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Author: Simon Evans

THE MATHEMATICS OF DESIRE by Simon Evans

“About 99% of what you have you don’t need. That’s the business I am in. You have to create the demand by what you produce.?

Allen Questrom, CEO and Chairman, JC Penny Company (US department store chain).1

“.tomorrow’s society..is as a customer base ..potentially high-maintenance, increasingly difficult to influence and even resistant to persuasion.?

The Store Of the Future, Cocoa Cola Retailing Research Group, Europe. 2

Introduction

Marketing, it hardly needs to be said, is the creation of desire in the customer to purchase and own a product or service. At the heart of this endeavour is an understanding of the customer, the demographic they belong to, his or her preferences, past purchasing patterns and so on – a whole range of details that define the individual and their needs, and on which marketing strategies are based. Much comment and analysis, not to mention hyperbole, has been generated by the potential of digital technologies to transform this marketing and supply of goods and services. The dotcom bust of 2000 appeared to belie these visions of the future however, as the advertising industry slowly emerges out of a recession, it is obvious the new technologies of communication are driving radical change.3

Computer technologies offer significant opportunities to bring marketing campaigns closer to the customer; new ways of reaching them but, more importantly, also new ways of enhancing an organisation’s understanding of that customer. Not only can online purchases be associated with individuals, for instance, but any action arising from online marketing campaigns can be logged and analysed. Information can be collated from disparate sources and used to create a portrait of the individual customer – their age, gender, income, social class, habits and tastes. The marketer&rsquuo;s dream is, as ever, to know where, when and what a customer will buy. However, as the quote from The Store Of the Future illustrates, there is considerable scepticism about companies’ (and the technologies they use) ability to reach and convince the customer of the future. If networked computer technologies offer new and powerful ways for companies to communicate with and supply consumers, they also offer consumers new and powerful ways to research, select and purchase products.

This dissertation takes a critical look at current marketing technologies, examining the assumptions that inform their deployment and assessing their effectiveness. Will these new technologies enable companies to reach and convince the customer of the future, or will the benefits they promise companies prove to be elusive? The question I ask is: if the internet and computer technologies offer new ways for producer to reach the consumer, do they not also offer new ways of being a consumer?

Producers and Consumers.

So fundamental are these two functions of contemporary capitalism that it is easy to assume them as a given. However, in order to understand how computer technologies are effecting the relationship between producers and consumers it is necessary to study briefly what we mean when we use these terms and how these functions came to be interlocked at the heart of modern, industrial economies.

Adam Smith first described the emergence of the separate roles of producers and consumers, or the separation of factory and market. Smith described the world he saw; with the start of the English industrial revolution in the mid eighteenth century, vast numbers of the population abandoned the age old necessity of consuming only what one could produce, be it from the land or a cottage workshop, to enter wage employment in the new manufactories; manufactories that fuelled the ‘orgy of spending’ of the upper and middle classes.

Although the epicentre of this consumer boom was the middle class and their desire to emulate upper class tastes and manners, what has only recently been appreciated is how much the working class consumed. As Neil McKendrick points out in The Consumer Revolution Of Eighteenth Century England;

“Where whole families were employed for long hours at rising wage rates in the rapid growth sectors of the economy, the increased take home earnings could increase dramatically – easily carrying working class families into the class of consumers willing and able to afford not just the necessities but the decencies of life.? 4

Because women and children entered the workplace, there was a need for goods hitherto made at home: beer, clothes, textiles and so forth. Because families and women in particular, had the money, there was a market for these products. The founding industries of the early industrial revolution – textiles, candles, pottery – bare out the emphasis on the domestic economy as a driver of industry. Indeed in Wealth Of Nations Smiths uses a pin factory as the basis of his description of the division of labour.

This frenzy of consumption had, by the late eighteenth Century, led observers, Smith included, to recognise the role of consumption in stimulating industry. The ‘doctrine of beneficial luxury’ took over from the ‘utility of poverty.’5 Of course England of the late eighteenth century did not constitute a consumer society as we know it, but from the very beginning of the ascendancy of the market, the dependency of the two functions of capitalism were established; “According therefore as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniences for which it has occasion.?6

Mass consumerism in a recognisably modern form originated in America around the turn of the nineteenth and twentieth Centuries. Mass consumerism can be seen as the combination of high volume, low cost manufacture, a relatively affluent (industrialised) workforce and mass marketing. How and why modern mass consumerism occurred and occurred in America is not the subject of this essay, but some aspects of its genesis are relevant to the discussion of modern retail technology. James Beringer, in his classic study of the technological and economic origins of the information society, The Control Revolution, identifies a series of crises in the development of industrial technology. That is, innovations at one level of the economy cause a succession of crises at the higher levels. Hence, the innovation of mass production at the secondary level entails a volume of products that need to be distributed at the tertiary and sold at the quaternary levels, and so forth. Beringer cites the case of the miller of oats, Henry P. Crowell, who in 1882 adopted continuous flow technology for the production of oatmeal. Due to the limited size of the market for oatmeal, Crowell was soon producing twice what the market could absorb. Beringer’s contention is that innovations in control technologies were essential for the resolution of such an industrial crisis. In the miller of oats example, Crowell launches a national advertising campaign of a packaged, brand name product directly to the mass market. In Beringer’s account, Crowell virtually invents the breakfast cereal, but what is telling here is that mass marketing is seen as a control technology – a control of consumption and thereby a control of the market.7

Whether Crowell, or late nineteenth century America, invented brands and mass marketing campaigns is not important here. What is significant is the proliferation of technologies to control consumption in the USA at that time. In the same way that manufacturers innovated with the embodiment of pre-processing and control in the physical design and layout of factories, manufacturers and retailers of consumer goods innovated with store layout, packaging, customer feedback, distribution, market research and credit. Beringer rightly places these innovations within the context of emerging corporate structure, citing Alfred Sloan’s work at General Motors during the 1920s as an example of the development of what has been termed managerial capitalism: divisional structure; devolved operational management; central, strategic, top level management based upon high levels of feedback from operations (sales levels, production costs and so forth).

Beringer’s account, however, has serious omissions. Mass production and increasing industrialisation not only transformed economies, but they had an impact on the shape of the lives of individuals. As Marx observed in his 1856 lecture to Chartists: “All our invention and progress seems to result in endowing material forces with intellectual life, and in stultifying human life into a material force.?8 Thus increasing specialisation meant that, after the example of mid eighteenth century England, workers now needed and wanted pre-processed food stuffs, but they also consumed as they produced, en mass and within social formations defined by the modes of production. As with the eighteenth Century English middle class, the working class of early twentieth century industrial economies consumed in order that they might aspire to the state of leisure: ‘The man who buys a ticket transforms himself in front of the screen into an idler and an exploiter. Since booty is placed within him here he is as it were a victim of im-ploitation.’9 We do not have to necessarily agree with Brecht’s gloomy analysis of the alienating effect of mass media to accept that industrial production has profoundly shaped individual lives, both within the workplace and elsewhere, and that leisure time is the compensation for giving significant portions of life over to work, much of it deeply unfulfilling.

This implicit agreement is apparent at the key moment in the development of modern mass production, with introduction of the much celebrated five dollar day by Henry Ford. Ford took this step as a way of attracting workers to what was a notoriously soul destroying work environment, but also to prevent the threat of unionisation. In return for giving up their freedom and autonomy to a demanding and capricious factory system, the workers were rewarded with the means to enjoy unprecedented levels of consumer spending. Automobile workers could, for the first time, purchase the fruits of their labour.

With the above in mind, we can detect in accounts of economic change focusing on technology such as Beringer’s, the absence of dialectic. Unions and other working class strategies for wage bargaining were key, not only to the establishment of better wages and conditions for the workforce (and therefore the world of Western Democracies), but for an emergent working class and a sense of individual identity. E.P. Thompson, in his celebrated history The Origin of the English Working Class,10 traces early working class self determination to the Non-Conformist churches and temperance movements of the late Eighteenth and Early Nineteenth Century. Here, the congregation was urged into a personal and private relationship with god, a relationship free of the intermediaries of Priest and established church. This new empowered individual was encouraged, impelled even, in a mission of self improvement. Workers institutes, education programmes, cultural betterment, were seen as a way for workers to better their material and spiritual well being. It is these workers, formed into trades unions, who provided the skilled workforce and the emerging consumer market that powered the industrial revolution.

In place of dialectic, Beringer’s account locates a unifying purpose within industrial capitalism by portraying it as a homeostatic system. The disequilibrium introduced by new technology leads to further technological innovation that restores order. Within this paradigm, control of consumption is an attempt to impose order on a chaotic world, to mitigate the effects of technological innovation. Two critiques of this view are relevant to our brief history of producers and consumers. Firstly, Alain Lipietz, identifies the importance of domestic consumption and the regulation of wages as key to growth in the post-war Fordist consensus.11 Certainly, we can see during this historical period the golden age of mass marketing, with the rapid development and increasing sophistication of television advertising and branding, as firms competed for the wages of an increasingly affluent work force. As such, demand is influenced as much by political policy as technological innovation. Secondly, and paradoxically given his influence on Neo-Liberals and their response to the Fordist crises of the 1970s, we have Joseph Schumpeter’s entrepreneur as the driver of economic growth. Through his or her radical re-configuration of technology, capital and labour to create efficiency savings, the entrepreneur brings about discontinuous changes to the economic environment. For Schumpeter, successful control of the market (i.e. reduction in competition) and, therefore, high levels of profit, dampens this innovation. In this Schumpeter affirms Marx’s description of capitalism as a revolutionary mode of production. Whilst there are fundamental differences in their accounts of the economics of the process, there is a shared understanding that markets are inherently unstable, and that the inverse, stability and control, leads to stagnation in growth.

These two, admittedly brief, accounts of economic progress suggest a different reading of the evolution of the relationship between consumer and producers, as mediated by technology. We can see that the relationship between producers and consumers, like that between labour and capital, is dynamic and critical, which is another way of saying it is dialectical. The technologies that define and structure these relationships are created by the economic imperative but the relationship between producers and consumers is cultural and political as well as purely economic. Because of this, technologies are adopted because they not only create profit, but they also serve the needs or desires of individuals and/or social groups, as perceived at that time.

Finally we can summarise the salient features of managerial capitalism as it relates to an analysis of the technologies of marketing:

  • High levels of bureaucratic control over consumption.
  • Consumption as a mirror of the modes of production – we consume as we produce.

Knowing ‘You’

But now things, it seems, have changed; people have changed. With the decline in mass manufacturing in the West, the consumption patterns of the new worker are shifting. Commentators on business, marketing and sociology have lined up to describe this new individual. No longer content to be defined by the group (and to consume en mass) or assuming that State or Corporation will care for them, the new individuals represent the emergence of a more segmented and individuated market. This, observers claim, is causing serious problems for business. I discuss the ‘new’ individual later, but first I want to look at the role of technology in this change of patterns of consumption.

Television, the most powerful of the twentieth century marketing technologies, is a good place to start. Recently, the Financial Times assigned the reason for the decline in audience share of ITV, one of the five UK terrestrial TV channels, to the proliferation of satellite TV Channels. Five years ago ITV had 60% share of the market, now it is down to 22.6%, a decline that appears inexorable.12 Of course, less audience share means a smaller number of people exposed to advertising, and television advertising spend has consistently fallen as a consequence. Marketing budgets are being spent elsewhere and the internet is a big beneficiary. Despite a retrenchment immediately following the dotcom bust, online advertising and marketing is growing significantly. PricewaterhouseCoopers has reported an 85% rise in online spending in 2003,13 with the Advertising Association giving £376m as the figure spent by UK advertisers in 2003.14 This is in the context of a decline in marketing budgets generally, 11% in the second quarter of 2003 for instance.15 Of course actual usage levels of the internet are an indication of the medium’s potential to reach customers and these usage levels are high. The UK’s then telecommunications regulator, Oftel, calculated that in December 2003 50% of UK households were connected to the internet.16

As the Financial Times enthuses ‘The greater ability to personalise advertising using new technology – ranging from the internet and mobile technology to digital printing – may provide something of an answer. It allows advertisers to exploit the very fragmentation that denies them the single broad platform that old-style TV used to give.’ 17 This ability to reach individuals is often cited as the advantage of digital media, whether it is personalised e-mails or customised direct mail print outs from digital presses.

Reaching individuals may mean simply the acquisition of a list of email addresses and a bulk mail out, banner ads or the use of cookies to monitor browsing histories. At its most developed, however, such digital marketing techniques encompass a range of approaches utilising extensive information on individuals. This area is loosely known as ‘customer relationship management’ (CRM), and is seen as key to the future of marketing. It is a broad area, encompassing call centre management software, customer support systems, sales process automation (SA), account management and so forth. There are also widely differing degrees of intrusion into the lives of customers, ranging from the basic cross selling strategies of online retailers (“people who bought that also bought this?) through to enormously sophisticated pricing strategies of grocery loyalty card schemes. As with all such wide ranging marketing concepts there are various conflicting definitions of what it actually means, however, as a quote from one of the North American CRM industry association sites illustrates, a notion of ‘customer centricity’ runs through most of them:

‘CRM…is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty…If customer relationships are the heart of business success, then CRM is the valve that pumps a company’s life blood…It’s a strategy used to learn more about customers’ needs and behaviors in order to develop stronger relationships with them.

..True CRM brings together information from all data sources…to give one, holistic view of each customer in real time. This allows customer facing employees…to make informed decisions on everything from cross-selling and up-selling opportunities to target marketing strategies to competitive positioning tactics.’18

Although now a broadly encompassing concept, relationship management initially, in the early nineties, referred to the software that managed the process. This link between technological capacity and marketing philosophy is instructive. In his article Messages That Never Miss the Mark, Simon London describes the correlation between the development of ‘one to one’ marketing techniques and advances in technology: ‘Technology was a large part of the argument. Mr Edelman, who left BCG two years ago, says the consulting firm could see that the cost of data storage was falling fast. This was making it possible for companies to warehouse data in hitherto uneconomic quantities. Moreover, data capture opportunities were on the rise, with the advent of electronic point-of-sale (Epos) systems, bar-coding, loyalty cards and the like.’19

Thus new philosophies of marketing evolved because technological advances made them possible. However, to avoid, like Beringer, of falling into the trap of believing technology to be self evolving, there needs to be an explanation for the persistence of CRM and its successful evolution from a range of software packages into a marketing philosophy. A brief history of ‘Relationship’ and One to One’ marketing techniques can help us here.

The phrase ‘segment-of-one’ was created in the late 1980s by The Boston Consulting Group (BCG), the management consultancy. ‘One-to-One Marketing’ was popularised a few years later with the publication in 1993 of The One to One Future, a business best-seller written by Don Peppers and Martha Rogers, two former advertising executives. These concepts concentrated on the relationship between sellers and buyers, aiming to re-orientate companies away from the products they manufactured or sold, towards the customer. Shoshana Zuboff and James Maxim in The Support Economy, (a broad ranging look at the modern consumer and how, they claim, corporations are failing them), explain the popularity of these techniques amongst companies. By the late 1980s, as the collapse of Fordism and the ascendance of free market ideologies drove the globalisation of production and consumption, fierce competition beset many companies. Within this new global marketplace a profusion of new products fought for the customer’s attention (Zuboff and Maxim quote the statistic that between 1985 and 1989, the number of new products grew by 60%, to an all time high of 12,055 per year).20 The logic for personalised marketing, along with the increasing awareness of the importance of brand, was that amongst this blizzard of products, customers would respond to marketing that appealed to their individuality; companies would be able to learn more about their customers and be able to offer customization (however trivial) of products that this new intimacy would demand. In doing so companies could use the power of a relationship (or relationships) – loyalty, emotional investment and exclusivity – to establish a unique and compelling position in the market place. Zuboff and Maxim quote Regis McKenna from his book of 1991, Relationship Marketing: ‘In a world where customers have so many choices, they can be fickle. This means modern marketing is a battle for customer loyalty. Positioning must involve more than simple awareness of a hierarchy of brands and company names. It demands a special relationship with the customer.’21

Couched in the language of intimacy and convenience, these techniques nonetheless exhibited a familiar preoccupation with control of consumption. Zuboff and Maxim continue, critically quoting Don Peppers and Martha Rogers: ‘ “ Now, even if a competitor offers the same type of customization and interaction, your customer won’t be able to get back to the same level of convenience until he re-teaches the competitor what he’s already spent time and energy teaching you.? In other words, relationship marketing and its one-to-one cousin were from the start strategies to limit consumer choice.’22

This pre-occupation with ‘knowing’ the customer still persists today in the literature of software vendors and consultants: ‘A company’s business processes must be reengineered to bolster its CRM initiative, often from the view of: ‘how can this process better serve the customer?’23 Again, behind the rhetoric lies a more hardnosed reality: ‘What works is the company-wide commitment to customers, the ongoing creation of customer-perceived value and ‘barriers to exit’ which leads to loyalty and advocacy.’ And: ‘Success will be defined by three outcomes: the highest share of customer possible, optimal lifetime customer value generation, and the lowest voluntary churn.’24

Lucrative customers are identified,25 their spend optimised and their loyalty enforced. Within the logic of enterprise capitalism26 this is to be expected, however, as I shall consider in the following section, it belies claims that technology is fundamentally changing the relationship between producer and consumer; the emphasis on control of consumption is a linear descendent of the early twentieth century marketing innovations already discussed. The objective is to know accurately what the demand for goods and services is, to produce efficiently to meet this demand and to minimise variance. It is business as usual.

In 1924, halfway through the year, Alfred Sloan, head of General Motors, went west to confirm whether his hunch was right and that the company was building more automobiles than the market demanded, despite his newly instigated market feedback mechanisms. On discovering in various mid-west cities that indeed, the forecourts were full of unsold vehicles, he slashed production and introduced a still more refined feedback process. This determination to seek new levels of linkage between demand and supply can be still be seen in contemporary business practice as it relates to CRM, such as in a text book on data mining and business intelligence that devotes a section to the application of 6 Sigma to marketing and sales,27 or a recent article in The Register, the technology news site. Reporting on the precipitous decline in CRM software revenues, the article predicts that oCRm (operational CRM) software vendors will have to partner with analytical CRM vendors (data mining) to ensure survival and growth. That is, only companies that can supply software to model and predict customer behaviour, as well as automate basic routine sales and marketing operations, will succeed.28 Here we see the integration of business metrics, sales process and product marketing. This is not a new paradigm, but computers have facilitated the integration and given unprecedented speed and reach to the project; discovering what customer’s want, but also to creating the want, of managing their desire.

Consider the notion of personalization. This connection between knowing an individual and using this knowledge to offer specific and appropriate goods and services lies at the heart of accounts of the technologies’ effectiveness. In 2001 two BCG consultants wrote: ‘Ten years ago marketers discovered they could narrow their focus and create products for specific customer segments. Now a segment can be trimmed down to an individual.’ 29

Two years later an advert from IBM, the UK’s number one retail technology vendor: ‘A sense-and-respond retail environment, for instance, would know every time its best customers entered the store. It would be able to respond to what each valued customer was shopping for that day and suggest appropriate cross- and up-sells. Products would be in stock, promotions would be relevant, sales associates would be experts, check-out would be instantaneous.’ 30

A study of data mining, the technologies and methodologies that create this ‘personalisation’, reveals a different story. Data mining is based in standard statistical operations and the models of econometrics, but mediated by computer algorithms and adapted for analysis of very large amounts of data. That these techniques are powerful and effective in a limited way is, debatably, true (see the following section), however, they only allow manipulation of marketing data within familiar segmented models. In the same way that, due to the impossible (potentially infinite) profusion of data involved in the creation of true individual narrative paths, such interactive narratives can only fake interactive effects,31 data mining must link individual profiles to prior known groupings, themselves constructed from data exploration approaches such as clustering and association. Thus when a customer buys a book on Amazon, they are offered a deal including another book or when a supermarket emails an offer to you, say for Australian wine, the personalization is the result of identifying which segment/group, or combination of segments/groups that you the customer belong to.32 What is unique about the technology is the ability, at speed, to receive the individual’s information, process the information (i.e. associate to groupings and compute the combination value) and output the relevant information. Clearly, such strategies have use for the company in terms of pricing, sales optimisation and the maximisation of profit. There is, debatably, also some limited use to the customer, in that unfamiliar products may come to their notice. However, the reality of this species of machine ‘intelligence’ falls a long way short of the ideal: it does not offer absolute and unfailing knowledge of the individual consumer, or present potentially transformative insights into who a customer is, or what they want now and in the future. ‘One to one’ or ‘relationship’ marketing in this sense is technical fakery.

That the work of data mining can only be founded on the assumptions and goals of the retailer, and involves the needs of the individual customer only tangentially, is confirmed by its epistemology. As the author of the Principles of Data Mining states: ‘It (choosing the appropriate analytic model) involves a number of steps:..deciding how to quantify and compare how well different representations fit the data (that is choosing a score function.)’33

This emphasis on defining goals and creating business contexts runs through much of the operational literature on data mining. That the technology aids institutional cognition, rather than challenge it is illustrated by the following: ‘The relationships and structures found within a set of data must, of course be novel. Clearly novelty must be measured relative to the user’s (the corporate operative) prior knowledge (my emphasis). Unfortunately few data mining algorithms take into account a user’s prior knowledge. For this reason we will not say very much about novelty in this text. It remains an open research problem. Whilst novelty is an important property of the relationships we seek, it is not sufficient to qualify a relationship as being worth finding. In particular, the relationships must also be understandable.’ 34

This technical fakery is acutely dissected by Simon Schaffer in his essay OK Computer a brief history of what Schaffer calls cerebral metrology, or the measure of intelligence. His key insight, quoting Hugh Kenner, is that ‘..authentic human capacity and specifically mechanical capability develop in tandem.’ 35 Schaffer’s consideration of the philosophy of machine intelligence has implications for our analysis of marketing technology. He goes on to describe Babbage’s party trick of programming his calculating engine to, at a predetermined moment, suddenly break from the increment of integers from zero to one million, to advancing in ten thousands. This discontinuity came as a surprise to the observers, understanding as they did machine’s original procession as law-like, but not the transformation, which of course was prior programmed by Babbage. We see a similar sleight of hand with the issue of novelty in data mining, where newness can only, unlike the claims of the propaganda, be defined prior to computation. ‘Aping the street hucksters and wizard impresarios, Babbage’s house party tricks, Jevon’s logical piano and Loebner’s e-mail Turing tests are, precisely, bits of showmanship designed to insinuate through their histrionics the humanity of machinery and the machine-like aspects of human behaviour.’36 For Schaffer these shows represent rival modes of the representation of human and machine capabilities. In constructing machines to ‘know’ people through inflections of statistics and, in the end, fairly crude patterns of probability, we shift our expectations of what it is to be human.

In CRM we find a hollow flattery of a customer’s individuality, purporting to offer something for ‘you’, when in fact it disguises that ‘you’ are offered the familiar products of mass manufacture, but in a way that increasingly limits choice and maximises expenditure. Furthermore, the de-limited ‘self’ these technologies ‘know’ is one the individual is invited, obliged even, to inhabit.

Loyalty, Privacy and Economics.

In the light of the emptiness of the claims to the technologies’ novelty, their actual re-configuration of twentieth century tools for the control of consumption, it is useful to assess exactly how effective they are – do companies get a return on the significant investment involved and what do customers get out of it?

Perhaps the most evolved and extensive use of ‘one to one’, CRM or relationship marketing has been in the use of store loyalty cards in the grocery and fast moving consumer goods (FMCG) businesses. For this reason, the business of loyalty repays closer study. A Guardian article recently listed the numbers of active store loyalty cards in the UK: Nectar having 11 million, Tesco 10 million and Boots Advantage 15 million.37 Accurate data on whether the schemes benefit companies is hard to come by. However, bearing in mind that Safeways cancelled their scheme in 2000, saving around £60 million in operational costs, Tesco in the UK claims: ‘Most retailers who have launched a loyalty scheme experience a 1-4% sales uplift’.38 A loyalty marketing manager for Supervalu, 11th largest food retailer in the US and the country’s largest food distributor, claimed in an interview, that their Preferred Perks card scheme effected 5.5% growth in sales with a 40% growth in profit for their retailers. However, they had no hard data on the effect of such a scheme on frequency, i.e. loyalty.39

What is in this for the customer? What accounts for the high levels of participation in store loyalty card schemes? Research indicates overwhelmingly that participation in these schemes is motivated by cost savings. The remuneration model varies for each card, but in effect, gives the customer a modest discount for every pound or dollar spent. The Guardian quotes an Asda study (a supermarket that does not have a card scheme) that appears to show 96% of shoppers would prefer lower prices, to a card scheme.40 A survey carried out in 2000 on CRM systems generally by the Chartered Institute of Marketing (C.I.M.), showed that of just over 1000 adults surveyed, 50% would be motivated by cost savings to enter the relationship. Only 8% believed that regular contact with a company benefits the customer, while 50% thought that such ongoing relationships benefited company. Finally only 5% of the study would be interested in hearing about new products and services and 4% encouraged to participate by the fact that the company could get to know them better. The most telling statistics concern what should constitute the relationship – very small numbers expected or wanted direct mail. Aside from the actual act of purchase, the only significant numbers that agreed with a relationship was when it was after-sales care or a complaints handling service.41 Earlier studies on personalised marketing schemes appear also to show a correlation between financial incentive and participation. Zuboff and Maxim quote a study that found 81% of participants of these ‘relationships’ were motivated by cost savings, rather more than those motivated by either personalisation or convenience.42

This focus on prices by the customer is echoed in an article on SearchCRM, a CRM industry site, by Micheal Lowenstein, a consultant in the CRM industry. Lowenstein makes the point that the effectiveness of the schemes in ensuring loyalty is levelling off, or diminishing, due to adoption across the industry. He refers to a study undertaken in the UK during 2000 that showed around 40% of shoppers had more than one loyalty card.43 Lowenstein advises a better use of existing data to optimise the cost of running the schemes and to maximise the spend of the top shoppers: ‘(The) bottom tiers of customers should receive less, or no, investment [by the supermarket]. Some might even have to be discarded if the company is to concentrate its resources on retaining profitable customers.’ It is a widely reported statistic that around 80% of a retailer’s profits comes from 20% of customers. The attraction of attracting and retaining these customers is obvious; the inverse is discouraging shoppers from whom a company does not make significant profit, or who simply cost too much to service. The ‘ investment’ Lowenstein refers to is that of the costs of servicing the relationship – emails, brochure mail outs, discount vouchers – however, when one considers that in order to receive favourable prices, a customer must participate in the relationship, denial of access to this relationship effectively means being ostracised to a punitive pricing environment. A recent study by Consumers Against Supermarket Privacy Invasion and Numbering (Capsian) in the USA, indicates that by comparing a number of supermarkets in one geographic area, some with card schemes, some without, that the discounted prices offered to card holders in card scheme stores were very similar to standard prices in non card stores. Non card users in card scheme stores paid considerably more for an average basket44.

We can sense here the complexity of loyalty schemes and the challenge faced by companies in getting them to pay. In effect they are paying for access to information on the customer and using this to launch new products, optimise price (i.e. find out how much the customer is prepared to pay) and to cross sell. For instance, Tesco’s swift and successful launch of its range of financial products in the U.K. is widely attributed to the effective use of the accurate and detailed data gathered by the company’s Clubcard scheme. However, as Lowenstein observes, it is a precarious balance, ensuring customers do not simply mine the loss leaders and the cheap deals and not increase their basket size.

Grocery retail is fiercely competitive, particularly in the UK and much of the take up of the technology has been the result of competitive pressure; if the other retailers have a scheme, so must you. However, the fact that customers are, in the main, only motivated by cost savings, and that not all retailers adopt relationship based marketing schemes, would suggest that the original principles behind relationship marketing (convenience, loyalty, customisation) barely inform the deployment of loyalty cards and remain unproven. Nonetheless these ideas, ideals even, of intimate relationships between producers and consumers still form the basis of visions of the retail future. This is a challenging future, for grocery retailers in particular. The Store Of The Future quotes an IGD research study which predicts that, by 2010, the share of the European grocery market held by the top 10 Food retailers will be 60.5%. With fewer new territories to enter and fewer weaker competitors to incorporate or take customers from, the big retailers will have to start competing for each other’s customers, or make more money out of the ones they already have.45

Digital technologies are often seen as significant drivers of this competitive future, as well as a way of mitigating its effects (one is reminded the homeostasis of Berringer). For instance, the ease with which customers can browse for and select the cheapest price for a given product has clearly led to lower margins and changes to retail geography.46 The Store Of The Future acknowledges this paradoxical challenge of digital technology to business, in two visions of the future relationship between customer and retailer. In, what they term, the ‘Consumer Control Relationship’, the customer runs the relationship, deploying a range of futuristic technologies (intelligent software agents, online tendering and so forth) to source and obtain the best deal for the products they require. In this the opportunities for the retailer to maximise margin is limited, reduced, as they are, to passively publishing price lists. Alongside this scenario, the report posits another, the ‘Retailer Driven Relationship’:

‘Luis is busy finalising a financial analysis for a client, when he remembers that it is his turn to organise the food shopping. He and his wife Petra usually take turns to organise the food shopping, but she is away on business in Munich. Because Luis works from home, he decides he could do with a break, so he drives over to CasaQuinn. But first he consults his PDA and finds that CasaQuinn had already sent him a reminder that the refrigerator was running low on various essentials. He also finds that Petra had requested some recipe details for their dinner party at the weekend and CasaQuinn had already sent an order confirmation.
Luis picks out some e-coupons sent by CasaQuinn and sets off for the store. As he enters, his PDA tells him that many of his regular purchases, plus the special dinner party items, have already been collated and can be ready for him to collect at the Drive-Thru by the car park exit. He chooses to accept most of the suggested products along with a double loyalty points offer on various items shown on his PDA.’47

Whether customers would accept this level of intrusion into their personal lives must be open to question, however, the ability of technology and technology vendors to deliver it must also be in doubt. In 2001, one survey of 226 CRM system users reported that 25% saw no significant improvement in company operations, while half experienced only minor improvement. 48 These systems have been and remain extremely expensive, with the software costing in 2000 around $3 million and up for a large company, (and involving considerable configuration and implementation costs). Prices and projects sizes have dropped in the last 3 years, perhaps reflecting the scepticism that now pertains, as well as the economic down turn, with average CRM deals at 1.4m and 1.7m euros ($1.37m and $1.66m), still significant investments. 49

The data suggests that unequivocal CRM successes are rare. The Boston Consulting Group (BCG) estimates that 67% of companies that have completed enterprise Customer Relationship Management (CRM) or Enterprise Resource Planning (ERP) initiatives have seen neutral or negative results. Of projects that finish on-time and within-budget, a mere 33% saw positive financial impact.50 Meta Group, an information technology analyst, estimates that a full 75% of CRM initiatives fail to meet their objectives.51

The problems with CRM systems, however, go beyond implementation. In a thought provoking paper Privacy, Economics, and Price Discrimination on the Internet52 Andrew Odlyzko makes a convincing case that the real reason for the erosion of privacy implicit in CRM systems is not to ensure loyalty or to programme frequency, but to employ discriminatory pricing. That is, charging customers what they are prepared to pay, rather than what the market determines. Key to this are two things: intimate knowledge of the customer in order to assess what they are prepared to pay, and the prevention of arbitrage, that is those customers who are unable to secure low prices buying off customers who are.

Whilst this paper is not concerned with the specifics of price discrimination, it is useful to note that Odlyzko makes a convincing case for price discrimination as it is: 1. economically efficient, tending as it does to generate low average prices; 2. socially progressive, in that it charges customers what they can afford. However, as Odlyzko makes clear, despite these low prices and socially progressive effects, overt price discrimination is very unpopular with the public. In fact, such dissatisfaction with railroad pricing, led to the first serious regulation of private business in the United States, with the Interstate Commerce Act of 1887

For retailers of today, the implementation of overt discriminatory pricing would continue to be very controversial. Odlyzko makes the point that price levels are less important than how they are set, as seemingly random pricing structures appear to undermine the moral legitimacy of capitalism. However, the attractions to price in such a way are very strong, particularly in highly competitive markets, or with products with low marginal cost. Clearly, relationship marketing and loyalty schemes provide rich information on individual customers’ willingness to pay, and there are ways to hide discrimination. Strategies such as bundling,53 or avoiding quoting costs in cash (loyalty points are an excellent alternative), allows companies to create dynamic pricing.

If technology brings about the fiercely competitive markets that can deliver the low prices customers seem to want, companies will be impelled to find ways to defend themselves against the commoditisation of all that transacts between producer and consumer. As we have seen, relationship marketing strategies and CRM systems are ways to maintain loyalty and inhibit open markets, but it is worth pointing out that other, more conventional marketing strategies can be seen as increasing margin by allowing dynamic pricing. Brand difference, for instance, allows companies to charge more for products that may appear different but are virtually the same; or the ‘value added’ service outlined in visions such as the ‘Retailer Driven Relationship’ of The Store Of The Future, but based upon traditional notions of ‘service’, where the added value justifies price increases that are more than the increased cost of servicing the relationship.

Finally, it is clear that the commercial and economic context of the deployment of modern digital marketing technologies is complex and paradoxical. Behind the marketing rhetoric of the technology vendors, the reality is one of companies using the technologies to mitigate the lower prices being created, in part, by the transparency and speed of other digital network technologies. Their customers enjoy the lower prices, but are not prepared to endorse the erosion of privacy and the arbitrary pricing strategies these competitive markets generate. As a consequence, the technology of marketing is being deployed within an increasingly hostile relationship between producer and consumer. More importantly, the potential for restrictive and anti-competitive behaviour risks dampening innovation and the radically new formations of capital, labour and technologies that some believe are essential for continuing prosperity, growth and social justice.

You Are What You Consume.

A letter from the O2 mobile telephone network, dated October 2003:

‘Dear Mr Evans,

At O2 we’ve been reviewing the rewards we provide and have found it necessary to make some changes.
We are sorry to have to tell you that the reward you have been receiving will end on 30th November 2003.
However your mobiles can still receive best plan advice..(etc)

..Yours sincerely,

Head of Customer Relationship Management, O2 UK’

A reading of the small print on the attached terms and conditions reveals that, despite three and a half years of custom and hundreds if not thousands of pounds paid in charges, a machine has calculated that my average monthly spend no longer justifies a loyalty reward. It is tempting to conjecture that the CRM algorithm has assessed my length of contract and realising that, as it is 7 months before I am able to cancel, the saving the withdrawal of the reward will give the company justifies the risk I will cancel my contract when term elapses. I did not receive a reply to my letter of complaint. Such is an experience of customer relationship management today.

But then can I expect anything different? I signed a new twelve month contract in exchange for a free new mobile phone that would have cost the company over £100. The company is also paying for the hugely expensive G3 licence as well as investing the infrastructure necessary to bring that technology into use. This is in the context of a fall in the cost of mobile services of over 60% over the last ten years.54 The company must make a profit. It’s business.

This dilemma illustrates the ambivalence of contemporary consumer experience. Competitive markets have led to the declining relative cost of a whole range of goods and services over the last 50 years, and contributed to significant increases in the standard of living for much of the industrialised West.55 Increasing competition, deregulation and the efficiencies created by technological development continue to push prices and margins down. The consumer likes this, but the companies do not. The need for companies to return profits within these markets can lead to a consumer experience beset with a sense of injustice and a feeling of powerlessness.

The relationship between producer and consumer, perhaps, has always been adversarial: ‘Caveat emptor’ and so forth. It is certainly true that the conception of the consumer embodied by digital marketing systems and techniques is one that would be familiar to a late Nineteenth century retailer:

  • People are only consumers.
  • Consumers are motivated to consume goods by group norms.
  • Consumers are essentially passive.
  • Consumers have no stake in the production process.

For the last 80 years these ideas of what a consumer is have been extraordinarily successful in delivering material prosperity to the societies of the democratic industrialised nations and to the companies that trade within them. It is interesting to ask if this conception of a consumer continues to be valid or effective. If, as I have claimed, the relationship between producers and consumers is dialectical, how have changes in the technologies of production, patterns of work and the values held by individuals changed what it is to be a consumer?

Clearly people have changed considerably over the period of the Post-Second World War boom and into the 21st century. Zuboff and Maxim are good on this area, citing a raft of statistics – from foreign holiday expenditure, to levels of home schooling, to the numbers using email, chat rooms and online communities.56 To those one might add the doubling of the mortgage churn rate (i.e. those customers moving lender) in the last seven years,57 the rising incidence of divorce,58 the lack of participation in democratic elections,59 the increasing indebtedness of individuals.60

The Support Economy is the latest in a number of books that have been published in recent years which discuss these changes in relation to business. What unites many of these books is an understanding of emerging individuality. The emergence is accounted for in different ways, but essentially comes down to an analysis that points to three factors that have/are causing change – diminution of the role of institutions in our lives, a change in values and the rapid spread of technology, particularly information technology. Central to these accounts is a description of over supply, memorably identified by Allen Questrom in the quote that heads the dissertation. We have lots of stuff, most of which we don’t need. Our basic needs in developed industrial countries have long since been met.

Zuboff and Maxim link oversupply and individuality explicitly. Considering the period of American economic history from the 1920s through to the 1990s, they see a number of consequences for Fordist production. Clearly mass production/consumption delivered enormous material benefits and unprecedented levels of per capita income. However, the bureaucracies and huge organisations that characterise this period and mode of production also engendered an insistence on group affiliation amongst the population. In Zuboff and Maxim’s interpretation, individuals sought sanctuary in the group, be it company, union or rotary club, as a way of ensuring material wealth, but also as a refuge from the chaos of rapid urbanisation and industrialisation. This maybe a contentious point (did people earn their way out of unionisation or were they forced?), but the authors are convincing on their thesis that the generation of the early and mid twentieth century, like the workers at Fords plant, accepted the conditions of work as a pay off for material prosperity. The generations born in the industrial west after 1950, however, understood material comfort as a given, and that the ways of expressing aspiration and values moved away from objects and goods, and onto experience and individual self expression. The authors of Funky Business, a dotcom boom bible, adopt a more proselytising tone: ‘Freedom has thus been thrust back into our hands. Institutions used to work to create certainty. Now, the certainties are withering. Blind loyalty has died. We no longer proclaim lifelong loyalty to institutions, no matter what they are or what they do. We shop around.’61

Some see the changes as ominous, for instance, Robert Putnam, in his book, Bowling Alone, laments the collapse in membership of various civic and voluntary organisations. For him this fundamental change represents selfishness and leads to a degradation of civic life and the depletion of social capital.62 For others, such as Zuboff and Maxim the new individuality is to be celebrated as a natural progression towards some ideal state of being. Rather than receiving one’s identity from such givens as family, gender, age and class, the personal construction of ones identity and meaning is seen as an individual’s life project. Ridderstrale and Nordstrom are more ambivalent in Funky business. They see choice and individuality as positive but also acknowledge the fragmentation of society, the widening gap between rich and poor, and the spiritual vacuum behind a society devoted to material satiety.

People have changed, but how they earn their living has changed also. To expect life long employment by the one company is now exceptional. Trade Unions, the expression of workers’ group identity, are no longer the dominant institutions they once were. Work life now is more demanding and less secure, with longer hours and the imposition of casual employment terms on whole swathes of industry, and not simply low income manual labour. Such changes do suggest a diminishment of collective action, be it collective bargaining or company pension schemes, but they do impel greater individuality and self reliance, with the need to retrain or to provide for one’s own retirement.

We return to the fragmentation that vexed the Financial Times, but one that is seen as a result of changing patterns of work and the values of individuals, rather than the product of technology or media platforms. However, it is the meeting of these three elements (changing patterns of work, new individuals and technology) that indicates a fundamentally new consumer, or a new way of being a consumer, is ready to emerge. Certainly, digital network technologies offer much to the consumer: one click shopping, online customer reviews, intelligent search bots, aggregated purchases and so forth. But a reduction of the possibilities of the internet to simply the tools of purchase is a mistake. As I have pointed out, the relentless automation and commoditisation such technologies represent, simply drive down margins and create their network opposite, CRM systems. These purchasing technologies can also be seen as strategies for the externalisation of costs by companies, that is, the consumer may pay less for a product, but ends up carrying out much of the work associated with purchase themselves (filling in application forms, configuring product etc).

Zuboff and Maxim make similar points in The Support Economy. Of the many books written by sociologists and business theorists on the consumer and the new technologies of marketing this is one of the most comprehensively and persuasively argued. At its heart is a compelling thesis that individuals have changed faster than the markets that serve them. Unfortunately, the work makes the mistake of extending consumerism to the level of culture, which has the reverse effect of collapsing all human experience into commodity, and with the corrosive effects of capitalism, we see experience emptied of meaning in the way machine intelligence empties humanity from intelligence.

‘Everyday life has become an object of consideration and is the province of organization; the space-time of voluntary programmed self-regulation, because when properly organised it provides a closed circuit (production-consumption-production), where demands are foreseen because they are induced and desires run to earth;..?63

Considering Lefebvre’s definition of ‘The Bureaucratic Society Of Controlled Consumption’64 as we read the futuristic propaganda of The Store Of The Future (and especially when we add that some have suggested that the predicted smart fridges have screens to display advertising for products you are running low on), we can see Lefebvre’s analysis realised in a grotesque technological vision. With George Bush’s exhortation to Americans to patriotically keep on shopping post 9/11, the obligations and limits of a life as a consumer became unusually visible.

Lefebvre sees the language and signs of marketing as conditioning how we think of ourselves. Compulsion is central to the ‘The Bureaucratic Society Of Controlled Consumption’, but also the images of marketing (what he calls publicity): ‘The act of consuming is as much an act of the imagination as a real act, (‘reality itself being divided into compulsions and adaptations) and therefore metaphorical (joy in every mouthful, in every perusal of the object) and metonymical (all of consumption and all the joy of consuming in every object and every action).’65 It is here that Lefebvre locates the eternal dissatisfaction that characterises modern life, compulsions programmed to desire the disembodied. This construction of systems of meaning around ‘real’ acts and artefacts, like the construction of the illusion of self in CRM systems, is challenged by the heterogeneity of data available of the web. Modern, ‘interactive’ marketing strategies attempt to deal with this complexity by themselves embracing their opposite, by the heavy use of self- parody or criticism, yet their effectiveness, compared to, say, 70s television advertising has been limited.

My contention is that the internet, taken as a whole, represents a massive search for voice and self-determination by individuals. It challenges the enervation of consumption. The huge amounts of data, experiences, opinions, beliefs and politics that the web disseminates and represents, suggest that, contrary to conventional notions, the consumer is neither passive, nor that they wish to remain divorced from the production process. I am thinking here of the legion of hobbyists, DIYers, enthusiasts. Indeed, vast areas of the internet were built, for free, by enthusiasts in their bedrooms. The challenges of the new digital technologies of communication go beyond questions of marketing and call into question the very configuration of the firm. The technology offers very powerful means for self-organisation and self-sufficiency, potentially replacing many of the organisational functions of a firm pioneered by Henry Sloan.

A step forward into this future of business and marketing might be an acceptance that individuals are more than simply consumers, that the need to consume goods and services is part of a complex of work and leisure and that the boundary between these two fundamentals of industrial capitalism – life as a worker, life as a consumer, are not as absolute as they once were. I agree with Zuboff and Maxim when they assert the new individual requires the formulation of new types of capitalist enterprise, one with the needs of the consumer at its heart. But whilst the best way to organise capital and labour to create wealth may not be the firm, the best marketing strategy of all is to give the individual a meaningful occupation and the time to enjoy its benefits.

Notes

1. South, G. The Turn Around Merchant. Drapers Record.June 28th 2003. p49

2. Store, The. The Store Of The Future – Consumer Relationship Strategies and Evolving Formats. October 2001. Cocoa Cola Retailing Research Group. Project IX. p29

3. See: Editorial. The Future Of Marketing Supplement. Financial Times. May 6th 2003

4. McKendrick, N. The Consumer Revolution in Eighteenth Century England in Ed. Neil McKendrick, John Brewer, JH Plumb The Birth of a Consumer Society: The Commercialisation of Eighteenth Century England. London. Europa. 1982. P26

5. Ibid. pp24

6. Smith, A. The Wealth Of Nations. Harmandsworth. Penguin edition. 1970

7. Beringer, James. The Control Revolution – The Technological and Economic Origins of the Information Society. Cambridge Harvard University Press. 1986. pp265-268

8. Marx, K. Selected Works. V. Adortasky (ed.) Vol.2. London. 1942. p428.

9. Brecht, B. Einbeutung. XVII, p169. 1967. German edition. Quoted in MacCabe , C. Theoretical Essays: Film, linguistics, literature. Manchester. M.U.P. 1985. p48. The term ‘im-ploitation’ can be understood as the reproduction of the modes of production, and therefore ‘exploitation’, by encouraging workers to passively enjoy culture that they have not created (modelling the enjoyment of the surplus of labour by capitalists), therefore engendering an alienation from the means of sustaining life, but carried out through thought and desire.

10. Thompson, E.P. The Making of the English Working Class. Harmondsworth. Penguin. 1968

11. For a brief account of Lipietz’s account of Fordism and Post- Fordism see: Lipietz, A. The post-Fordist world: labour relations, international hierarchy and global ecology. Review of International Political Economy 4:1 Spring 1997.

12. Harvey, F. Going, Going, Gone to Pieces. The Future Of Marketing Supplement Financial Times. May 6th 2003. p8

13. Figure cited in: Bonello, D. Sexier Than Ever. Financial Times. May 27th. 2004.

14. Figure cited in: Carter, Meg. Rich Pickings. The Guardian. May 24th. 2004

15. Gibson, O. Internet Advertising. The Guardian. April 17th. 2003

16. Consumers’ use of Internet – Oftel residential survey. London. Oftel. 31 July 2003. Available at:

http://www.ofcom.org.uk/legacyregulators/oftel/oftel_internet_broadband_brief/?a=87101#7

17. Harvey, F. Keeping In Shape For An Upturn. The Future Of Marketing Supplement Financial Times. May 6th 2003. p3

18. What is CRM? Article on DestinationCRM. Available at: http://www.destinationcrm.com/articles/default.asp?ArticleID=1747

19. London, S. Messages That Never Miss The Mark. Financial Times. Aug 08, 2001.

20. Zuboff & Maxim. op cit. p261

21. Ibid. pp261-262

22. Ibid. p262

23. What is CRM? op cit.

24. Lowenstein, M. Balancing Customer Loyalty Programs With Customer Advocacy. Customer Retention Associates. 26 Sep 2001. Available at:

http://searchcrm.techtarget.com/originalContent/0%2C289142%2Csid11_gci772692%2C00.html

25. Data Mining from CRM databases is used with standard market research to identify trends and customers. See Elliott, K &Scionti, R. The Confluence of Data Mining and Market Research for Smarter CRM. Kenning Research Inc, SPSS. Available at http://www.spss.com/downloads/Papers.cfm?List=all&Name=all

26. Enterprise Capitalism: Value is created within the firm, and is lodged within the products and services the firm offers to customers. Value is realised within the transaction between firm and customer. Value is maximised by the achievement of the most favourable terms possible by the firm from the customer.

27. Kudyba, S. Hoptroff, R. Data Mining and Business Intelligence: A Guide to Productivity. London. Idea Group. 2001. p56. This model was originally developed to help manufacturers achieve quality goals by minimising variance to (+/- 3) deviance around a sample mean. For marketing, this means ensuring that customers on the whole, consume a constant number of tins of baked beans, for instance, with minimal variance.

28. CRM Spend Continues on Falling, The Register. 7th February 2003. Available at: http://www.theregister.co.uk/content/archive/29238.html

29. Quoted in: London, S. op cit.

30. IBM advert. Daily Telegraph. July 23rd 2003. p5.

31. See: Cameron, A. Dissimulations. Hypermedia Research Center, University of Westminster. London. Available at: http://www.hrc.wmin.ac.uk/theory-dissimulations.html

32. See: Kudyba & Hoptroff. op cit. p27 This describes a number analytic techniques that, combined, drive the marketing offerings given. I illustrate them here to indicate how segmentation is crucial to many data mining techniques:

‘N the total number of orders.
ni the number of orders in which product i is bought.
Xy the number of orders in which both products i & j are bought.
Support Sijmeasures the percentage of customers who buy both products i & j and is calculated as:
Sij = Xij/N*100%’

Confidence Ci >j measures the percentage of buyers of product i who also buy product j and is calculated as:
Ci >j = Xij/ni * 100%’

In practice, a combination of analytic procedures would be used to asses the economics of the marketing action. See also the section on price discrimination in section: Loyalty, Privacy and Economics

33. Hand, D. J. Principles of Data Mining. Cambridge, Mass. MIT Press. 2001. p7.

34. Ibid. p2.

35. Schaffer, S. OK Computer, in Michael Hagner (ed.), Ecce Cortex: Beitraege zur Geschichte des modernen Gehirns, Wallstein Verlag, 1999, pp. 254-85. English trans. available at http://www.hrc.wmin.ac.uk/theory-okcomputer.html

36. Ibid.

37. Shabi, R. The Card Up Their Sleeve. The Guardian Weekend Magazine.19th July 2003. p14.

38. Ibid. p14.

39. Loyalty Marketing: A Retailer’s Perspective. An Interview with Lavonne Kipp, Loyalty Marketing Manager, SUPERVALU. Consumer Insight Magazine. Available at:http://acnielsen.com/pubs/ci/2000/q3/features/loyalty.htm

40. Shabi. op cit. p19.

41. Customer Relationship Management Survey. Chartered Institute Of Marketing. London 2000.

42. Zuboff & Maxim. op cit. p264.

43. Lowenstein. Op cit.

44. Vanderlippe , J. Everyday high prices: A comparison of standard supermarket prices. CASPIAN. Available at: http://www.nocards.org/savings/regular_price_study.shtml

45. Store op cit. p10.

46. The recent closure of a number high street outlets by UK electronic goods retailer Dixon’s was blamed in part on internet commerce. The other factor was the advance of large format supermarket retailers into new markets. See: ‘Ryle, S. ‘Specialists all over the shop as Big Two bite’ The Guardian May 2nd 2004. Available at: http://observer.guardian.co.uk/business/story/0,6903,1207742,00.html

47. The Store. op cit. p 95.

48. Zuboff & Maxim. op cit. p264. Quoting: Boslet, M. CRM: The Promise, the Peril, the Eye Popping Price. Industry Standard. August 6th 2001.

49. CRM ‘recovery’ predicted for 2003. ComputerWire. December 17th 2002. Available at The Register: http://www.theregister.co.uk/content/archive/28591.html

50. Getting Value from Enterprise Initiatives: A Survey of Initiatives. Boston Consulting Group Report. March 2000.

51. Boslet. op cit. pp. 61-65.

52. Odlyzko, A. ‘Privacy, Economics, and Price Discrimination on the Internet.’ Digital Technology Center, University Minneapolis. 2003. Available at http://www.dtc.umn.edu/~odlyzko/doc/privacy.economics.pdf

53 Ibid p14 for a good illustration of bundling.

54. Interestingly, the rate of decline of costs has diminished considerably over the last 4 years. Strategic Review of Telecommunications Phase 1 Consultation. Annex H. Ofcom. 28th April 2004. Available at: http://www.ofcom.org.uk/consultations/current/telecoms_review/annexh/?a=87101

55 Although in the case of telephony costs in the UK the role of the state regulator has been crucial in reducing costs to the consumer.

56 Zuboff and Maxim. op cit. p93-117.

57. Coughlan, S. Easy Money. The Guardian. October 26th 2002. ‘Last month, re-mortgages were at their highest level this year, with £7.6bn representing 39% of mortgage lending. If you wound the clock back to 1997, re-mortgaging was only 17% of lending. And in 1999, it was still less than a quarter.’

58. Carvel, J. 7 Year High For Divorce Rates. The Guardian. 29th August 2003. ‘But in 2002 the number of divorces increased by 2.7% to 147,735 – the highest annual total since 1996. This took the divorce rate from 13 divorcing people per 1,000 married people in 2001 to 13.3 in 2002.’

59. Painter, A. The Observer. Jan 27th 2002. ‘Robin Cook, the reformist Leader of the House, has proposed internet voting as one way to raise the turnout amongst 18-24 year olds from just 40%’.

60. Papworth, J. Credit boom, then going bust. The Guardian. May 24th 2003. ‘Citizens Advice Bureaux advisers have seen an alarming 47% increase in new consumer credit debt problems over the last five years.’

61. Ridderstralle, J. Nordstrom, K. Funky Business. 2nd Ed. London. Prentice Hall 2002.

62. Putnam, R.D. Bowling Alone. London. Simon & Schuster. 2000.

63. Lefebvre, H. Everyday Life In the Modern World. p72.New Brunswick. N.J. Transaction Books. 1984.

64. Ibid. p68.

65. Ibid. p90.

Within this MySpace version of the electronic agora, cybernetic communism was mainstream and unexceptional. What had once been a revolutionary dream was now an enjoyable part of everyday life.