VRM FAQ

What is VRM?

Vendor Relationship Management. The one-liner is that, "VRM is the inverse of CRM - Customer Relationship Management".

What are some typical examples of how an individual would use VRM?

• Change-of-address
• Digital receipts
• Personal RFPs

Is VRM about technical standards or business principles?

[My question was not about technical standards versus business principles. It relates to what VRM looks like. Is VRM defined solely in terms of technical standards, or does it also include new services and business models that stand on the side of the individual when dealing with vendors and change the nature of commercial relationships? I think that clearly it has to. VRM is not just a technology.

I may have been my mis-reading the 5 levels of maturity, but the 'flavour' of what came across was that in the end, it's really all about clever new bits of technology. Alan]

Yes. It is both clever bits of code and new best practices for businesses. Doc Searls has made it clear from the beginning that Project VRM is a development project: that the end goal is working code that makes a difference in the real world. At the same time, Doc has also made it clear that the ultimate goal is fixing the marketplace, which means that new best practices will emerge.

Joe Andrieu advocates a drive towards interoperable relationship services--using both standards and running code--which will transform the marketplace by giving companies a new way to increase their profits. By giving companies a winning proposition, we can get them to adopt new methodologies and new business principles. This is similar to the way that the web was adopted because it made business sense, and as it was adopted, radically changed how companies and customers relate. Without http and HTML the transformation that enabled the Cluetrain Manifesto never would've happened, and in fact, it was the openness of those standards that enabled the world wide web to displace Lotus Notes as intranetware and AOL/Compuserve as online services. Joe sees a similar technology-led VRM revolution, where Project VRM catalyzes change by assuring standards and applications that enable individuals to play in the marketplace on their own terms in a way that also improves businesses' bottom lines.

How can companies "implement" VRM when it is the individual who is managing the relationships? Doesn't it create a conceptual mess that risks smuggling the corporation as relationship manager back in by the back door?

To Sean Bohan, while the user is in charge (driving the relationship) there still needs to be some corresponding structures on the Vendor side to accept/interact/transact with that VRM'd user. There needs to be a nut for the bolt. Vendors must have some form of acceptance, some framework that can work with customers who are in charge. Compliant and Aligned both work for me, but I was trying to get across the idea that there is commitment, acceptance and more importantly, work on the Vendor's side to be VRM compliant. Doc said in the past this needs to be Win-Win for the vendors too, and "Implement" is something a BigCo guy would understand (I get something out of implementation). "Implement" may be the wrong word (it was workin form me in the wee hours of the morning) - and we can change it. I think the idea of "smuggling the corporation as relationship manager back in" is also something that needs to be discussed in the context of compliance and standards (which Brett was crystal clear on in the last call). Not sure which committee would handle that or if it is a grenade the whole group should jump on at once.

Joe Andrieu agrees: there must be a nut for the bolt and users are not going to build their own bolt. There is a need for Vendors to implement the "receiving" side of the VRM equation. This isn't about tools that are one-sided on behalf of the user. Full participation means both Vendors and individuals participate and benefit. Also, someone needs to build those tools for the individuals. In this latter sense, companies "implementing" VRM are those tool providers enabling individuals to participate in VRM relationship services.

[VRM is not SAP and the slightest hint that it is is extremely dangerous. We are talking at two different levels here. Operationally speaking, companies have to 'implement' changes to become a bolt that fits the nut. That goes without saying.

But at another psyschological/presentational level the word 'implement' fits and reinforces corporations' customer control agenda. We have to work effectively at both levels: the message to the corporation has to be 'you will only realise the win-wins by handing over control - i.e. letting the customer manage the relationship'. So it is as much about all the baggage corporate types simply assume when they hear a word, as it is about technically correct English. Alan]

Alan, respectfully, I have to disagree with the statement "the message to the corporation has to be 'you will only realise the win-wins by handing over control - i.e. letting the customer manage the relationship'." That's putting things into an extreme that is neither palatable nor necessary. I would suggest instead that what we are saying to corporations is "here is an opportunity to create more value for your customers and your bottom line. It requires rethinking what is important to you in terms of control, but at the end of the day it gives you greater predictability, better product insights, and deeper, more meaningful relationships with more loyal customers." The political argument that companies need to give up control is no more appealing to me than any of the other political consumer movements out there, from Carbon-neutral to not-tested on animals to Fair Trade. These movements (which I actually support politically) are at their core ideological and therefore subject to extreme limitations, namely a lack of common ground with those who don't agree with your agenda. VRM on the other hand, like the World Wide Web, is enabling a radically new type of marketplace that will be adopted by individuals and companies alike because it is, unequivocally, economically superior, no agenda required. No need to debate the ideology--just point to the bottom line. IMO, any other debate is unnecessarily controversial. --Joe.andrieu 17:13, 18 April 2008 (EDT)