Creative Agency Secrets

What will it be like when consumers control their own data and become the driver of relationships with vendors?

Went to another VRM Lonodn meeting last week organised by Adriana Lukas.

Richard Marr has written a good synopsis of his undestanding with some very handy 'use cases" illustrating what VRM might be used for in the future 

Insurance

Bob is looking for some home insurance. He inputs data about all the belongings in his house that he wants covered, his postcode (zip code if you’re merkin), and then sends a message through the VRM host to insurance companies giving them one-off access and asking them for a quote. The insurance companies respond. He then selects the quote he wants, and provides them with his identity and whatever other personal data is required to establish a relationship. The chosen insurance company can then be given persistent access to Bob’s private house contents data so that he can quickly re-insure when he buys something to avoid being underinsured.

The insurance company wins because they can cut out the brokers. Bob wins because he gets cheaper insurance and can reduce the hassle of re-insuring. He doesn’t want to be underinsured if something goes wrong.

Neat, does it for me, particularly as the average fee paid to brokers for their service is £50 which would be a nice cost reduction on MY home insurance. 

While writing, Adriana has uploaded a slideshow of her vision of the user experience for VRM here 

I particularly like her summary of recent online applications that have created a movement behind the initial software.  Blogging is the killer app for conversations; Social networks are the killer app for relationships.  Could VRM be the platform for killer apps for transactions [slide 7].

She gives a travel example in slides 10 - 15 showing all the different places online she puts her travel information - from flights to photos and suggests these should come together into a single central place, personal to her. 

The working title for the online place where you put all your data is "Mine!" - double entendre intended. 

At the end is the link to the London VRM Hub wiki - come and join a meeting if you are curious.  They happen monthly. 

Customer data has been an important part of the advice I give most of my clients for a long time - since I worked for Peppers and Rogers I have tended to suggest that it be called Customer Relationship Management or CRM.  

But that time is now moving into the past.  The future is about 'flipping' the control of customer data out of the hands of the corporation and into the hands of the individual.  

You and I both know that many organisations have our personal data - whether it is just logins to websites or fully comprehensive bank account and credit card details from vendors we use online and offline.   Do you have a complete list of these companies and websites?  Betcha don't.  I certainly don't.

 And so when something changes - you move house, for example or you decide that you no longer want your data to be held by a particular organisation or group of companies. you have to write individually to each to 'unsubscribe' or change or amend your customer data profile.  Which is frankly a right royal pain in the bum.

Early days yet - but a possible change is for you to hold all the data about yourself and for companies and organisations that want to have a relationsihp with you to come to a private place online that you control and manage and to"collect" your data there for their purposes - with your permission.  And so if you change something, you update in ONE place.  And if you change your mind about a company and you no longer want their newsletter, you go to one place and change their permissions - maybe letting them know automatically in the process why you did or what they did to make you alter your view of them and their brand.

Sounds good?

It is called Vendor Relationship Management.  VRM.  

And the principles are still being worked out by some of the leading minds of the online age - Doc Searls and Adriana Lukas.  I am working with Adriana on the London end of the project.  

If you want to learn more, read this slide deck from Doc updating his "Cluetrain Manifesto" view of the world 10 years on… and explaining some of the VRM principles as he sees them

And Adriana's One pager about VRM post which states her future-gazing view of the future.

If you are a business here's a possible future for you

Imagine having your customers share with you what they like, want and
think of you. At the moment, you are dependent on market research,
which is like looking through a keyhole at the rich ‘user-generated’
world. Imagine being able to relate to your customers, consistently and
persistently, where they contribute directly to your supply chain where
it makes sense - whether it is R&D, product design, distribution
and marketing. Interaction with them is modular, intuitive and
user-driven freeing much of your resources spent on marketing and
transaction cost.

And if you are a customer here's a possible future for you

The ability to manage and analyze your data will give you better
knowledge about yourself, the kind of knowledge that is the holy grail
of most companies’ customer data management. The awareness of your
preferences, understanding of your needs will help you to articulate
them easier and strengthen your position with vendors.

If you want to learn more about what you can do for VRM and what VRM can do for you - come to this workshop that I'm helping to run 

Tuesday April 15th, the theme is VRM and how it addresses (and
hopefully redresses) the imbalance between individuals and their
relationships with vendors, companies or institutions.

Many companies are continuing to send direct mail to large audiences who have not opted in to recieve it.

Read this if you want convincing about what the ‘average’ consumer in the UK does with it.

And if you want to see the future do some research into VRM. Vendor Relationship Management or the ability of the consumer to pre-select the brands they will allow to communicate with them.

Definition: VRM, or Vendor Relationship Management, is the reciprocal of CRM or Customer Relationship Management. It provides customers with tools for engaging with vendors in ways that work for both parties.

CRM systems until now 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.

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.

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.

Be scared, be very scared if you company is a heavy DM user and has not started to work towards an adapted / altered database marketing strategy - your world is dying a slow, lingering death and your brand’s marketing budget will go with it.

Learn more by subscribing to the Harvard ProjectVRM updates; James Burke does a good summary here and Read Adriana’s blog (link is to all her VRM articles). And if you want to move towards database marketing using a cost-effective, laptop based database package, have a look at Honeycomb.