I had the great pleasure this evening of attending the VRMhub meeting organised by Adriana Lukas, and attended by a group of extremely clever people working to try to make it happen (and me). Tonight, Cluetrain co-author and father of the VRM project Doc Searls was in attendance. I’ll paraphrase his introduction and add a little commentary.
Right now, VRM (vendor relationship management) is an idea. It’s predicated on the perception that the relationships between people and brands/companies are terrible. They shout at us with their megaphones and we often do our best to ignore them. Most of the time, the only thing either side ever talks about is the exchange of money — “how much does it cost?” Compared to a real market, a street market, that’s an extremely impoverished relationship.
Up till now, it’s been business that has come up with ‘solutions’ to marketing problems. But there are some problems that can and ought to be solved from the individual perspective, the demand side, Searls maintains.
One of the latest solutions to the problem of marketing without wasting loads of money is CRM. Companies collect loads of data about their customers and potential customers and then target their marketing efforts at segments of those groups. CRM is ‘lame and bad’, though, because it isn’t about relationships at all, but about media planning. And it can go wrong badly, Searls recounted that his Satellite TV company simply lost his account details when he last moved house — he lost the extras and perks he’d gained from being a long-standing customer.
Searls also cited the example of National Public Radio in the US, a service akin to the BBC, but dependent on voluntary contributions rather than a licence fee. So how do they get people to make contributions? Every so often they say they are going to have to close down because they haven’t got enough money. So people send in money. Then, for the rest of their lives, they get spammed by the organisation, asking for more. This is ineffective and intrusive. There’s no mechanism for listeners to act the way they want to naturally. They can’t donate money to a particular show they enjoy, for example.
There are efforts to cut out advertising and create more direct relationships. The online sale of Radiohead’s In Rainbows, for example. The trouble is that these come from the supplier side, so we potentially end up with a million different ways of dealing with organisations we want to buy things from. If the nature and technology for managing those relationships came from the customer side, then it could be uniform and cut out a lot of the inefficiencies in the system.
Searls views the VRM project as unfinished business from the Cluetrain Manifesto. The central insight there, ‘markets are conversations’, has struck many people as true and right, but the technological implementation and management of that remains frustratingly tricky.
So how does VRM work?
That remains something of a conundrum. The best bet — as far as I could make out — is that it integrates with blogs or is similar to blogging. Individuals record their preferences and the personal data that you normally need to use an ecommerce site — on their own sites (or maybe they use a third-party service or a facebook app or whatever).
Those preferences are objects on your site — I think they are probably recorded as microformats — little snippets of machine-readable code that you can post online. There are already formats like hCard that can act as an online business card. Carrying that over to record things like product details or preferences wouldn’t be terribly difficult from a technical perspective, as I understand it. So there might be a microformat that records your preference for airline seats, for example — extra legroom, window seat, not by the wing, say. You’d have that little code snippet at a unique URL and you could decide whether to allow universal access or access only for companies that you’ve decided to have a relationship with. If a company annoys you, you could cut off their access at the press of a button.
(a) this all sounds a bit geeky — it will never catch on
Yes it is, so are blogs. And blogs have forced companies as big as Dell to completely change the way they interact with their customers. If we just do it, and it becomes a phenomenon, companies will be forced to listen. Eventually, it will become productised, the same way MySpace productised blogging.
(b) I don’t want a relationship with the people I buy things from
Doc said, “Sometimes, I don’t want a deep relationship, I just want a cup of coffee”. And that’s fine. VRM-style approaches won’t replace all other marketing by every company. However, most people spend most money on big, considered purchases like houses and cars. Our ability to properly judge those purchases will be enhanced by a VRM approach. Large B2B purchases also account for a lot of money. Regular, smaller purchases from companies like supermarkets and bookshops will also be enhanced.
Well, not entirely. That’s not going to happen overnight and not going to happen to the whole of the marketplace. Think of VRM as having the same impact as blogging activity now and the way that will grow. We’re at the equivalent of 1999 when it comes to VRM.
(d) Where’s the money?
Good question and it’s not something we know right now. There’s a potential whole new industry called ‘needs management services’; there’s the potential for individuals being paid for access to their data; there’s the possibility to create large, targeted focus groups on the fly similar to YouGov. Basically, that 50% of the advertising budget that doesn’t work is up for grabs because VRM systems guarantee interested, relevant relationships. However, the thing now is to create the phenomenon. From the human being perspective, this better than what we have now. You will have a better life if you embrace VRM.
How to learn more?
I’m glad you asked. NMK is running a panel discussion about VRM on the evening of March 18. Do please come along. Top speakers, cheap ticket, free beers, exciting subject. What’s not to like?
[The picture came via fffffound fromhereand shows how VRM might work in practise. ;-)]
I love the film Kes (1969). It was still modern when I went to secondary school, nearly ten years later — some local authorities were still trying to get it banned when I was teaching in the 90s, and it’s still modern now. This scene, where the poor messenger boy from the second form gets beaten seems really resonant.
They had CP at my school back then and I don’t believe it made any difference to anyone’s behaviour. I don’t believe it did anyone any good. I remain undecided as to whether it did us any harm, but that’s a moot point, really. As the headteacher in the clip says, he’ll be beating them week after week with no evident impact. As the story goes, Ken Loach, who always uses improvisational techniques with his normally untrained actors, didn’t tell the boys that they’d be properly caned, hence their very realistic reactions.
PS: I bookmarked this link to the fantastically funny football scene in Kes with the much-missed Brian Glover a few weeks ago.
Since I am quite evidently too pre-occupied to write many blog posts, I have set up a Lifestream thingy on a separate page of this site.
It’s very beta at present and tracks my contributions at twitter, flickr, del.icio.us, last.fm and updates to my work site (NMK). Facebook is already echoing my tweets and blog posts so I’ll save you the pain and leave that off the list.
Hope to add updates to Upcoming and Ffffound soon as possible — I need to make some custom icons and stuff to do that. Would be cool if I can find a way for it to publish the images from flickr and ffffound. That’s why they say beta, I suppose.
One other potential issue — how can I set up an RSS feed for a single page on WordPress? Stalkers currently have to visit the site to see what I’m up to. Hmm. WP experts please respond…
It’s about how we all lie online in terms of the way we present ourselves, or rather, that we’ve been lying about ourselves for an awful long time — how we feel, how we feel about our partners and jobs, our height, weight and age, for example — and this hasn’t changed just because technology has speeded up. According to psychologists, we tell between six and 200 lies a day in order to socialise (‘I’m fine’), for play and fun, to hide misbehaviour, feel safer, feel private, feel better about the world for ourselves and to try to be more popular. There are lots of good (and bad) reasons to dissemble.
Lying is a bad thing for society, of course, as every major religion agrees. Though, on second thoughts, our culture does allow for things like white lies,keeping secrets and preserving our privacy, all of which are seen as good things by-and-large but which normally involve deception. Our actual practice means that deception is implicit to our social existence.
New information technologies that attempt to insist on personal transparency don’t really fit with our lying culture or our biological needs. There are conflicts between our cultural practises and our cultural ideals, and while we can work round those in meatspace, dealing with machines tends to expose those conflicts. (“Date of Birth?” on the registration screens of a service is a good example.)
Twitter, according to Bell, is about making an art out of confabulation. The construction of a lifestyle we present is both a biological necessity and a work of art in its entirety. On Twitter, you are allegedly telling the world ‘what are you doing right now?’. But I did a little search on Twitter for ‘having a wank’ (sorry, mum) and the lack of any direct matches would seem to support Bell’s contention.
I haven’t seen this subject addressed before and found the presentation fascinating. I am troubled by the idea that transparency is coming to be seen as a moral necessity. It’s like the web 2.0 equivalent of Daily Mail readers saying, “you wouldn’t object to CCTV if you had nothing to hide.” As individuals, hiding, privacy, confabulation, imagination and play are pretty important to mental health, I think. This is one reason why people are very concerned about who they let into their Facebook circle of friends. Facebook insists on people using their real names and thus makes it impossible to hide different circles and different personae from each other, the way you can offline. Facebook makes it impossible to lie, and that is arguably mentally damaging.
[This is a tad off-topic but has a 2.0 in it and so is fair game. Feel free to disagree.]
I was at a press briefing for the launch of a new report called Learning 2.0 from the CIM (Chartered Institute of Marketing) this morning (it’s not online till 21/2). They asked me what I thought of the title. I’m not sure they appreciated me saying that calling everything 2.0 makes me roll my eyes nowadays. They reckoned that for mainstream marketing people, the idea would still seem pretty fresh.
Anyway, the report was about training and learning in the marketing industry. The gist of it, which I thought was pretty sound, was as follows:
People nowadays don’t have jobs or even careers for life. We have these portfolio careers and we’re all entrepreneurial about those careers. The average in-house marketer stays in a job for four years; it’s even lower in agency land.
Our employers don’t have our individual agenda at heart when they design training or development programmes. They have the company’s interests in mind.
There’s a conflict of interest here, of course — you might want to do a public speaking course, for example, because you envisage yourself as an effective public speaker. But if your boss doesn’t think that’s part of your job, the chances are, you won’t be doing one.
Employers also tend to confuse training and learning. Training gets done to you. Learning is something an individual does themselves. Companies tend to think of training as their responsibility, rather than learning. They also think (62% of them — HROs — do) that “done to” training is the most effective way to deliver education for the job, according to survey results.
Educationalists have identified at least 37 different types of ways in which we learn stuff, from reading a book to playing simulations. Each individual will have their own preferred and most effective learning styles. In-house training tends to focus on one — sit in a room with a bunch of other people and get talked at.
Therefore, there’s a big need for change when it comes to professional development. Individuals need to do more to take the initiative, since they’re ultimately in it for themselves. Their own preferred learning styles might mean that the current provision their company offers is utterly useless. They’d learn more from reading books, or blogging, or going to excellent networking events. Probably a combination of different learning activities. They should push for those things to be recognised as CPD investment, and potentially paid for by their employer.
On the other hand, employers need to open up their definitions of training and learning. Why does only sitting in a room and being talked at tick the box? This doesn’t necessarily imply extra investment or resources on their part. Just an openness to recognising that learning is taking place in other ways. Companies need to fund and provide time for the learning an individual wants to undertake — not just the kind that’s always been provided.
To my mind, this situation has arisen as a consequence of the dreadfulness of appraisal culture:
“Now, Ian, it’s your annual review. You have done OK, but could do better. How can we help you?”
“Well, boss, I agree I could do better. [and really want a pay rise which isn’t at all linked to this appraisal. wink-wink.] But you see, I don’t really know much about phone sales.”
“Ah — we’re doing a course in May about phone sales. I’ll send you on that.”
Box ticked. Job done. Next subject. My arse.
(Bonus link to a fab blog post on this very subject from the Chief Happiness Officer — from which I stole the wink-wink gag.)
Afterthought: the worst CPD I have ever received was when I worked as a teacher. In many respects, it’s the loneliest profession — you spend your entire day with clients. Yet, the professional training is zilch — “we’ve bought this new CMS and we’re having a training day on how to use it.” “Yeah, but, how can I be a better teacher?” “Sorry, what?” — How appalling is that?
The Borg-Yahoo merger won’t work. Here’s why. It’s like taking the two guys who finished second and third in a 100-yard dash and tying their legs together and asking for a rematch, believing that now they’ll run faster.
Social tools, devices and web evolution are creating epochal change in media, society and business. The plan is to hide under the floorboards till it’s all over document some of the interesting parts of that change. More….
Right now, VRM (vendor relationship management) is an idea. It’s predicated on the perception that the relationships between people and brands/companies are terrible. They shout at us with their megaphones and we often do our best to ignore them. Most of the time, the only thing either side ever talks about is the exchange of money — “how much does it cost?” Compared to a real market, a street market, that’s an extremely impoverished relationship.
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