Last night my wife asked me what we mean by “Free customers are more valuable than captive ones” and “equipping customers with tools of independence and engagement”. I thought about it and said, “Knights are more valuable than serfs.”
When a company speaks of “capturing”, “acquiring”, “owning” and “locking in” customers, they’re treating customers like serfs. What we want to do with VRM is make customers into knights: to arm them with status, respect, armor and weapons. But not to do battle against sellers and their fortifications. Instead, customers and sellers both need to fight against ignorance surronding the idea that the ways they can engage should be limited to the relatively few imagined by today’s CRM systems.
I’ve noticed a change in the last few months at the CRM wikipedia entry, and at CRM company websites. It seems to me that the CRM business is getting back to its original ambitions, which were all about understanding and helping individual customers — and improving the seller’s offerings in the process. There’s a limit to what can be done only from the sell side, or from researching groups rather than engaging individual customers. Some of the relationship burden needs to be borne by the buy side, by individual customers. They need tools of engagement for that. So it’s VRM + CRM, not VRM vs. CRM.
Which brings me to Paul Greenberg’s CRM 2009 – Part 2.1 – Can’t Believe I Forgot These (in which he adds two items to his 2009 CRM forecast). They are: “(8) “Feedback 3.0″ will become an intimate feature of most companies’ customer strategy” and “(7)Vendor Relationship Management (VRM) releases its first tools for the customer in 2009”. Here’s what he says:
For those of you who don’t know, VRM is something that has been on the table for a long time and has been championed by Cluetrain Manifesto writer and Web pioneer, Doc Searls. I call it the “labor movement” for customers. It is the customer’s side of that conversation control we’ve been talking about. A VRM tool, thus is one that is unlike a CRM 2.0 tool. A CRM 2.0 tool would be something a vendor produces for the benefit of a company to engage its customers. A VRM tool would be something the customers would use to control how they relate or any or multiple vendors. If you’re interested in this thinking, go to the Project VRM wiki at Harvard Law that Doc Searls, an amazing dude, runs and read up. Worth your involvement with. But the one thing that has had me a little concerned (as an ardent VRM believer) is that there haven’t been much in the way of tools that have at least been produced and labeled as VRM related. One of the first that can be applied as a VRM tool, though not called as such, and a great one to start, is Cerado’s Ventana – a mobile social aggregation tool that’s used by companies and customers – it has a hybrid kind of approach. Take a look at its uses here. But there isn’t much else. I think that 2009 will begin to see the evolution of the tools of what is already an established body of thought becoming increasingly accepted. But the tools need to come and this year is the year they will.
This is a good call. It’s also why we’ve been cautious about publicizing what the community is up to. There is in fact much work going on — around peer-to-peer relating, search, personal data stores, paychoice (where the buyer pays what they want, on their terms, for goods that are otherwise free — such as podcasts, broadcast programs and music), and symbols representing actions and relationship states. This next year we should see ProjectVRM get beefed up at the Berkman Center, the start of serious research around some of VRM’s core theses, and the formation of an independent nonprofit centered on VRM. (One model for this is Creative Commons — a concept that was the brainchild of Larry Lessig, back when he was at the Berkman Center).
We’ll also see more VRM workshops, on the East and West coast of the U.S. and in Europe. Some will be focused on vertical categories such as VRM+CRM.
So stay tuned. It’s going to be a fun year.
Knihts and serfs focusses the mind I guess. But there’s probably something about the fre citizen of a democracy vs the cowed subjects of a totalitarian state.
The designer Ivo Gormley just made a wonderful film here in the UK called “Us Now” about participative, user-driven decision making with examples like Ebbfleet Utd, a football (that’s “soccer” to you, dear cousins) club owned by the fans who select the team online. Like Championship Manager for real. The killer moment is when a government Minister is enthusing about all this, but is then flummoxed about how to put into words the effect this has on the role of government.
So do bear in mind, as you pioneer this great change, that it affects participative society as much as it affects buying and selling.
(I know you know that Doc, because you told them when you came over here! It was great to meet you!)
Great to meet you too, William, and to get such enjoyable and high-leverage hang-time.
Here’s the Ebbsfleet link. (Sorry, I mistakenly marked your corrective post in haste as spam and don’t know how to retrieve it. Hope this does the correction you wanted.)
Agreed about the participative stuff, and about the role VRM (or fill-in-the-blankRM) will play in governance, with nonprofits, and in other noncommercial contexts.
What I wish to avoid is starting with the collective: with aggregated power, with group buying, and so on. Those are good things, and VRM will play a role in them. But to start with the collective risks missing the need to equip the individual. And it’s with the individual that I want us to start.
“it affects a participative society” – and that is why I would like to ensure that we include the possibility of responsive Government. Organisations that can respond intelligently [I still believe this is not an oxymoron] can improve responsivess, effectiveness and efficiency. The example of flu discussions used to alert UNAID and adapted by Google for their flu alerts is just one of new capabilities that we can see. Pandemic alert and monitoring techniques can also be applied to economic and service assessments. Guerilla Intelligence mated with an actual client focus through VRM offers an exciting way of implementing Service Transformation in Government – arguably the basic theme enablers. (Sorry about using the term ‘enablers’ – I still revert to ‘synergy’ sometimes). From a Government and non profit sector, tools that do more than classify contacts by more than just ‘how much profit is involved with this contact’ are not only MIA but causing major issues with their absence. Imagine how many professional groups and working groups there are that need a better way to work with their membership.
I agree with the sentiment of ‘knights are better than serfs,’ but is that really true for the royal family? I want it to be true, but I’m just wondering. Is there an easy example of where VRM-empowered customers create a net benefit for companies?
To play out your metaphor much farther: I can see the benefit to a lesser noble looking to move up in ranks. By allying himself with knights (by being responsive to their unmet demands as expressed through VRM), he is able to expand into territories occupied by less responsive lords. But to the king? It seems like a net loss of control.
VRM is an interesting beast for me. I understand the concept, but I have a hard time imagining how it will benefit the vendors. If 2009 is the year for VRM, then I hope to see what all the fuss is about.
Right. Me too, Anh: how does it really benefit the vendors?
EnterpriseWizard CRM is a very bendable web based customer support product that allows you to customize both the user interface and the way the program behaves.
It is designed to efficiently serve a large number of customers, and administration is easy but resourceful. The most important feature for us has been the ability to quickly customize the product to assure our customers’ needs. We have liked EnterpriseWizard from the very first time we saw how it works. We looked into other solutions, but none of them seemed up to par. We have already exploited EnterpriseWizard’s bendable architecture.
Hey, just learning about VRM at the moment, so forgive any ignorance, but I felt I might be able to chip in here regarding why vendors need VRM.
My reasoning is slightly negative, but – VRM isn’t just a process for you to adopt, its a wider reflection of how society is changing. You may just have to adopt VRM practices whether you want to or not, to avoid losing out.
You are correct that VRM is a reflection of changes in society. It’s important to note that those changes are occasioned — an in many ways caused — by the growth of the Internet, and the increase in means for people to interact easily and at near-zero cost. Significantly, it provides many more ways for buyers and sellers to interact, often at the human level.
Still, the means are mostly provided by sellers, and in many different ways. There are few tools, other than cash and third party conveniences such as payment systems (e.g. credit cards and paypal) that provide customers with simple and consistent means of relating to many vendors.
One way of simplifying the problem is to imagine that every vendor has its own form of cash, its own credit system, its own contained ways of “owning” (and that’s the term they use) the customer. Actually, we don’t have to imagine that. It’s already here in the form of coupons (a form of private currency) and loyalty cards.
Wouldn’t it be better if each of us had, say, our own loyalty system? Rather than carrying around a pile of cards and keychain accessories for every grocery and book store that calls us a “member,” we would have one way of expressing our “loyalty” (and keeping track of our interactions) with many of these outfits.
That’s what VRM will do. It will provide customers with means to become independent of vendor control yet better able to engage with vendors on terms better than the “take it or leave it” system in place now.