Confidence as a business model

Confidence is probably one of the top ten terms of corporate communications. Appears confidence in the values, objectives, in campaigns in the portfolio of products and services, manuals and customer service in the plans of loyalty.

But confidence, like respect or moral authority, is something that we must win, and we can not win in other ways other than offering it and demonstration first. As simple and as complicated as well.
In traditional business models (which remain in force today, except very few exceptions), who hoped the trust and loyalty of its customers requires first a series of conditions. In return we ask that before we buy, or who subscribe, or give us your information. The customer pays first and then trusts. And so things have worked for so long that it does not seem logical to consider that another possible scenario.
Another scenario is possible. Another business model is possible. Another value chain, or chain of trust, is possible.

In customer confidence and content on the Web 2.0 we talked about blogs, social networks, communities circulars and consumer behaviour. Things are changing. We can be proactive or reactive, but things will change alike, the difference will be the consequences.

In late September 2007 someone dared to take a decisive step in this chain of Confidence. Someone who had something to sell what made the sale without a predetermined price. There was a promo, was not a claim was not misleading advertising. There was no trap in the proposal. And that someone was not an either someone in their sector. It was not a newcomer with nothing to lose, or a little with that risk. This is a sector turnover multimillionaire: music. This is one of the greats of the current music: Radiohead. With the launch of his album In Rainbows, Radiohead said: Pay what you want. Since the Web Radiohead could download the disc leaving the free will of the buyer to pay the price, and that price could well be “0″. The downloads were multitudinarian and this is the best of all, the average price of what the sailors decided to pay for downloading on the disc were about 10 dollars. There were people who did not pay anything (very little), and others decided to pay what they felt that the product worth, or what they could afford. The initiative is a pioneer of Radiohead, daring, and is not alone.

In the restaurant sector there are some similar cases. The restaurant Deewan der Wien in Vienna, offers several daily menus in which the price of the drink is fixed, but by lunch customers can pay what they deem worth the menu. In Melbourne, the restaurant Lentil As Anything also offers this possibility, as well as the One World Cafe in Salt Lake City or Denver Coffee Same; latter also lets you choose the size of the portions you want to consume. Some of these restaurants is the case of Lentil As Anything Australian, has a clear vocation altruistic and explained that with this initiative, customers who choose to pay more may make it possible for those who can not afford to eat. In any case, none of them has closed its doors because the business has been crashed because the customers eat and do not pay, or pay so little that they can not cover costs and survive. That has not happened.

Following in the footsteps of Radiohead, Last fm, which was bought last year by CBS, announced in the U.S. and allowing UK, since late January, listen up to three times a song for free to users. So you can really assess whether he likes and wants to buy it. This is good news. Large companies already take into account that many problems are solved industry relying on users, not chasing.

Showing this cases, we just intend to reflect critically on the axioms of Business Models, on how these models are changing. We talk about supply markets, markets demand, pricing policies aimed at market, pricing policies aimed at costs, we talk, ultimately, how they built this abstract concept we call price. A price that become real in the consideration, measurable in legal tender, that someone must pay for access to the consumption of a product or use a service. Prices have a crucial impact on business plans and profit and loss account, resulting in box end, profits or losses. Prices are the thermometer that helps us to know how the consumer perceives the relationship between what we have to give and what they will get in return.

Thinking about price, service, trust, ultimately, on providing value, leads us to raise the role that companies, each according to their models and dynamic sector, playing in the value chain that will from production to delivery to basic consumer product or service produced. So far the consumer, the end customer, pays for everything. At each link in the chain the final price increases, but the value it does not necessarily.

Retailers, brokers, agglutination, facilitators… how are those roles when someone decides to break the rule, applying transparency, giving a voice to final customers by putting their hands in assessing what they will receive.

We could summarize it by saying: if you come to contribute something, tell me what they gave me and I value it, if I can stay interested in the chain, if not, there is no place for you.
The confidence is gained by opening doors and windows, do not earn hiding cryptic methodologies in black boxes that can not be opened. The trust is not won with speeches that prevent see what lies behind and, often, what they really contain is pure intermediation margins by adding artificial about the work of others. The customer appreciates the job, the customer knows appreciate the quality and profit. After all, we are all customers and none of us wants to pay more without knowing why and without knowing to whom.