Joe: Most businesses think their biggest threat is the competition. They're wrong. The real killer is already inside their customer base, and they don't even see it coming. It's a generation that actively dislikes doing business with them. Lewis: Whoa, that's a bold way to start. So you're saying the call is coming from inside the house? That the very people companies are trying to sell to are the ones who will put them out of business? Joe: Precisely. And that's the terrifying premise at the heart of Build for Change by Alan Trefler. Lewis: Alan Trefler... isn't he the billionaire CEO of that software company, Pegasystems? I heard he's also a world-class chess master. Joe: Exactly. And that's the perfect lens for this book. He thinks about business strategy like a chess grandmaster, seeing moves and threats that most people miss. He argues that for decades, companies have been playing checkers, but they're now facing a new generation of customers who are playing 3D chess. Lewis: And the old rulebook is useless. I like that. So what's this checkmate threat that nobody sees coming? Joe: Trefler gives it a suitably epic name. He calls it the "Customerpocalypse."

Lewis: Okay, I have to admit, 'Customerpocalypse' sounds a little dramatic. Is this just a catchy buzzword, or is there a real phenomenon here? It feels like every few years we get a new label for young people. Joe: It’s more than a label; it’s a fundamental rewiring of power. Trefler points to the cautionary tales of giants who thought they were invincible. Take Circuit City. In the early 2000s, they were a titan of electronics retail. But they started making decisions based on what Wall Street wanted, not what their customers needed. They famously got rid of their most experienced, and therefore most expensive, salespeople to cut costs. Lewis: A classic short-term move. Let me guess, customers who wanted actual advice went elsewhere? Joe: They fled. The company’s own former CEO, Alan Wurtzel, said it best after the collapse. His reflection was, "One of the lessons of the book is listen to the customer, not listen to Wall Street." They had the data, they had the market share, but they ignored the human element. They forgot who they were serving. Lewis: And they went bankrupt in 2009. That’s a powerful example. But that was about bad management. What about a company that was at the top of its game, technologically? Joe: Even better example: Nokia. Remember them? For over a decade, they were the undisputed king of mobile phones. They were a Finnish powerhouse, a source of national pride. In the late 2000s, they had brilliant engineers. They even created a device that was functionally similar to the iPhone years before Apple did. Lewis: Wait, really? They had an iPhone-like prototype and just… sat on it? Joe: They sat on it. Because their leadership was so focused on technical specifications and their existing brand strength, they couldn't see the forest for the trees. When the iPhone launched, Nokia's executives publicly mocked it. They said it wasn't a good phone because the battery wasn't replaceable and it would break if you dropped it. They were judging it as engineers. Lewis: But they completely missed the point. People didn't buy the iPhone for its technical durability. They bought it for the experience, the delight, the ecosystem. Joe: Exactly. Trefler argues this is the core of the Customerpocalypse. A new generation of customers emerged—he calls them Gen C for 'Connected' and, more importantly, Gen D. The 'D' stands for a few things: Digital, Demanding, and most critically, Discover, Devour, and Demonize. Lewis: Okay, break that down. 'Discover, Devour, Demonize.' That sounds like the life cycle of a monster from a video game. Joe: It's a perfect analogy. Gen D doesn't want to be sold to. They want to discover things on their own, through friends, through influencers, through authentic experiences. Think of a brand like Lush Cosmetics. People don't see a TV ad for it; they smell it from down the block, they see a friend's post about a bath bomb, they walk in and it’s a sensory experience. They feel like they found a secret. Lewis: Right, the discovery feels personal. It’s their find. And 'Devour'? Joe: Once they discover it and love it, they devour it. It becomes part of their identity. That young woman in the book described Lush as "a lifestyle, actually." It’s not just soap; it’s a statement about her values—ethical, natural, authentic. Lewis: Okay, but what about 'Demonize'? That's the scary one. Joe: That's the power shift. If a company breaks their trust, wastes their time, or treats them like a number, Gen D will demonize them instantly and globally. A single bad experience can be tweeted, filmed, and shared with millions before the company’s PR department has even had their morning coffee. Remember the "United Breaks Guitars" video? One guy with a guitar and a YouTube account cost a massive airline a fortune in stock value and reputation. That’s the power of Gen D. They have the tools to turn your brand into a villain overnight. Lewis: So the Customerpocalypse isn't an asteroid hitting the planet. It's millions of tiny, individual customer decisions and social media posts that, in aggregate, can bring a corporate giant to its knees. Joe: And the old defenses—brand loyalty, advertising budgets, market dominance—are becoming increasingly useless against it. As one analyst said about the bookseller Borders when it was failing, "Loyalty is never enough."

Lewis: Alright, so if the old ways of brand-building and customer service are broken, the modern answer is always 'data,' right? Every consultant, every tech company, is selling the dream of the '360-degree view of the customer.' Collect every click, every purchase, every interaction, and you'll know them better than they know themselves. Joe: And that, according to Trefler, is one of the most dangerous traps in modern business. He argues that data, especially when used without judgment, can be deadly. He has this brilliant line: "Data is only memory." It's a record of the past. It can't tell you about intent, context, or desire. Lewis: Hold on, that feels completely counter-intuitive. Every company I know is desperately trying to get more data. How can that possibly be a bad thing? Joe: Because it can lead to what Trefler calls 'data suicide.' Companies become so obsessed with the data they have, they make decisions that are logically sound from a spreadsheet's perspective, but are utterly insane from a human perspective. The book gives this absurd but real example from Ryanair, the budget airline. Lewis: Oh, I'm ready for this. Joe: In 2010, they announced a plan to charge passengers to use the bathroom on their flights. Their spokesperson actually said, and I quote, "By charging for the toilets we are hoping to change passenger behaviour so that they use the bathroom before or after the flight." Lewis: (Laughing) You cannot be serious. That's not changing behavior, that's punishing people for having basic human biology! That’s a decision made by an accountant who has never met a human being. Joe: Exactly! It's pure data-driven logic, divorced from reality. The data says, "Bathroom usage costs us cleaning and maintenance time, which reduces profit." The logical, data-driven solution is to disincentivize usage. But it completely ignores the customer experience, dignity, and the inevitable public relations firestorm. They had to scrap the plan, of course. Lewis: That’s a comical example, but what about when it gets less funny and more… creepy? Joe: That's the other side of the coin. Trefler brings up the now-infamous story of Target's pregnancy prediction model. Their data scientists figured out that by tracking purchases of about 25 different products—like unscented lotion, certain vitamin supplements, cotton balls—they could assign a 'pregnancy prediction' score to a shopper with terrifying accuracy. Lewis: I think I know where this is going, and I'm already uncomfortable. Joe: It gets worse. They started sending targeted coupons for baby items to these customers. One day, an furious father storms into a Target in Minneapolis, demanding to see the manager. He's holding a handful of coupons for cribs and baby clothes that were mailed to his high-school-aged daughter. He yells at the manager, "Are you trying to encourage my daughter to get pregnant?!" Lewis: Oh, man. The manager must have been mortified. Joe: He was. He apologized profusely. But then, a few weeks later, the manager got a call from the father. And the father was the one who was apologetic. He said, "I had a talk with my daughter. It turns out there’s been some activities in my house I haven’t been completely aware of. She’s due in August. I owe you an apology." Lewis: Wow. So the data was right. But being right isn't the same as doing the right thing. That's a massive violation of privacy. It's creepy. Joe: It's the definition of creepy. And it perfectly illustrates Trefler's point. The '360-degree view' of the customer is a flawed concept because it sees the customer as a collection of data points, not a person in a web of relationships. It saw a pregnant girl, but it was blind to the father, the family context, the emotional sensitivity. It was a data success and a human failure. Lewis: So if the 360-degree view is a lie, and just gathering more data can lead you down these absurd or creepy paths, what's the alternative? Are we supposed to just go back to guessing? Joe: That's the billion-dollar question. And Trefler's answer is that you don't ignore data, you add judgment and desire. You have to fundamentally change how your entire organization thinks and builds.

Lewis: Okay, so we've established that the old ways are broken and the new way—just throwing data at the problem—is also a trap. This feels like we're stuck between a rock and a hard place. What's the way out? Joe: The way out is what Trefler calls the 'Digital Imperative.' It's a radical reinvention. It's not about buying a new piece of software; it's about becoming a software company yourself. Not in the sense of selling code, but in the sense that your business processes, your customer interactions, your entire operational DNA is your software. Lewis: That sounds incredibly abstract. What does that actually look like in practice? Joe: It boils down to three core principles. First, democratize how you do technology. For decades, businesspeople had an idea, wrote it down in a 500-page document, threw it over the wall to the IT department, and 18 months later got back something that was obsolete and not what they wanted. Lewis: The classic, painful waterfall development process. I've heard the horror stories. Joe: Democratizing means giving the businesspeople the tools to build and change the processes themselves, using business language, not code. It means the tech experts focus on building the stable, secure 'plumbing,' while the business experts design the 'rooms' and 'experiences' that customers actually interact with. Lewis: So you're closing the gap between the people who know what the customer needs and the people who build the system. That makes sense. What's the second principle? Joe: Think in layers. This is a bit more conceptual, but it's crucial. Most systems are built flat. A rule is a rule. "If customer has X, then do Y." But reality is layered. A customer isn't just a customer; they're a customer in a specific country, with a specific product, using a specific channel, with a specific history. Thinking in layers means building systems that can handle that complexity and personalize the experience, not by writing a million different rules, but by having a core process that adapts based on the layers of context. Lewis: So it's the difference between a one-size-fits-all t-shirt and a tailored suit. The suit has the same basic components—sleeves, collar—but it's adjusted for the individual. Joe: Perfect analogy. And the third principle ties it all together: Use analytics to optimize continually. But not just to look at the past. You use them to test hypotheses in real-time. "We think customers in this segment will respond to this offer. Let's try it on a small group. Did it work? Yes? Great, expand it. No? Okay, the system learns and adapts." It's a living, breathing system, not a static report. Lewis: This all sounds great in theory, but it still feels like it requires a level of genius or a supercomputer to pull off. Joe: And that's the most beautiful part of Trefler's argument. It doesn't. He tells this incredible story about a 'freestyle' chess tournament held online. In this tournament, anyone could compete—grandmasters, amateurs—and you were allowed to use computers to help you. Lewis: So the winner must have been a grandmaster with a supercomputer, right? Joe: You'd think so. But the winner was a pair of amateur American chess players using three ordinary, off-the-shelf computers. They beat teams of grandmasters with far more powerful machines. Lewis: How is that even possible? Joe: Because their skill wasn't in being the best chess players. Their skill was in coaching their computers. They knew how to manage the process. They knew which questions to ask the machines, how to guide their analysis, and when to trust their own human intuition over the computer's suggestion. The key takeaway was this: a weak human, plus a machine, plus a better process was superior to a strong human with a machine and an inferior process. Lewis: Wow. Okay, now I get it. So the 'Digital Imperative' isn't about having the fanciest AI or the most brilliant data scientists. It's about empowering your regular businesspeople—the ones who actually know the customers—with good-enough tools and a superior process so they can 'coach' the technology to get the right outcomes. Joe: You've nailed it. It's not about getting humans to think like computers. It's about building systems that augment human cleverness and imagination. It’s about becoming a software company with a soul.

Joe: So, when you pull it all together, Trefler's message is both a warning and a roadmap. The 'Customerpocalypse' is real, driven by a generation that values authenticity and control above all else. And the common response—hoarding data—is a dangerous trap that can lead to decisions that are creepy or just plain stupid. Lewis: And the only way through is to fundamentally change your organization's relationship with technology. It’s not a tool you buy; it's a capability you build into your culture. That freestyle chess story is going to stick with me. It’s so hopeful, in a way. It says you don't have to be a tech genius to win; you just have to be smarter about how you work with the tech you have. Joe: Exactly. In the end, Trefler's ultimate point is that your company is its software. In our digital world, the systems and processes you use are the most tangible expression of your brand. They are the living embodiment of how you treat your customers. And in the age of the Customerpocalypse, you can't afford to outsource your soul to a disconnected IT department or a flawed dataset. Lewis: That's a powerful thought. It makes you wonder, if your company was a piece of software, would your customers love using it, or would they be desperately searching for the uninstall button? Joe: A question every leader should be asking themselves. We'd love to hear what you think. Drop us a comment on our socials and let us know your experience with companies that just 'get it' versus the ones that are still stuck in the past. Lewis: This is Aibrary, signing off.