‘Hey look Dad, Jamie and Lillie are dating!’ my 14-year old daughter announced as we were having lunch on Saturday. She came to this conclusion because Jamie and Lillie’s avatars were together at Jamie’s house on the Snapchat map.

The new SnapMap functionality terrifies me, as a father of two teenage girls but it also got me thinking. Research suggests that Millennials and Gen Z are more likely to be protective of their privacy, but here a huge user base potentially handing over masses of behavioural information to an organisation that they know virtually nothing about.

The benefits that SnapChat will get from harvesting this customer behaviour data are clear, but what’s in it for their users? And when you think about it, it’s not just about giving up information about ourselves, we’re also giving up our time for free.

Looking around, examples of customers participating for the benefit of organisations are becoming more and more commonplace. giffgaff, Apple and NowTV are handing over their customer service to peer-based support forums, low cost airlines are getting passengers to tidy up their own rubbish – Most people seem to be happy to do this work for them but why?

Understanding the exchange

I decided to do some research of my own. I asked my daughter why she was happy for Snapchat to track her every move: ‘Because everybody does it Dad’, was the answer I got.

I’ve studied the application of behavioural psychology on customer experience for a number of years and understand the power of Social Proof, so I get why this was her answer. But could this be the only reason and what is really going on in this exchange between Snapchat and its users, and what lessons are there for other organisations?

Fortunately, there’s been some more in-depth empirical research carried out than my sample of one 14 year old. The latest report from the MIT Initiative on the Digital Economy (IDE) and Capgemini – ‘From UX to CX: Rethinking the Digital User Experience as a Collaborative Exchange’ explains what is going on in relationships between brands and their customers.

It reveals a shift in customer expectations and that a fundamental rethink in customer experience is required in this age of the new digital economy. To be truly successful, companies must adapt from offering a traditional user experience to an active collaborative exchange where both companies and customers seek to extract maximum value from the level of participation and information exchanged – i.e. to achieve a genuine ‘win-win’.

Value Capital – ‘What’s in it for me?’

So, what makes a user experience valuable and, therefore, worthy of customer engagement? This research shows that successful value exchanges must deliver at least one of economic, cultural, social, or information capital to the consumer.

  1. Economic – simple quid pro quo, give me your data and I’ll pay you
  2. Cultural –develop skills and cultural capital from helping others
  3. Social – increase your personal status or network
  4. Information – benefit from access to personal insight or community knowledge

Economic capital is pretty obvious, think money-off coupons. The others are less obvious and harder to quantify but just as important. The cultural capital gained from helping others on community forums, or the ability to increase your personal status (social capital), like the Snapchat example, are all powerful drivers.

In my own area of focus, Utilities, we’re seeing the impact of SMART meters and Apps showing personalised energy usage having a significant impact on customer behaviour – a perfect example of leveraging Information capital.

Creating human-centric win-win exchanges – how?

The MIT / Capgemini report goes into more depth on how companies can create value by taking on one of four roles depending on the amount of participation and information shared in the collaborative exchange: Host, Companion, Advisor or Director.

These four roles all have different characteristics; Hosts and Companions are much more open with information exchange and user participation, as adopted by companies like Uber or Waze, the social traffic app. More traditional companies, particularly those in regulated environments like healthcare and financial services, are more likely to fall into the Advisor or Director Category.

Perception is critical here; companies shouldn’t try to be something they’re not. Do customers really want an in-depth collaborative relationship with their Energy Company? My guess is they probably don’t but would be happy for them to leverage information about their energy usage to further develop and refine tariffs or offers as an Advisor.

When companies step outside of their expected dominant role it carries a certain amount of risk and plans need to be in place to analyse and react quickly to customer sentiment and changes in behaviour.

The rationally irrational…

Perhaps the most important point here is that it’s too easy in this day and age, with the rapid development of Artificial Intelligence and digital touchpoints, and the proliferation of vast amounts of data, to ignore the human element. Humans are notoriously ‘rationally irrational’.

We use all sorts of heuristics or shortcuts when forming judgements on value or customer experience as a whole. This means there’s risk in relying on data analysis alone. Truly successful ‘win-win’ exchanges take a customer-centric approach, where the value of each touchpoint is assessed from the customer’s point of view. Behavioural scientists working alongside data scientists to maximise companies’ value and customer capital, is the future.

It may be that there is a certain amount of naivety amongst young Snapchat users like my daughter, and they may not be aware of the full implications of the SnapMap feature, but 48% of the users in the UK are in the highly influential 25-44 demographic.

There will be a huge amount of pressure on Snapchat to drive new revenue models to satisfy its investors as shown by its roll out of new features like the SnapMap and its push into augmented reality.

Being a true digital native, Snapchat is likely to understand the importance of the human element and the power of the collaborative exchange. This is something that all companies will need to master in this difficult to navigate digital age.