VRM vision

VRM, or Vendor Relationship Management, is the reciprocal of CRM or Customer Relationship Management. VRM describes a set of tools, technologies and services that help individuals go to market and manage relationships with vendors. In turn, vendors aligning themselves to these tools, technologies and services have the opportunity to build better relationships with their customers.

The goal of VRM is to improve the relationship between Demand and Supply by providing new and better ways for the former to relate to the latter. In a larger sense, VRM immodestly intends to improve markets and their mechanisms by equipping customers to be independent leaders and not just captive followers in their relationships with vendors and other parties on the supply side of the marketplace.

History

CRM systems for the duration have borne the full burden of relating with customers. VRM will provide customers with the means to bear some of that weight, and to help make markets work for both vendors and customers — in ways that don't require the former to "lock in" the latter.

• Where name came from
• Where idea came from (relationship with the Cluetrain Manifesto)
  • Core concepts & shifting landscape: Internet increasing alienation between consumer and vendor, etc.
• How VRM has helped leverage (and tries to see ahead of) ideas being worked on in the identity space, etc.

Problems With CRM

CRM, as originally envisaged, was a reasonably attractive sounding proposition to the end customer...Organisations were going to build more complete views of their customers across the many touchpoints and, through investing in 'front office software', cultural change, and integrated processes across marketing, sales and service present a more informed, joined up view of themselves that customer's would find it easier/ more rewarding to deal with.

However, more often than not, organisations under-estimated how much it would cost for the cultural change aspect....or decided (wrongly) that they could do without that bit. Many also tended to focus more on the cost saving potential of the new technologies than the relationship improvement possibilities. But one 'structural problem has emerged to surpass the many tactical issues with the vision or how it was deployed......it is impossible for any one organisation to build a comprehensive view of their customer. Some, with much effort, can build a complete view of THEIR OWN relationship with a customer; but they are largely unaware of the many other supply relationships that individuals must maintain (over 100 would not be unusual).

Only the individual, when given access to the necessary tools and processes, can build anything approaching a complete view of their supply requirements.

Project VRM

• Berkman Center - Steering Committee
• Doc Searls, Champion
• Objectives

Challenges for VRM

For VRM to work, vendors must have reason to value it, and customers must have reasons to invest the necessary time, effort and attention to making it work. Providing those reasons to both sides is the primary challenge for VRM.

• Iconoclastic anti-vendor perception
• Need killer apps

VRM Capabilities & Standards

The following are generic capabilities that we see as at least some of the capabilities that will emerge to enable and empower VRM.

Personal Data Store(s)

A generic term to cover a multitude of different and often connected services that help individuals gather, store, protect, analyze, share and use information to help them make better decisions and achieve their goals more efficiently and effectively.

Personal Data Stores help individuals manage the seven core information management processes:

- Data gathering

- Data storage

- Data analytics

- Data protection and security, including identity and data validation

- Data access

- Data volunteering/input/publishing

- Data sharing

As Personal Data Stores gain critical mass they will become individuals’ first port of call when wanting to make decisions, including going to market. They will become the means by which individuals plan, administer and organize many aspects of their daily lives. They will act as the pivotal, central interface between individuals and organizations; the means and channel by which individuals choose to conduct their interactions and transactions with service providers.

Using Personal Data Stores, individuals are able to pull together their own personal databases (potentially delegating to an agent under their control) encompassing all the important aspects of their lives, including:

- administrative records and details

- contact databases: friends, family, colleagues etc

- transaction histories: products and services purchases, etc

- interaction histories: records of correspondence

- supplier data such as 'my doctor', 'my plumber', etc

- plans for life projects (trips, moving home etc)

- personal preferences e.g. 'favored' brands and organizations vs 'blacklisted' brands and organizations

- information gathered and collected to help inform decisions and actions about all the above.

These data areas may cover all the main life 'departments' such as home, health, money, general administration, transport, communications, career, social network, leisure and hobbies, etc. Over time, Personal Data Stores will become the fulcrum of 'life management', including individuals' interactions and transactions with supplying and service organizations.

Personal Data Analytics

As individuals hold more and more data about themselves and their activities on their own databases (see Personal Data Stores) the more able they are to mine and analyze this data to generate the insights they need to make better decisions.

Personal data analytics adds value for users by:

- helping them track trends such as personal spending, calorie intake, household energy usage, car mileage, etc, etc. This could take the form of an 'annual audit' or of ongoing, bespoke or one off analytical projects

- using 'people like you' comparisons to highlight areas where their resources could be better managed

Individuals (or households) may recognize needs for consultants or services to help manage the personal data, or to interpret and maximize the data for their betterment.

Request for Proposal (RFP)

A Request for Proposal (RFP) is a message sent from an individual to a company, set of companies or market (in this case, think of using a space on the net as the "public location" or publishing base), declaring and defining a need they want to be met.

RFPs form an engagement where customers declare their needs/requirements/specifications and Vendors can respond with their offer/price/terms. This creates an environment where the consumer is given a voice and a say in the product or solution, as opposed to accepting a solution that, by it's very nature, is advantageous to the vendor.

RFPs can take many forms:

- 'one-to-one', where a named individual sends his request directly to one or more named companies

- aggregated, where many different individuals' requests are collated and passed on to companies by an intermediary. Companies then respond to these RFPs either on an individual or collective basis.

- anonymized one-to-one or aggregated, where an intermediary informs a company or set of companies that there is this number of people seeking out this particular product or service, but where the companies concerned cannot have access to their names and addresses and have to deal with these individuals via the intermediary service (until a transaction is closed).

- RFPs can range from simple commodity requests (e.g. motor insurance renewal) through to complex specifications for products or services that do not even exist yet.

Permissions Management

'Permission marketing' as currently practiced is a joke. Marketers work hard to get 'permission' to communicate from the customer, and once the customer gives 'permission' the floodgates of spam are open. Future permissions are compromised by this process. Real and specific permissions with no hidden agenda or ulterior motives are necessary for success and for trust.

True Permissions management puts the individual in control – allowing the individual to specify terms and conditions and 'rules of engagement', and to maintain control over these rules of engagement -and access (e-mail, et al) at will.

Permissions management revolves around two main areas of relevance, which increase trust and effective two-way communication: receiving information and releasing information on a timely and relevant basis. Controlling the timing and the gateway, so, for example, the "new car buyer" is not barraged with car offers for years after the purchase of a new vehicle

Receiving information

Here the individual is able to specify what messages he wishes to receive from suppliers, about what, when and how. For example, he may be planning to buy a new car in June and go on holiday in December. He therefore specifies his willingness to receive messages about new cars, in this price bracket, from these brands, in the months of April and May. Likewise, for his holiday planning: skiing not trekking, etc. (see Reverse Messaging)

At the same time, he might signal a general willingness to receive messages all year round about golf, but only from these named suppliers.

Releasing information

Over the coming years individuals will collect increasing amounts of rich personal information in their Personal Data Stores. Many organizations will be keen to gain access to various fields of this data for various purposes including marketing, research and innovation.

Permissions management will allow individuals to choose what data to release to which people (or vendors, organizations, datastores, et al), for what purposes, on what terms and conditions. For example, the individual may want to release information to:

- health researchers about certain aspects of medical history and lifestyle, on an anonymous basis, for free, for the purposes of cancer research

- details about current inventory of hardware and software to a specialist retailer/reseller, on a named but once-only use basis, for the purposes of advice on solving a computing problem and making the next best purchase

- details about brand preferences on an anonymous basis, to marketing companies, in return for a fee

Power of attorney services

There are many aspects of managing a household or a supply relationship that are tedious, time-consuming and non-value adding: renewing insurances, for example. As a result many buyers 'make do' with deals that are far from best value, just because the hassle of doing something about it so high.

With power of attorney services, individuals give agents permission to act on their behalf, within certain parameters, without the need for detailed, specific negotiation or even authorization. For example, in the case of insurance renewals, the individual may give power of attorney to the agent to sweep the market for best prices for insurance contracts with no worse terms of cover, one month before the contract is due to come to an end. The attorney service may then presents the individual with the top three choices. It may even go ahead to close the deal: all the individual then has to do is sign on the dotted line and authorize payment.

The insurance renewal example is pretty trivial, but the concept can be extended to many other areas of life including travel and transport (e.g. flight and hotel booking), home (security, maintenance and repair, etc), finances ('if savings or debt reach this level, then do that'), health, etc. This can also be applied on small-business, corporate basis, creating a VRM connection point into the enterprise.

Problem Solving Communities (PSCs)

Before finally making a purchase or carrying out a decision, most individuals need to answer a long series of questions satisfactorily These may include:

- what are the available options?

- what things do I need to do achieve my desired outcome?

- how to do x or y?

- what are the hidden pitfalls that I ought to be aware of?

- who can I trust?

- which is better for somebody in my circumstances, option A or option B?

Often, our inability to answer such questions satisfactorily is the cause of great anxiety, of mistakes (bad decisions), or simple inaction ('given that I can't answer this question, I won't go any further'). Yet, currently, there are very few sources of trustworthy, expert, customized advice that ordinary individuals can afford.

Problem Solving Communities help individuals overcome this problem by collecting the answers other people have discovered and making them available to the individual, thereby helping him avoid the need to reinvent the wheel. By answering the questions users ask – and storing the answers for re-use the next time somebody asks the same question – VRM as a process then brings economies of scale to personal decision making. If it costs $100 to research and formulate a good answer to a certain question and the answer is used only once, then it adds $100 to the cost of the product or service (or solution) in question. However, if the same answer is used 1000 times over, the unit cost of the answer falls from $100 to $0.1: a productivity boost of 99.9%.

Personal Scenario Planning/Event Management

There are many events in our lives which we never encounter enough times for us to become expert at handling them: getting married or divorced, moving home, organizing a trip round the world, coping with the death of partner, coping with a life threatening illness or accident, etc.

Scenario Planning identifies (as best as it can) 'best practices' or at least, 'things you should think about', 'pitfalls to watch out for', 'the main steps of the process'.

For example, if you are getting married, the planning service will help you remember and consider all the things you need to organize such as venue, ceremony details, invites, catering, travel and transport, honeymoon, wedding attire, wedding presents, etc. etc.

At this level, it is a pretty generic advice service. At the next level it begins to drill down into the detail: what sorts of venues do you want and where, how much do they cost, are they available on the date in question, what are the necessary travel arrangements? Etc. This next level of detail therefore includes a wide range of information from and about suppliers, p2p reviews, etc. The third level involves the provision of specific tools and services to help individuals actually implement their resulting decisions: book the venue, arrange the catering, send out the invitations etc. Scenario Planning services are therefore likely to use many other person-centric services (such as Requests for Proposal and Problem Solving Communities) as modules of a broader, more integrated service that focuses on a specific problem.

Reverse Messaging/Attention marketing

Reverse messaging is a 'light' form of Request for Proposal/Permissions Management. Under Reverse Messaging individuals signal their willingness/wish to receive messages about specific items/brands at specific times. A reverse message says 'I am currently in the market for a ... new credit card/lawnmower/washing machine ... and I am willing to receive messages from suppliers of these items'. In most cases, these reverse messages are collated and aggregated by intermediaries who sell them on to suppliers as leads. A key part of this service is the user's ability to turn messages on and off ('I am no longer interested in offers about credit cards'). Users may also specify e-mail or IM addresses which have a life span designated and controlled by the user.

VRM Example Uses

List practical, leading examples of best proposed uses for VRM. Link to Use Cases (if any)

• Personal Address Manager

VRM Companies

Companies, sellers, vendors all may have existing examples of VRM. Please post them here.

Additional Links

• VRM FAQ