ProjectVRM began (in September 2006) as a development project, in which most of the development was carried out by individuals, companies and organizations outside the Berkman Center itself. In 2009 ProjectVRM began doing its own VRM development, under a grant from the Surdna Foundation, and also began research work, with the intention of testing VRM theories and learning from VRM deployments in the marketplace.
At this stage (early 2010), ProjectVRM’s primary research work is toward challenging VRM principles (e.g. benefits of vendor openness, and willingness of users to pay for perceived value in the absence of existing payment mechanisms provided by the seller). Results of research efforts will guide the expression of VRM principles, inform development processes and, presumably, assist their adoption.
Additional benefits should include bringing together passionate participants around research work, demonstrating and furthering Berkman research methodologies and software — and forcing clarity and learning around testable characteristics of VRM.
The idea behind VRM is to equip individuals with tools that make them independent leaders and not just captive followers in their relationships with vendors and other parties on the supply sides of markets. VRM will be successful when customers get direct benefits from taking control of their relationships (including the data they acquire and generate) — and vendors see alternatives to customer lock-in for gaining loyalty and generating profit.
This vision makes several assumptions. Primarily, that a free customer is more valuable than a captive one (both to himself or herself and to vendors). Testing this hypothesis (or more accurately, specific versions and aspects of this hypothesis) is the goal of our current research. A number of questions come up:
- What characterizes a free customer? (Autonomy? Ability to engage independently? Something else?)
- How will customers know they are free?
- What are the potential benefits to a vendor for freeing a customer — or dealing with customers that are already free?
- How can customers signal their freedom to vendors?
- How will that freedom attract vendors? (What makes a free customer more attractive than a captive one?)
- What do free customers bring to markets that captive ones don’t?
- By what social and economic processes will freedom for customers become normative and not merely desirable?
In our first round of research, we are creating an information gathering process in which subjects are placed in either a free or captive customer scenario and subsequently asked to enter personal information of several kinds. Different treatments within this experiment will test participants’ willingness to engage, exchange information, and offer the experience to their friends.
Subjects in both groups will be told that an information-gathering tool is being tested. The “captive” group will be presented with a vendor-driven information gathering tool, about which will be made clear that the data gathered can be used by the vendor. The other group will be presented with a user-driven information gathering tool, in which it will be made clear that the data gathered is not for any vendor but for the subject’s own use, and cannot be shared without the user’s permission.
These experiments should begin in March or April 2010. We are working with Berkman’s Cooperation Group on these experiments, and thank them for their valuable assistance.