Stephanie Fierman - Marketing Observations Grown Daily

How Much Would You Pay For Stephanie Fierman’s Money?

Monday March 16th 2009, 3:09 am
Filed under: customer service,financial services,Internet,loyalty marketing,market research,web 2.0

The Web has a wonderful ability to make historically opaque businesses and transactions far more transparent and accessible.

The Internet did this for car buying years ago: between Consumer Reports, Edmonds.com, CarsDirect and a myriad of other sites, the shopper who would have previously driven to whatever dealerships happened to be local now has a lot more bargaining power… and can buy a car from anywhere in the country if the (online) price is right.

To that end, I recently commented on a TechCrunch story about a new company called DriverSide. Like RepairPal, DriverSide.com intends to help cash-strapped consumers more effectively maintain their cars instead of having to sell or replace them. My point was that these sites will only begin to reach their real potential when a user can write his/her need and have mechanics compete for the work via online bids, a la an eBay auction.

Almost right after I posted this comment, I stumbled on a unique application of this concept from the Netherlands: Spaarbod. You thought Bankrate made it easier to shop for interest rates? Spaarbod permits Dutch consumers to specify how much money they’d like to bank, for how long and on what terms, and the site (like Bankrate) returns the best rates publically available at the time. You can accept one of these offers immediately, or Spaarbod will send your request (minus your personal information) to participating banks who can then bid on your money. Within 24 hours, you get an email listing the five highest bidders.

The service is free to use, and winning banks pays Spaarbod a commission when bids result in new deposits.

It’s not difficult to imagine these auctions going live, where each participating bank would have an employee bidding in real-time for a user’s deposit.

Heck yeah! And why do I have to shop around for the privilege of giving you my money anyway??

Such a seemingly simple idea but – on a marketwide scale – this model has major implications for advertising and marketing overall. If engaged consumers (buyers) approach marketers (sellers) when they are in the market for a seller’s services, those sellers could potentially spend far less money on spray-and-pray mass marketing… and pass the savings on to the customer in the form of lower prices or, in this case, higher interest rates. The advertiser is likely to spend less and the customer gets a higher-value, more customized outcome.

Doc Searls (who also may have been the first person to use the word “conversation” in a marketing context) first coined the phrase “intention economy” to describe the idea of markets designed around engaged buyers instead of message-pusing sellers. I’ll explore the intention economy in another post.