Doc Searls has been the leading evangelist for it. Chris Carfi has written about it. I've dabbled a bit about it -especially in my stuff on Personal Value Chains (PVCs)(no relationship to the piping) and certainly with the CRM 2.0 wiki which is defining CRM from the standpoint of customer collaboration and engagement. There is an important wiki called Project VRM (run through The Berkman Center for Internet & Society at Harvard Law School) on it. And Denis Pombriant is writing about it which automatically makes me even more interested in it. Even if I didn't come up with the idea (damn!)
The "it" is Vendor Relationship Management and It's time for a bandwagon amongst CRM practitioners, consumers in general and, yes even vendors. Screw the name for the moment, since its pretty lame and not reflective of that much, though there isn't anything better than VRM, I guess. We've been doing the bridging between CRM and VRM - between the businesses and the customers - with CRM 2.0 as the term - but that's not a whole lot better as a name. But naming convention aside, collaboration and engagement between the business and the customer creates a lot more value than "taking a side" though, admittedly, I'm a customer evangelist first and foremost. I just don't hate businesses for being stupid and think there is a lot to gain if they do things right.
The Definition of VRM/Social CRM/CRM 2.0
As I'm writing, I kind of like the name Social CRM rather than VRM (and also as the one to replace CRM 2.0) I think, but rather than debate it, let's not worry about it, and instead dive into what VRM/social CRM is.
Here's the "official" definition of VRM/Social CRM put rather bluntly in the About section of Project VRM:
"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."
Some Observations
What makes sense to me is that for the longest time (first in 2003, I think), I've been preaching that the business ecosystem has been seized by the customer. I've seen quotes like these emanating from the more foresighted businesses (at least, those that have a theoretician at the helm or in power somewhere) and publications, that certainly should resonate with all you right-brainers out there:
"Today buyers and sellers, friends, fans and flamers are using cheap, ubiquitous technology such as blogs and social networking tools to connect, create, share and communicate with each other-regardless of the time and place. Messages, positioning and brands are suddenly in the hands of millions of people and largely beyond the marketer's control." (Source: "When Customer Take Control", Web Trends, 2007)
"Customers definitely want to help shape and control our brands to keep them authentic and relevant." (Source: Patty Seybold's Outside Innovation blog, Nov 16, 2006)
"Today's banking customers have a new set of technology tools to use in interacting with their banks, truly putting them in the driver's seat..." (Source: Community Banker, October 2007)
"If consumers are in control, they're going to figure out how they want to watch. We have to find the right solution." (Source: Beth Comstock, President, NBC Universal, Fast Company interview, May 2007)
And of course
"No longer is the corporation the fulcrum around which customer groups and suppliers revolve. In 2004, the customer is now the pivot point....There are signs that the change from a customer-focused corporate ecosystem to a real-time customer ecosystem is not only well underway but already here." (Source: CRM at the Speed of Light: :Essential Customer Strategies for the 21st Century by Paul Greenberg, 2004)
What makes this movement (of sorts) so compelling is what it calls upon business to do. The truth is that the customer control of the business ecosystem is just part of what actually has gone on with consumers in the past three years or so. What may or may not have occurred to you is that the change has been social, not commercial. Customers also known as human beings have been figuring out that they can communicate in real time or nearly so at low cost and with no real barriers to entry via the Internet or via web-related technologies and forms of community regardless of whether or not anyone but others like them were involved. So it's a peer to peer social transformation going on. The Cluetrain Manifesto in 2001 got it right from the customer side, but even that was merely the tip of this. It is human beings beginning to change the way they communicate and how they personalize that communication. So if they want to send text messages, they do it with their now famous economy of language like OMG, and BFF, etc which is understood by others communicating in the same way. They don't give a rat's you know what if business people think its immature or not professional. Its the way that they communicate. Others like to complain in the fashion of drama queens and kings on Yelp or Yahoo's local communities or via blogs. Others like to comment positively or negatively about content put up in cyberspace for all to view. They don't care whether or not business gets driven by their comments. Its simply the way they've chosen to communicate with their peers.
That said, business is scrambling to figure out how to intersect these peer to peer relationships when the basis for the relationships is so different than the basis for a business relationship between customer and company - apparently (though not really). For example, the foundation of the peer to peer social communications is the equivalent of four friends wearing jeans and sweats getting together at a coffee shop and shooting the breeze. Would you want a company (or corporate flack/hack) in a suit and tie pulling up a chair and saying "hey, let me join in - though I barely know you?" Of course not.
Yet business has to figure out how to change its rules now since the customers can be as indifferent as they care to or as engaged as they care to - if they feel that there is a reason compelling enough to be engaged with a business. That means that say it loud now, compadres, CUSTOMERS ARE IN COMMAND OF THEIR OWN DESTINY BECAUSE THEY ARE HUMANS WITH NEW WAYS TO COMMUNICATE WITH THOSE OF THEIR OWN KIND - HUMANS!
Which makes VRM or Social CRM very compelling as long as it isn't simply an excoriation of business but a legitimate approach in finding ways to get business and customers to collaborate in a customer controlled business environment. That's what it says it does, and, I gotta, say it sounds good to me.
The one thing I don't agree with is a noticeable tendency to dump on CRM by some of the VRM evangelicals. That's a useless exercise and I don't say that because I make a living at CRM. I'm not wedded to anything. In fact, the only living I'd ever be worried about losing is if I played for the Yankees or sat in their front office. Beyond that...nah. I DO say that because CRM has actually been valuable when done right for at least the operational side of a company's relationships with customers. Obviously it has its holes and weaknesses and I'm sure VRM, if and when it gains the traction I hope it does, will too. There is room for refinement in everything. VRM is what I and others have been saying is the model for CRM 2.0 - the move from managing customer relationships to figuring out how to engage and collaborate with customers - and how to build a culture that accepts that control has been ceded to the customer. So, different color outfit, same kind of clothes. That's good too, because the baby can stay, while the bathwater goes.
A Not-So-Modest-Proposal
Okay, so briefly, here is what I'm going to do. I'm going to be writing about this more frequently and inviting more onto the platform to take the dive with me and I'm going to continue to evangelize for the voice of the customer as VRM though I may take the liberty (if its okay with you, Doc Searls) of calling it Social CRM so it isn't too much of a leap for those in the CRM community to make. This will be added somewhere on the CRM 2.0 wiki as a topic that we can delve into and also on the MyCRMCareer website and I'll incorporate some discussion into the fourth edition of CRM at the Speed of Light. I'm also going to begin to participate in the Project VRM wiki a bit (though not 'til early next year) and would encourage you to do the same. I'm also going to write an article or two on it.
That's at least a start for something that I think has strong impact within the CRM community.
Coincidentally I wrote on VRM a few days ago; repeating my comment here:
“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”
This is cool; but I believe there is a social spin that can/should be added to this: what if the “VRM” went beyond helping me manage more my relationship with my vendors? What if it allowed me to manage my relationship with others that also have relationships with this same vendor due to the same products/services? What if, as a group, we decided to make ourselves available to address questions for potential customers for that same vendor/product?
Such aggregated power would be a force to reckon with; very interesting opportunity indeed.
Filiberto Selvas
Posted by: Filiberto Selvas | November 22, 2007 at 12:35 AM
Paul
Geat post. But VRM thinking is not new.
The marketing journalist Alan Mitchell started writing about it in the UK trade magazine Marketing Week almost 10 years ago. He expanded his thoughts in his excellent book, 'Right Side Up' in 2002. Take a look at his Right Side Up blog at http://www.rightsideup.blogs.com/ for lots of good resources.
Best regards as ever, Graham
PS. Please ditch the Snap Shots add-on. It pops up like the worst kind of in-your-face advertising every time the cursor hovers even anywhere near marked text or sidebar ads. It makes reading your wise thoughts almost impossible!
PPS You are right, the VRM acronym is truly awful.
Posted by: Graham Hill | November 21, 2007 at 09:20 AM