I was overseen to have said

An IT Conversations interview on Framing the Net. At eComm 2009.

On how free customers are more better than captive ones. At The Ideas Project. I spoke in closer to final draft than usual here. A transcript. Some samples:

  • What we’ve had since companies won the Industrial Revolution is the belief that a captive customer is more valuable than a free one. We never knew what a free customer was. We never encountered one. The Internet makes that possible; the Internet sets customers free. Free customers are far more capable of providing intelligence to companies than captive ones are.
  • …’free range’ customers are going to be coming at companies, telling them things that the old dairy-system cattle chutes never allowed customers to say before. That’s going to be good for companies; it’s going to be good for CRM systems…
  • …it would be really great if we had our own terms of service. When you walk into a store, you have great terms of service. You look like a good customer; you’re wearing a blazer. It doesn’t matter if you’re wearing jeans; you might actually buy something. They don’t want your identity. They don’t want you to become a member, or anything else like that, in order to spend your money and be a loyal customer. In fact, you’re more likely to be a loyal customer if they don’t interrogate you and make things difficult for you. The way CRM systems tend to work, especially online; they want to scrape up as much data about you so they can spam you later with guesswork about what you might want. It’s almost always annoying, and give you surveys which are almost always a bad guess at what you want.
  • VRM, which is vendor relationship management, (is) the reciprocal of customer relationship management. It’s where the customer controls their information. We become, as a customer, the integration point for our own data, our transaction histories, our credit histories, our preferences, and then the origination point for the way those are used.
  • Advertising is fundamentally flawed. It’s flawed because it’s guesswork. It’s flawed because it’s monologue. It’s flawed because the systems in place are predicated on a whole bunch of assumptions that elevate guesswork to an art. In the meantime, the customers are out there with actual demand, money on the table, ready to buy, for something.

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  1. judi clark’s avatar

    Loved this. Each piece (5 in all) was accessible, whole video (5 minutes) is informative in a visceral way. My review:

  2. Russ Nelson’s avatar

    Two things: First, that a railroad user is the ultimate captive customers, chained to the railroad with two steel ribbons. I’ve not ever heard of anybody who enjoys having a sole supplier. e.g. when I worked for HP designing chips, we needed a CMOS power supply to replace the bipolar one we were buying in from a sole-source supplier. We were having a 25% incoming inspection rejection rate and were having trouble getting them to take us seriously. Once we’d gone to first silicon on the 1LB3, they put a production engineer on our chip.

    Second, that: if you’re not going to advertise your new project, how do you tell people about it? People are only asking about *existing* products. The whole point behind being an entrepreneur is that you can conceive of filling someone’s unmet need — a need they may not yet have realized they have and one they haven’t thought to ask for through their VRM system.

  3. David Locke’s avatar

    VRM systems just provide vendors with the need to develop counter-VRM systems. It’s an arms race.

    Without exit barriers, its time to migrate to a new industry. So goes SaaS.

  4. Doc Searls’s avatar

    Russ, I’m not suggesting either that innovation or advertising cease. I am suggesting that the whole point of being a customer is not ‘your choice of captor,’ but rather to have the best ways of expressing demand. We don’t have those yet. That’s what we’re working on.

    David, I can’t match what we’re doing with VRM to what you say in your first sentence. On the second, there are plenty of industries we need migrating from. Would we rather have an open Net, and open email, or a choice of Compuserve, AOL or Prodigy?

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