VRMomentum

Thanks to a question from , VRM is now on the radar of , a business consulting group I have followed and respected for nearly two decades. Much of what we’re doing with VRM is right in line with what Peppers & Rogers have been writing and talking about for the duration, so I’m not surprised to see them groking VRM in just one pass. Responding to Rebecca, posted VRM: Next Destination in Technology’s March?, where he says this:,

Think about it: “Management” is synonymous with control or direction by someone, while “social” represents an inherently collective, non-managed value. Trying to describe “social CRM” in other words, is something like trying to describe “citrus watermelon.” And in fact, many of the pioneers in SCRM are finding that in order to have any traction at all in social media they must first give up control – that is, they must admit that they cannot by themselves “manage” the process or its outcomes.

But the VRM idea may just describe the next destination in this march of technology. In our view, VRM makes the most sense for consumers when the process involves highly personal computers with mobile applications that allow consumers to mange their own information more directly, even as they continue to participate in the economic system, buying products and services and putting them to use.

Whether VRM actually takes root or not, however, depends on whether the right intermediaries spring to life to facilitate it. In The One to One Future, back in 1993, we speculated that eventually a form of business would emerge that we termed a “privacy intermediary.” This would be a business that would collect an individual’s personal information and use it to extract the best possible deal from a vendor while protecting the person’s privacy – that is, without allowing the vendor to gain its own access to the individual (see Chapter 9.)

Martha and I often say that if we made one big error in the predictions inside this book, it was overestimating the degree of interest consumers would have in protecting their own privacy. We thought privacy intermediation would be a big business, but so far this just hasn’t happened. On the other hand, it may be that technology has now reached the point that this kind of intermediary function might soon be handled as a simple mobile phone app. And when that happens, VRM will arrive for real.

Don & Martha, if you’re reading this, check out . (Also find more background on VRM here, here and here.)  And look here for some examples of efforts that qualify as “privacy intermediaries.” I think Azigo, , , and  are all in that ball park, each with different roles. (For more on that park, see Joe Andrieu’s series on user driven services.)

I need to add, however, that we don’t always need intermediaries. VRM is about independence as well as engagement. We need self-hosted and self-directed solutions as well. We also need to build on free and open code, standards and protocols if we don’t want VRM to become as silo’d as “social media” have become. (The big two, Twitter & Facebook, are both companies, not functional categories.) This is what is for. Also , the code-child of , whose fingerprints are also on both Twitter and Oauth. Here’s a nice interview with Blaine by Tom Murphy at .

has a customarily thoughtful post with The customer is not king. He explains,

…today that’s changing and we can look at the world through a different lens – that of the decision-maker (the person) rather than that of the decision-influencer (the seller). Once you do this it quickly becomes apparent that this meta-need – to make (and implement) better decisions – is bigger than all other needs (for chocolates, for cars, for current accounts etc) because it embraces them all, subsuming them into the bigger task of achieving what the person (not the seller) wants to achieve.

Person- or buyer-centric services then, sit on the side of the individual, helping the individual achieve what the individual wants to achieve, including managing relationships with many different suppliers more efficiently and more effectively (VRM, or Vendor Relationship Management). The central questions here are, What challenges does the person face when doing this? How to do it better?

The difference between now and say, twenty years ago, is that twenty years ago this person-centric perspective was operationally irrelevant. You couldn’t do anything practical to help people address these challenges. When marketers said ‘the customer is king’, it was just a disguised way of saying ‘the organisation is king’.

Now, however, as information becomes a tool in the hands of the individual, that’s changing. The organisational king is being deposed. This is not about superficial changes in ‘how to achieve the same old marketing goals better’. For example, it’s got nothing to do with arguments about whether it’s easier, cheaper or better to get marketing messages across via social media or mass advertising. It’s a deep, structural, tectonic, remorseless and comprehensive transformation in the relationship between individuals and organisations.

And if you keep on looking in the customer mirror, you simply won’t see it coming.

Denis Pombriant, who was a very helpful contributor to VRM+CRM 2010 a couple weeks ago at Harvard (with big thanks again to the Berkman Center staff), followed with VRM, CRM and Social Media. While mostly complimentary, Denis adds,

I can’t say the same for VRM and that’s one of the big hang-ups for it.  Who makes VRM and who pays for it?  The customers don’t seem interested in paying for anything so don’t look there.  And savvy vendors tend to look at VRM as slitting their own throats.  Pretty quickly you realize that while there is a need for what VRM does, there doesn’t seem to be a constituency ready to pay for it.

Well, we’ll see. Customers will pay for lots of stuff that has real value, provided the means are provided. When the only easy way to get digital music was Napster, everybody talked about how nobody wanted to pay for music anymore. Then Apple made it easy to pay 99¢ per tune, and since then more than ten billion tunes have been sold on iTunes alone. Mobile apps are another one. At a more mundane level, how about coffee. Before Starbucks, coffee was one of the cheapest drinks you could get. Now the new norm is $3+ for a cappuccino or a latte.

But Denis’ point is well-taken. VRM solutions need to provide real value to customers, or those solutions won’t thrive in the marketplace. Some of that value will come from free stuff that business can be built on. Some will come from services that customers — or somebody — will pay for.

David Cutler also has a nice post on VRM, borrowing a very helpful graphic from Julian Gay, which was the subject of much discussion at VRM+CRM 2010. A gallery of pix is here.

And the Danish Magazine  interviewed me, about VRM, e a few weeks back. The piece is up now, in Dansk. Here’s a blog post about it in English, with a short video by , shot over lunch outside in Paris. Scenario also got some great shots of me, also in Paris, to go with the piece.

Finally (for now), check out this Klint Finley interview with Josh Bernoff on Josh’s new book (co-authored with Ted Schadler, Empowered. I dunno if VRM comes up in there, but VRM is certainly more than consistent with the title.

4 Comments

  1. Doc, Thanks for crediting me with the introduction. Full disclosure: I worked with Don and Martha setting up their UK operation in the 90s.

    I have long wanted to get you guys talking together because the thought leadership you all deliver deserves the widest possible audience. It would be a great priviledge to find myself at the leading edge of business thinking for a second time in my career.

    I am working on the clients I have with suitable business models to deliver using the VRM+CRM engagement model.
    The Future Will happen.

  2. The use of Kickstarter by Diaspora probably gives a hint of how funding for public facilities (including customer oriented such as for VRM) can be obtained, and developers commissioned to fund them.

    While the government looks after corporations, the people will have to look after themselves.

  3. Erratum: ‘developers commissioned to produce them’

  4. I think the fuse has been lit, but the bomb hasn’t gone off – yet. Funding the start is getting easier the harder it gets for joe public to get by day to day. the social revolution is brewing quick and people are ready to unite behind something that works for them and not big business or big government. They just need to be more educated.

    I know the MyDex and PAOGA pretty well now and am hoping that we can pull something off here in the UK before too long.

    As Alan Mitchell has cautioned for some time now (and you too), the marketing men and big legacy industries/institutions are in for one hell of shock when the bomb goes off in their lap.

    Personally, i cant wait to shake the f*****’s up.

    Time for the good guys to step in i reckon.

    Keep up the good work fella.

    Mike.

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