How customers matter more than data about them

When I ran across Inc.‘s The 5 Habits of Quality Focused Companies, I was intrigued, because I thought maximizing personal contact with customers would be one of the five. Instead the closest Inc. came was this:

2. They collect and analyze data.

Collecting data is more common than ever, particularly with the advent of Web analytics. But companies that focus on quality have long stood out thanks to their passion for data. Moreover, the metrics they track go above and beyond either web or financial information. For example, Inc.’s John Case wrote a profile of Granite Rock, a phenomenally successful quarry (yes, quarry) in 1992. Customer surveys played a major role in the company’s governing philosophy, with information collected at all kinds of intervals, and results shared widely among the quarry’s 400 workers. “The role of managers,” Granite Rock CEO Bruce Woolpert told Case, “is to make sure there’s a flood of information coming into the company.” Would you say that this was true in your business?

Dig Deeper: How to Use Online Tools for Customer Surveys

That piece begins, “If you’re truly willing to listen to — and act on — feedback, here’s the way to do it right”. But they’re not talking about listening to individual human beings. Instead they’re talking about listening to what surveys say:

In the Internet age, customer feedback is only a click away. Online surveys are one of the best ways to solicit it. Done right, online surveys can help you more effectively listen to customers and make informed business decisions.

But before you design and launch a survey, think about this: are you, or is your company, willing to act on the insight a survey generates? In short: Can your company handle the truth?

That’s nice as far as it goes. But it only goes to the aggregate, even in “social” settings:

Another issue that may come into play is how you intend to deliver the survey. If you want to know how satisfied your existing customers are, you may already have their e-mail addresses on file from previous interactions so you may want to send them an e-mail with a link to an online survey. To reach this population, you may also decide to have a survey on your website for existing customers to access.

Another growing option, Terry says, is to use your business’ Facebook fans or Twitter subscribers as a potential survey population by using online survey tools that integrate with social media. “A lot of businesses have realized that it’s cheap and efficient to interact with customers online using social media,” he says. “Increasingly a lot of customers spending time online and specifically in social media channels. There are good survey opportunities with people who have been following your business online. You want to ask questions where your customers are, meaning you can post a survey to Facebook or send it via Twitter.”

What none of this touches is a problem all surveys have, by design: they’re not personal. As I explained in Why surveys suck,

They tend to be as impersonal and non-conversational as a TV signal — even when a human being is conducting the survey in person. They always see me as part of a group rather than as an individual (which is how each of us feels our needs). They always make assumptions (about me, about what I might want, about what I belong to) that range from slightly-off to outright-wrong. And they always lead to conclusions that represent neither me nor the population in which I am being grouped.

I don’t doubt or deny that surveys do a lot of good. But only in the context of a marketplace where vendors alone bear the full responsibility for relating to customers. Once we, as customers, get tools that let us educate vendors personally, many surveys will become unnecessary. One way we can gauge the success of VRM is by watching the number of surveys decline.

Thought: Some of the best survey questions are the ones that never get asked because sales and marketing impulses override knowledge that the customer would certainly say “no”.

Of course surveys can be very helpful, for all the reasons Inc. gives. But even when they’re necessary, surveys are insufficient in a world where customers are increasingly well-equipped and independent. Surveys also risk rationalizing more of what Umair Haque calls “thin value,” while also blinding companies to “thick value.”

As Umair explains in this talk, thin value is “inauthentic, brittle and unsustainable.” Surveys risk thinness of the first sort, because they are at best authentic only to aggregate samples. They can’t be authentic in respect to individuals, except when they provide a way for individuals to add what they might like, and to provide their name and contact information on an opt-in basis. But even in those cases, the value of individual input is usually external to the main purpose of the survey, which is to produce numbers — not conversations.

In her Venure Beat review of Umair’s new book, The New Capitalist Manifesto: Driving a Disruptively Better Business (Harvard Business Press, 2011), Ciara Byrne compresses his thick value case nicely:

He defines “thick value” as value which is authentic, in that it is not created at someone else’s expense but creates value for others, meaningful in that it matters in human terms and sustainable by not being bubble-driven or built on the destruction of resources. Think Etsy rather than Gap or Innocent Drinks rather than Coca-Cola.

I submit that one good way to find thick value is to get personal with customers. Not with more systems for “managing” customers, or investing in “relationships” that resemble the dairy cattle business more than anything human. Instead, let them get truly personal with you.

“Social” whatever alone won’t cut it. To explain, I’ll turn the blog’s floor over to Jonathan Yarmis, writing first about “social ennui” and then VRM:

I think a state of “social ennui” is setting in.  For those of you who are unilingual, ennui is French for “boredom.”  Gartner would call this phenomenon the “trough of disillusionment.”  Everyone’s on the social media bandwagon now.  You’ve got 1,000 Facebook friends, you’re a social media consultant.  Social media will solve disease, global warming, make us all happier, richer and more content.  Better looking, too.  People are way overpromising and underdelivering.  But, as I’ve observed earlier in this blog, that’s the nature of technological change.  We overstate the impact and benefits in the short-term.  God, is that going on here!  But interestingly, we understate the impact and change in the medium-term.  And I again fully expect that to be the case with “social media.”

Social media is in the still very early stages of something that’s going to end up flipping relationships and changing others.  No, we’re not going to throw out everything we know.  The new rarely ever does that.  Yes, we still ride horses.  But the advent of the automobile changed what and how we use horses…

But there’s more.  Social media changes “public relations” in profound fashion.  Not only do you have a direct path to the public, and your customers and competitors also have those same direct paths, your paths to the “influencers” have been augmented in significant ways, and new influencers have emerged who influence both traditional influencers and your buying public.  Yeah, that’s a lot of change.  I won’t get into the whole social media “you’ve got to be part of the conversation” discussion here.  First, that’s a whole other post.  Second, if I hear one more person say “you’ve got to be part of the conversation,” I’m going to slap them.  That’s exactly why we’re suffering from social ennui.  Lastly, the whole discussion is already over-discussed.  You don’t need yet another perspective, however nuanced, from me.

But we still haven’t scratched the surface of the change to come.  Longer term, I am fiercely interested in the emerging discipline known as VRM.  Vendor relationship management.  Its most powerful advocate is Doc Searls, he of the Cluetrain Manifesto(can you believe that was almost 12 years ago?!).  I actually arrived at the concept independently.  I was asked a few years ago to do a presentation on Social CRM.  I talked a little about how “social” provides new insights into the customer relationship equation, providing new insights previously unavailable.  I went on that putting “social” in front of everything reminded me of Internet 1.0 when we put an “e” in front of everything.  eBusiness.  eMarketing.  eThis.  eThat. Until we realize the distinction was no longer differentiating and in fact no longer valid.  (It’s interesting.  Even my spell-checker wants to flag eBusiness as a typo.)  It was business.  It was marketing.  And so ultimately SCRM is just the next iteration of CRM.  But, I hypothesized, the big change came when users flipped the relationship and started managing their vendor relationships the same way the vendors manage their relationships with us.  SCRM leads to VRM.  When after the presentation, someone told me about existing early thinking about VRM, I was both disappointed (I thought I was about to invent my first category) and thrilled (there’s momentum!!).  As an analyst, this is an important moment.  We can do all the theorizing we want but unless someone’s actually building this stuff, it’s not terribly interesting.

While VRM is far from mainstream now (for many, this will be the first time you’ve even heard of the notion), there’s an interesting community growing up around it and some large retailers are dabbling and monitoring.  The concept here is twofold.  One, the big vision for the field, is that tools will be developed that will enable customers to manage their relationships with vendors and that the relationship is ultimately owned by the customer, not the vendor.  CRM will never give a full view of the customer because the customer deals with multiple channels and providers.  VRM is the only way that picture can be developed…and customers will share that view with vendors who offer value in return.  At its most extreme, imagine an easy-to-create-and-manage iRFP (individual request-for-proposal) process.  Yes, it’s hard to imagine and even harder to do but if done, wildly powerful.  The more selfish view for retailers, as I heard another friend express to a major retailer, “what if you knew what a customer was looking for when they walked in your store.  What if you really knew?”  Today, at best you’re making a guess based on past purchase patterns, incentives you’ve provided, etc.  But if you know the totality of what they were looking for, you could sell solutions, not products.  You could upsell.  You could target…

You might argue that consumers are lazy and that they don’t want to manage their relationships.  OK, you’ve got me there.  You’re right.  This is the real stumbling block.  The tools had better be REAL easy to use with REAL economic value in exchange for participation.  This will require serious software work that assembles what consumers are already doing with social media, parsing and assembling it and making reasonable suggestions and solutions out of our piecemeal, bottom’s-up approach to information sharing.

There are already real players in this space.  Look at Kynetx.  I pick them not because they’re totally on point with VRM, although they can and will get there.  I pick them not because they’re necessarily the best solution out there; I haven’t spent enough time looking at vendors to make a Magic Quadrant.  I pick them because my old friend and foil, Craig Burton (VP of Marketing for Novell, when Novell owned PC networking 23 years ago) told me about them a year ago and brought me in to meet them.  The problems they’re trying to solve are real and exciting, and great for us users.

VRM is the next big thing.  Even as social ennui sets in and we wonder what all the hype was about, there’s real change coming around the corner.  This isn’t old wine in new bottles, or at least it won’t be.  If I were a mainstream marketer, I might take the old wine position for now.  I wouldn’t want to try and sell my company on this from the inside right now.  They’d look at your strangely.  (Well, they probably already do that.)  But in my role, as outside provocateur, I’m going to yelling this one louder and louder.  A decade ago, we were yelling that the Internet was going to change everything.  Pets.com and Webvan died.  The naysayers snickered.  And then we went and changed everything.  We’re going to do it again.  Come along for the ride.

Two events are coming where you can saddle up. The first is Kynetx Impact, March 22-23, near Salt Lake City, Utah. The second is IIW, May 3-5 in Mountain View, California. (Disclosures: I consult Kynetx and I co-organize IIW.) Developers working on VRM tools will be there. If you want to help customers help you — directly and personally — these events are the place to be. You don’t need a survey to tell you that, either.

6 Comments

  1. I wholeheartedly agree with the above opinions and I’m a staunch supporter of VRM activities.

    I recently wrote a piece that maybe adds value to this context called the fallacy of data bubble ignorance: http://www.jonathanmacdonald.com/?p=5051

    I’ve also been setting up Every Single One Of Us which is a VRooMy platform. Human Dialogue  www.humandialogue.com) is the first release.

    Hope some of this is of value – and I for one will continue to fly the flag – and ride the cluetrain :D

  2. Survey, and more so data-based feedback provide insights that you would never imagine having, even in retail. The best example of that is Amazon suggestions: that company is way better at figuring what book I’d like to read than the very skilled book salesperson downstairs. What is needed is what sociologists call a positive model: a presentation of the imaginary lines that you draw between your users that they would agree with. What OkCupid, or iResign and several others are doing is interesting: they show the details of the company reports and understanding, and seek feedback.

    The idea of VRM hides the fact that companies are better at making things because they have scale—call it expertise if you’d rather have quality than cheap. They need to find regularities among needs, or at least parameters, dimensions to set their offers. Personal connexions aren’t efficient for that, as enlightening as they may be, they are not representative. Conversations are great at making census less Kafka-like, but they supplement structure, they rely on, inform, illustrate, make evolve structures; they can’t substitute to them.

  3. Thanks, Bertil.

    To clarify a few things.

    First, I don’t deny the good that surveys can do, and have no argument with the non-representative nature of personal examples. But I don’t see Amazon’s book suggestions as an example of Something Done Well. While I am sure it is the best of its breed, that breed still has a number of serious problems.

    While my own example is, of course, not fully representative, it is, I think, revealing. While Amazon sometimes does suggest books I might like, it also often recommends books I already have, some of which I have bought from Amazon. Sometimes Amazon recommends books that have my name on the cover — and it knows that I am an author.

    For the particulars of my less-than-satisfying Amazon experiences, see here, here and here. Follow that last one for a good example of how Amazon’s personal recommendations fail — at least for me.

    The reason for those failure is silo-ization. That is, the confinement of the company’s interest scope to its relationship with its own customers — and the trapping of both customers and customer data inside the company’s own arcane systems.

    Silo-ization is a problem for all companies that look at customers as captives that they “acquire,” “own” and “manage.” In Amazon’s case, it only knows (and not very well) what it has sold me, and what I’ve looked at on the company’s site with browsers that carry cookies they’ve left there. (Maybe they also know something from tracking data that they’ve bought on the advertising data market.) What they don’t know — what falls outside their silo — far exceeds what they do know inside their silo. The same goes for every other company with a “loyalty program.”

    VRM can help by providing companies like Amazon with personal data they don’t collect, but that we collect for them, and for other trusted vendors. For that, however, we need to be the points of integration for our own data, and the points of origination for what gets done with it. For more on both, see Joe Andrieu’s posts here and here. For some new developments on that front, see here.

    As for VRM as an idea, it hides nothing. It simply focuses on the need to develop tools that empower individuals natively, and enable them to control their data, express their intentions and otherwise relate in new and better ways. That’s it. VRM is a niche play. We happen to think it’s a huge niche, but it’s still just a niche.

    We know companies are best at things only companies can do, especially at a large scale. And we don’t believe that personal inputs should be the only source of intelligence informing product and service development. We do believe personal inputs should, however, be respected far more than they are by most companies today. And that is the basic point of my post.

  4. Thanks, Jonathan. I appreciate the Data Bubble Ignorance piece, and am looking forward to learning more about the Human Dialogue project.

  5. Can see elements of scale VRM in insurance comparison sites like confused.com where the product sought is commoditised and based on relatively few variables (the car, your driving record).

    Two things to note; their sales message now includes the convenience of not having to reenter details, which speaks to the inertia argument offered above. Secondly their commission requirements for handling the service distorts the offering to the consumer as not all insurance firms will take part.

    Both lead to the possibility that if VRM tools are to be provided by commercial providers it may be on a subscription model (which removes market distortion effect) and as wide ranging in scope as possible (which maximises benefit of single point of personal information).

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