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Wednesday, November 11, 2009

If you love your customers, set them free.

LinkedIn and Twitter, two social media platforms I use to maintain professional networks and develop personal brand, have announced they will now have cross-platform connectivity for users. For now limited to the status update functionality, it is reasonable to assume that eventually, LinkedIn contacts and Twitter followers could be easily converted between platforms.

Both networks are immensely valuable to their users, and this development was embraced by users that now have an easier time doing business with both service platforms .

Service integration, driven by technology, is creating possibilities to improve experiences across the spectrum of B2B and B2C services. Driving this wave of innovation is the depth of engagement of the individual, enabling companies to provide better service than ever before based on an ever expanding understanding of customer needs and an equally expanding capacity to serve them. Like with the marriage of LinkedIn and Twitter, customers’ transaction costs are reduced and they become better performers of their service role.

But the new technology is also freeing. As more services are linked together, the customer becomes more portable, easier to migrate between businesses. Switching costs are reduced to the point where customers can leave as easily as they arrived.

The old mantra was to make your product or service as sticky as possible - that a customer captive to high switching costs was ideal. This notion is now challenged by the idea that the best way to keep customer is to provide more network value by linking them to as many complementary services as possible.

To the old guard of business, a scary notion. They can envision a mass exodus of customers to their age-old competitors.

Truth told, the only companies that have anything to be scared of are the ones who aren’t providing market value or better, and for the first time face the risk of their customers finding out.

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