The Connected Company

Chapter 1. The connected customer

If you make customers unhappy in the physical world, they might each tell six friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.

—Jeff Bezos

Customers are connecting, forming networked communities that allow them to rapidly share information and self-organize into powerful interest groups. Companies will have to be more responsive to customer needs and demands if they want to survive.

The Balance of Power is Shifting

The balance of power is shifting from companies to the networks that surround them. Connected, communicating customers and employees have more choices, and more amplified voices, than ever before. They have more knowledge than ever before. These trends are only increasing with time. This means the network—customers, partners, and employees—will increasingly set the agenda, determine the parameters, and make the decisions about how they interact with companies.

A Wake-up Call at Starbucks

In February 2007, Starbucks chairman Howard Schultz sat down to write a difficult memo.

Schultz, always in the habit of visiting stores around the world, had noticed that the Starbucks experience was deteriorating. And in 2006, Starbucks’ legendary growth had started to slow. The amount of money customers were spending was starting to dip.

In his 2007 memo, “The Commoditization of the Starbucks Experience,” Schultz laid ...