Web Economy: The Shift to Service

3 minute read
Gerry McGovern avatar

Cloud computing and virtualization reflect a general movement driven by the Web: a shift towards a more service-driven economy.

There are two major trends that are now coming together to reshape our economies and societies. One is the continuing replacement of humans by computers in the workplace. Computers are essential in manufacturing and in the office. They continuously replace human effort and boost productivity.

Consider this: most of the products we design today could not be designed without computers. A new computer from Dell, for example, can only be designed by using computers from a previous generation. In other words, an older model of a computer is helping in the creation of a newer one.

So in which areas are computers not likely to replace humans (at least in the short term)? Service. The caring industries. People like being cared for by other people. A genuine smile and a friendly voice have a powerful affect on us. The computers will look after the hard space, humans will look after the soft space.

The Web thrives on interconnections; cloud computing and virtualization live on the Web. If you are not connected-if you live on a remote island with no outside connections-then to live you must physically have everything you need beside you. But if you live on the Web, it doesn't matter where what you need resides, once you can make use of it. It's not the owning or the physical proximity that matters-it's the use. And what are the implications of all this? Service.

Steve Ballmer, CEO of Microsoft, said in March 2010 that Microsoft was "betting our company" on the cloud. I hear the same sort of statements in other big companies I deal with. There's a shift to the cloud; a shift to service.

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Part of this shift is of course technical. But there's an equally large cultural part . A service-driven economy will be different from a product-driven economy. Why? Because the most important thing will be the service. You pay 10 dollars a month, not 400 dollars as a once-off payment. That changes how you think about what you're getting.

Most organizations are structured around a launch and leave project-based culture of products, marketing and communication campaigns. The reward is for producing things (products, websites, brochures, videos, advertising campaigns). In a service-driven economy, the reward-structure will be based on how happy the customer is with your service.

How does a service-based brand thrive? By showing customers that you care about meeting their needs, month-in, month-out. These customers have not bought your product; they've bought your service. And that means they judge you on your service and can leave you more easily if your service declines. In service-driven economies people are locked in by trust and satisfaction, not by the fact that they have made a major investment in a product and must stick with it.

Are you ready for service? Because that's where the Web is at. Great websites are run by service professionals. People who want to help their customers succeed. People who care more about whether the customers are happy than whether the organization is. If you focus too much on the organization -- the internal politics -- you invariably lose focus on the customer.

About the author

Gerry McGovern

Gerry McGovern is the founder and CEO of Customer Carewords. He is widely regarded as the worldwide authority on increasing web satisfaction by managing customer tasks.