer then sits on their hands for a while and the business wonders what is going on. Then perhaps weeks later the customer decides to respond to the business and a transaction takes place. It is uncontrollable. It goes at “people speed” not on some predictable path.

Businesses need to find ways to engage their customers much more openly and often to see how their behaviour actually manifests what they want, rather than just what they say one day.

Co-creation is part of the answer but even that is often a rather hothoused NPD environment rather than a totally open dialogue.  The real answer is in genuinely harnessing “people power” and in letting the conversations emerge around your products and services and people’s needs. To do this, businesses need to construct a natural and value adding channel which their prospective customers can engage with. McDonalds provides a good example of how to do this with their “make up your mind” initiative, but there many many more opportunities that companies have not started leveraging. An obvious place to start is with problem solving communities that add value to the business and to the customer and which do harness People Power. More on that in due course.

Isn’t it strange that the language that people are using to describe the concept of the consumer having more control over how their information is used, is so unfriendly, namely VRM, CMR or SRM! One could be forgiven for giving up now!

But although the language is over complex, this concept is going to become very a big and exciting topic of discussion in 2009 . It may just be that a brilliant copywriter is required to turn it into every day language.

The recession should start to exacerbate the problem of acquiring and retaining customers and this is where VRM will start to play more of a role. Potentially VRM forces companies to think differently about how they engage with customers and see the opportunities from having a more honest dialogue. I have long thought that many businesses would benefit from trading more openly with their customers. For example why wouldn’t a retail bank ask me if I would be prepared to stop using personal cheques in return for some other benefit? Personal cheques are expensive to manage and very environmentally unfriendly.  I would happily trade this service for something else and most banks would give up this costly service for another that they can operate more efficiently. A win-win!

VRM may be odd language, but it can certainly unveil interesting ways for busineses and customers alike to get what they want. We look forward to many discussions of this type in 2009.