It's Not Your Relationship to Manage

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“We are not seats or eyeballs or end users or consumers. We are human beings—and our reach exceeds our grasp. Deal with it.” —Preamble to The Cluetrain Manifesto 

It’s been more than a decade since The Cluetrain Manifesto—by Rick Levine, Christopher Locke, Doc Searls, and David Weinberger—rocked the Web and climbed the best-seller list, and its effects continue to percolate across our culture and commerce. (See “Manifestos Are Conversations” for an oral history of its creation.) In fact, one of the manifesto’s precepts may finally be coming to the fore: vendor relationship management, or VRM. 

Searls, who now heads ProjectVRM as a Harvard University fellow with the Berkman Center for Internet and Society, says he expected the second act. “After Cluetrain [came] out and was a best seller and was successful by pretty much every measure, there was still unfinished business,” he says. 

CRM, in Searls’ description, still positions the customer relationship as an element within the seller’s system—a circumstance that ignores every other vendor the customer has relationships with. So why has managing the integration of customer data been cordoned off? 

The idea behind VRM flips the structure of CRM on its head—or, as Searls puts it, “Wouldn’t it be cool if there were standard ways that customers could relate to multiple sellers that were consistent and richer than CRM systems?”

A particular ProjectVRM fixation? Fixing the flaws of the online shopping experience. “One of my goals is to make dealing in the digital world as easy as in the bricks-and-mortar world,” Searls says, adding that much of the e-commerce experience echoes the primitive days of the Web—and it’s a broken model. When customers buy products in stores, they search out what they want, carry it to a register, interact with a human, pay with their preferred method, and exit the store. E-commerce has essentially added more hoops to jump through with the vendor responsible for scraping customer data off the Web. Searls says individuals need tools empowering them to make online interactions as easy as in-store ones. (See sidebar “VRooM, VRooM: ProjectVRM.”)

The tools, however, have to be drop-dead easy, says Christopher Carfi, author of The Social Customer Manifesto blog, cofounder of business-solutions provider Cerado, and a contributor to ProjectVRM. “As these concepts become more socialized around VRM, customers will just start doing it,” Carfi says. “A lot of things we see from the college-age generation now—in their comfort and willingness to share info, photos, status—are going to help that next step in interacting with their vendors…in a similar natural way.” 

Customer/Vendor Inequality

“There are things that have gone wrong—really wrong—in the last 10 years as the Web and the Internet have assimilated into the retail world,” Searls says, noting that vendors mostly control the existing ways to engage. In other words, customers are limited in how they interact with vendors—be it through terms of service, payment requirements, and even product searches. Much of the current VRM work is about identifying the missing tools on the buy-side, the ones that will enable customers to manage their own interactions and data. 

“It seems everybody is looking at more ways to sell things, and not many good ways to buy things,” Searls says. Also, online stores present customers with barriers to entry that just don’t exist offline. Take Nordstrom as an example: You don’t have to be a member to shop in the physical Nordstrom department store. Nordstrom.com, however, requires shoppers to fill out myriad boxes before they can complete the simplest transaction. 

The marketplace needs entities that work for the customer, rather than the seller, Searls says. That’s why ProjectVRM is collaborating with developers and technologists to build personal data stores for customers, along with other tools for their own information. “In time, that’ll be institutionalized,” he says. “Digital identity is one of the missing tools we need to have.” 

Tool Time

Iain Henderson, a consultant and blogger who joined ProjectVRM through the study of digital identity, agrees. With a background in database marketing, Henderson is developing Mydex, a data store for individuals: Vendors could request to “follow” the customer’s data; the customer then “approves” a vendor to follow her and get updates when she, say, updates her mailing address, gets a new credit card, or even gets married. “The individual gets better backing and control of [her] data,” he says, starting with nonsensitive data and gradually expanding to personal Requests for Proposals. “This takes CRM—and the Internet—one step further,” he says. 

“It’s going to be such a broad market and such a different way of looking at business that there will be a lot of things that poke at ‘What is VRM?’” Carfi says. VRM leaders seem to agree that the personal digital-identity project needs to be tackled first. Other tools will follow. 

“By putting more abilities on the customer’s side, we provide more ways of engaging with vendors or sellers,” Searls says, noting that some customers may choose to provide a vendor with more-privileged information than is typically covered in a site’s “Terms of Service.” 

There’s also extraordinary opportunity for VRM tools to work alongside social networks. “Wouldn’t it be cool to include the stores I care about in my social network?” Searls asks. Twitter, he notes, is an instrument of VRM—and he’s used it that way to see if any vendors are listening. During a recent ProjectVRM meeting in Palo Alto, Searls twittered something like: “There are 15 of us at this location. We need coffee. Starbucks, are you listening?” In a VRM utopia, Starbucks would have jumped at the opportunity. Sadly, the cry for caffeine fell on deaf ears. 

A big priority with these tools is to make them easy-as-pie to use so that consumers don’t have to question the value. “They have to be as easy as a key chain,” Searls says, speaking of plastic loyalty cards given out by many chain retailers. “But obviously customers are ready to inconvenience themselves by carrying around pounds of loyalty cards.”

Death to the Loyalty Card

Searls is no fan of loyalty cards. “They don’t make people loyal,” he says. “They create a pile of data which is often useless.” Carfi says we just need an easier way—and Scanaroo, one of his Cerado projects, might be it. The application for Apple’s iPhone scans and stores documents and data, enabling people to, say, reach a doctor’s office with their medical information stored on their mobile phones. 

“The whole idea is to get more data and make customers more loyal,” Searls says, “But in a lot of cases, people don’t want to shop there because of the loyalty-card system.” The fact that you have to have a membership to purchase something at a store is a convoluted concept—and it’s similar to the registration hoops that people jump through in order to make online purchases. Having one card for a handful of stores in which you were loyal makes a lot more sense, he points out. Mostly, Searls insists, loyalty cards inconvenience customers more than they enable them. 

Broadcast Shopping

People do it on Twitter—announcing a product or service they’re seeking and asking for recommendations. A vendor or two may pipe up, proving they’re adept at listening, and suggesting their own goods or services. Wouldn’t it be great if a handful of relevant companies spoke up with a product or service—even one produced by someone else—when you asked for it? 

Say you want a cherry-wood table. You use your broadcast-shopping tool—perhaps Twitter, or a service that syndicates your request across multiple networks—to announce the desired dimensions and attributes, and the price you’re willing to pay. Within seconds, trusted vendors are responding with items for you to peruse. 

VRM imagines how to build a better marketplace by equipping customers with tools that make them both independent of seller systems and better able to engage with them. In the aforementioned situation, both the sellers and the customers win. “We’ve been talking about this for years with the personal RFP,” Searls says. “There’s an awful lot of money left on the table in the form of standing demand for goods or services.” 

Mobile Marriage

Mobile tools might be just the oomph VRM needs. Carfi says VRM concepts, when married to smartphones and mobile, “are going to be…transformational.” Control, once highly centralized, will be pushed out to the network—but not all at once. “There will be [vendors] coming into the fold kicking and screaming,” Carfi contends, “but mobile is going to be the thing that causes that tectonic shift in the retail industry.” 

Vendors are slowly showing signs of acceptance. In certain airports, for example, American Airlines now accepts mobile boarding passes at the gate—instead of a piece of paper, a passenger shows a barcode on her phone. Barry Judge, the chief marketing officer for electronics retailer Best Buy, said at the recent Forrester Consumer Forum that it won’t be long before his company begins incorporating the mobile experience into its retail stores. 

CRM’s Other Half

If VRM’s intent is to improve the company/customer relationship from the customer’s side, then the integration of VRM tools with CRM systems will have to improve. “We have to go to SAP and Salesforce[.com] and Microsoft and IBM and Oracle and say, ‘Here’s what VRM is going to look like when it comes to you and here’s how to adopt these tools and how to do this,’” Searls says. It will require education, the VRM pundits agree, but at the end of the day, it will do the CRM industry a world of good. 

Henderson notes that billions of dollars are spent each year trying to contact customers at the wrong addresses. Sure, a vendor could invest in a data quality tool, but why not simply have the correct address in the first place? Or at least let the customer correct the data herself? “It’s assumed to begin with that companies aren’t going to want to give up control of data,” Searls says. “But once you…acknowledge that the most important data isn’t in any seller’s system and a lot of data is wrong…, we don’t get much resistance at all.” 

CRM excels on factual matters, Henderson says—the what of the customer relationship, at least from the vendor’s perspective. VRM, on the other hand, focuses on relaying the why—or rather a customer’s intentions. Marrying the two could result in a rich set of information that companies have yet to be able to tap in to. VRM data also eliminates guesswork, Henderson argues, and the increased familiarity with customers’ intentions allows a company to reduce marketing expenses. 

“It’s a matter of…finishing the job the Internet started,” Searls says, driving home the point that doing so requires equipping both supply and demand with as many tools as possible. CRM vendors should think of it this way, Carfi says: “With VRM, we now have plugs as individuals that plug well into what vendors are doing.” Henderson has some lasting words for businesspeople: “This might all seem a bit weird and scary, but it will happen,” he says. “It would be wise to engage with it and help it happen.” 

Even after a decade of culture-shifting success, it seems the work of The Cluetrain Manifesto may be just beginning.

SIDEBAR: The Tenets of VRM

  1. The individual is the point of integration;
  2. The individual is the focus of interactions with vendors;
  3. The individual controls access to information.
Source: Christopher Carfi, Cerado

SIDEBAR: VRooM, VRooM: Project VRM

Doc Searls, a fellow with Harvard University’s Berkman Center and one of the four authors of The Cluetrain Manifesto, coordinates VRM-related activity at ProjectVRM. The group at the Berkman Center for Internet and Society is working to develop tools and ideas around vendor relationship management—with the goals of providing customers with both independence from vendors and ways to engage with vendors at its crux. ProjectVRM work began bubbling up in 2006, yet many of the project’s ideas were discussed in conversation around The Cluetrain Manifesto. (It was only a few years ago that technology-industry editor and columnist Mike Vizard suggested the term “vendor relationship management.”) 

ProjectVRM’s first couple of years mostly produced more discussion and education, says Mydex creator Iain Henderson, adding that a challenge is that VRM is so encompassing that people are coming out of it from many different perspectives. Much like CRM, Henderson points out, “There’s no one cohesive view of what VRM is.” 

The future of ProjectVRM, according to Searls, will rely on a great deal of new programming, much of which will need to be coded from scratch. 

SIDEBAR: A Software-as-a-Service Customer's Bill of Rights

Altimeter Group partner Ray Wang fields a lot of questions from users of enterprise software. What should people expect to read in a contract with a software-as-a-service (SaaS) provider? What’s the best way to negotiate with a vendor? Realizing that business decision makers needed a “cheat sheet” in reading over contracts and implementing new software, Wang drafted a customer’s “Bill of Rights” document and left it open to vendors and customers for collaboration.

“We had to call out certain things because you don’t own the software, you’re renting it,” Wang says. “The time frame can be much longer because, if it works for you, you’ll probably be doing this five, 10, or 15 years.” 

Most SaaS vendors were very open to changing how they dealt with customers, Wang says. In fact, the analyst relays that not only were the vendors eager to contribute to the open document, but they said they were willing to accommodate and alter contract and negotiation protocol. “They really wanted to change the conversation and cater to those relationships,” Wang says. 

“This is more about a relationship or a partnership than it is about a contract,” Wang points out. “So you’ve got to make sure you’ve asked the right questions up front.” The SaaS Customer’s Bill of Rights can be accessed as a Scribd document on Wang’s blog, A Software Insider’s Point of View (http://sn.im/wang101209). 

Associate Editor Lauren McKay can be reached at lmckay@destinationCRM.com.

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