On the Customer as Enemy - part 3

The Notion of Customer #9

A mega-shift in the way that Business operates has been underway for some years. That much is surely obvious. However, on the grounds that Business has never stood still for long, you may say, “So what? Business constantly adapts to, and evolves with, changes in Society and Technology.”

But there are shifts and there are Shifts. The difference is that, whereas a (lower case s) shift is an incremental change-improvement to an existing practice, a (capital S) Shift involves radical change of some sort - not so much a new way of doing something, more a new something to be doing.

What we are concerned with at the moment is a Big S shift (or, at least, an attempted one) and, as outlined in Part 1 and Part 2 on this topic, I argue that Business in general and Marketing in particular have, wittingly or unwittingly, mimicked the thinking that Frank Hoffman identified which, in 2007, led him to coin the term Hybrid Warfare. Here, again, is the core of that proposition …

The logic of Hybrid Warfare …

1. In the 21st century wars are not won or lost exclusively on the battlefield.

2. They are also won or lost through informational spaces (specifically social media).

3. Therefore, domination of information spaces is a means to military victory.

… and the Business (primarily Sales & Marketing) equivalent:

1. In the 21st century customers are not won or lost exclusively in the marketplace of products and services.

2. They are also won or lost through informational spaces (specifically social media).

3. Therefore, domination of information spaces is a means to commercial success.

In Part 2 on this topic I gave examples that demonstrate this phenomenon in action: the Coutts Bank (NatWest) debacle over their customer, Nigel Farage; Gillette’s (P&G) toxic masculinity commercial of 2019; Bud Light (Anhauser Busch) commercials re trans’ acceptance; and, in 2024, the North Face clothing company’s use of an online course to determine a customer’s worthiness, or not, for a discount, based upon that customer’s views about racial equity.

There was also a clear example of the ‘new’ attitude, from 2023, when the COO of UK home improvement and gardening centre chain, Wickes, told a conference that customers who hold gender-critical views are “not welcome in our stores”. Plus, of course, there is the bizarre circumstance of an owning company, Unilever, having to legally challenge the behaviour of a subsidiary, Ben & Jerry’s ice cream, in order to stop it using political views about Middle East politics to determine product availability.

The more than $64,000 Dollar Question is, Is this shift to far greater politicization an ongoing feature of future Business?

‘Time present and time past / Are both perhaps present in time future / And time future contained in time past.’

The above cross-head is the first three lines of Burnt Norton, the first of T.S. Eliot’s Four Quartets. Let’s test the thesis. To do so, I’d better state my basic proposition upfront:

1. Warfare is a basic and ongoing feature of human communities.

2. Warfare relates directly to constitutional issues and to the way we operate our societies.

3. The way we operate our societies includes the way we operate Business.

To elaborate this, I’ll draw on the work of American legal scholar and political theorist, Philip Bobbitt, with reference to his book The Shield of Achilles: War, Peace and the Course of History.¹

Reviewing Western history from around 1500, Bobbitt identifies six epochs, defining the constitutional orders, epochal wars, international orders (treaties), key strategic innovations, and bases of legitimacy for each.

Here are the six epochs, the international orders that established their legitimacy, and the basis of that legitimacy in each instance, as identified by Bobbitt:

1. Princely State (1494-1572) Peace of Augsburg (1555)
   The State confers legitimacy on the dynasty.

2. Kingly State (1567-1651) Peace of Westphalia (1648)
   The dynasty confers legitimacy on the State.

3. Territorial State (1649-1789) Treaty of Utrecht (1713)
   The State will manage the country efficiently.

4. State-Nation (1776-1870) Congress of Vienna (1815)
   The State will forge the identity of the nation.

5. Nation-State (1861-1991) Treaty of Versailles (1919)
   The State will better the welfare of the nation.

6. Market-State (1989 on) Peace of Paris (1990)
   The State will maximize the opportunity of its citizens.

If we now turn our attention specifically to Business, note that what is generally reckoned to be the first ‘manufactory’ in the world, the water-powered Cromford Mill in Derbyshire, England, was built by Sir Richard Arkwright and opened in 1771 - that is, as a harbinger of the State-Nation.

Thereafter, of course, from 1776, there were huge changes: two great documents were published in that year; the American Declaration of Independence and Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations. Business took off:

Once the Industrial Revolution was in motion, a long series of consequences ensued. In the purely economic sphere, the growth of the money economy turned self-sufficient peasants into wage-earners, consumers and taxpayers, each with new demands and aspirations.²

This hints at the next key factor: the expansion of commerce in the second half of the nineteenth century coincided with the rise of the Nation-State as the dominant constitutional order across the western world. At this time, the United States of America, Germany, Italy and more joined the list of Nation-States and found, in the business corporation, the perfect partner for success. As previously stated, the legitimizing basis of the nation-state was …

The State will better the welfare of the nation³

… and the business corporation was its indispensable ally. Its indispensable ally for tax revenues on business profits. Its indispensable ally for the provision of jobs to bring prosperity to the citizens of the Nation-State. Its indispensable ally to produce tax revenues from those employed, directly and via sales taxes. Its indispensable ally to produce tax revenues to finance welfare payments and retirement benefits. Bobbitt again:

“[T]he corporation was a nation-state vehicle to improve the welfare of its citizens. Replacing the great trusts and partnerships of the state-nation, the corporation bureaucratized the management of business, making it feasible for the State, through regulation, to temper the profit motive with concern for the public welfare, replacing the enterprising if ruthless entrepreneur with the modern manager.”⁴

Nation-States came to depend more and more upon corporations and their Customers for their wealth. With reference to the Depression years of the 1930s, the authors of a book on World’s Fairs wrote:

Progress, in addition to its other definitions, now meant increased consumer spending as world’s fair sponsors tried to persuade Americans that they had to set aside older values such as thrift and restraint and become consumers of America’s factory and farm products. By rebuilding America’s domestic market, so the argument ran, consuming citizens could hasten America’s economic recovery and put the United States back on track toward fulfilling its utopian potential.⁵

Thus, Business as a Nation-State promoting mechanism became a long-standing feature of everyone’s lives. Made in Britain. Made in France. Made in America. These tags and more were part of the late-nineteenth and twentieth century world. But they were hugely undermined when, particularly in the two decades from 1990 to 2010, Western countries de-industrialized by outsourcing their manufacturing. This, the conversion of western countries from Nation-State to Market-State, was absolutely turbocharged when, in 2001, China was admitted to the World Trade Organization.

In the market-state, the marketplace becomes the economic arena, replacing the factory. In the marketplace, men and women are consumers, not producers (who are probably offshore anyway).⁶

Well, we probably all recognize that! Ironically, when the West de-industrialized, other countries took up the cry. We are all no doubt aware of the ‘Made in China’ labels that have proliferated beyond all expectation on everything from socks to saucepans to satellites and, from September 2014, India has enthusiastically pursued its global ‘Make in India’ initiative.

Questions, questions, questions

• Ironically, at the same time, there are various campaigns in the West (not least the MAGA campaign led by a certain U.S. personality!) to try to bring life back to once vibrant industrial areas. Is this practical or just nostalgic wishful thinking?

• What does it all mean for the Customer-Supplier dynamic here in the West. And how does the reality of the Market-State square with Philip Bobbitt’s suggested basis of legitimacy that “The State will maximize the opportunity of its citizens”?

• And what is the relationship, if any, with military strategy and warfare?

I’ll pursue these questions further next time. But, for now …

Riddle me this

In response to Part 2 of this series, my friend

Jef Teugels

who writes the excellent

Flourish & Prosper by Jef

commented that, if an enterprise treats some customers as enemies it must actually dislike itself. Here’s how he described the issue:

Peter Drucker was right when he said that a customer and a business are joined at the hip. If it's ultimately the customer who decides what a company is, what it does, etc., then any attempt to take the customer out of the equation is nothing short of amputation. By not acknowledging the existential role of the customer in a business (and alas, this happens too often), one denies the business of its vital reason to exist. It exists, therefore, for other reasons and depends on the "customers buying from us anyway" dynamic it has little control over and which has no foundations.

I’d like to think that this is true. Up until a metaphorical yesterday I would have said that it was. But, now, I’m not so sure. As outlined earlier, we prised apart the strong ties that, for a very long time, held Polity, Society and Business together and, in the process, gave meaning and vibrancy to our Nation-States. Now, the Market-State environment works well for the ‘haves’ but nowhere near as well for the ‘have-nots’.

And, boy, what power we have gifted to major corporations! These global behemoths are often richer, far richer, than the old Nation-States. They bestride the world and perhaps they do now see it as part of their role to tell us all what is right and wrong … even to the extent of chastising actual customers or prospects for thoughtcrime and wrongthink?

Is the Orwellian allusion justified? Well, here’s a commercial by Ariel India (a Procter & Gamble brand) promoting the hashtag #SharetheLoad and devoted to getting men (those pesky goddam men, again!) to help with the household laundry. This, we would probably all agree, is a benign use of these tactics, but is there cause to worry that it might ultimately lead us into rather more murky water?

Thanks for reading.

Image at top: Shutterstock

1. Bobbitt, Philip. The Shield of Achilles: War, Peace and the Course of History (2002)

2. Davies, Norman. Europe, A History (1996)

3. Bobbitt, Philip. Ibid

4. Bobbitt, Philip. Ibid

5. Rydell, Robert W., Findling, John E., Pelle Kimberley E. Fair America - World’s Fairs in The United States (2000)

6. Bobbitt, Philip. Ibid