ResearchTalk

Remember ‘The Cluetrain Manifesto’? It’s the book co-authored by pre-eminent marketing practitioners including Harvard University’s Doc Searls. It coined the phrase “markets are conversations”.

Well, Mr. Searls is at it again. Not satisfied with inspiring consumers to use the web to redress the balance between marketers and consumers (e.g. via blogs), he wants to move things up a gear. And blogging strategist Adriana Lukas is along for the ride.

VRM…what?
VRM stands for Vendor Relationship Management. Put simply it’s the opposite of CRM.

Put less simply, says Lukas, the intention is “to equip individuals and vendors with tools to enable mutually beneficial transactions and to readdress the balance between demand and supply. It doesn’t get your pulse racing!”

The impetus for change, she adds, comes from an intuitive sense of what people prefer.

Consider a street market. Commerce here comprises three elements: conversations, relationships and transactions.

By contrast, online commerce tends to be just transactions, without meaningful conversations or relationships. “Online advertising isn’t really about conversations [it’s one-way shouting], and CRM isn’t really a relationship [it’s about hoarding and potentially mis-using data],” says Lukas.

VRM is therefore predicated on the notion that empowering individuals to take charge of their data (i.e. giving them the ability to decide who to share it with, when and how) will foster better relationships between consumers and brands, and ultimately lead to healthier markets.

A New Era
The inspiration for ‘Cluetrain…’ apparently came from Searls et al ruminating about the different dynamics and rules in the online world, and the inability of brands to adapt. A well-known example is where Dell gave a high profile blogger poor service. Dell’s reluctance to ‘join the conversation’ when the blogger posted about the experience resulted in a major backlash which, thankfully, Dell seems to have learned a painful lesson from.

Perhaps the tide is turning in favour of VRM given the growing support for somewhat related initiatives such as OpenID (single sign-on) and data portability. The latter is designed to ensure vendors do not lock-in consumer data to unfairly prevent or discourage switching. When Searls speaks to marketers he likens data lock-in to people lock-in (slavery), clearly hoping to elicit an emotional reaction! “We have to think about whether lock-in is necessary to managing relationships,” says Searls.

New types of data are also moving online, and vendors may be wise to consider VRM principles. Take Google, Microsoft and their recently launched health initiatives. These are ultimately aimed at holding medical and health records in one place – very scary. Both stress the security of their systems and the benefits for both health organisations and individuals. But these may not go far enough for VRM proponents.

Own Terms
These are early days for the VRM movement. Although Searls is sponsored by his employer, he is open-sourcing development to attract the best and most passionate minds to the cause.

Spearheading progress from her London base is Lukas who, although unaffiliated to Searls, has come to a similar conclusion on the need for VRM: “…it’s a culmination of what I see the web and the social web doing to individual empowerment, taking it further from conversations to transactions.”

Through regular meetings at her VRM Hub, Lukas is developing a web-based protoype to put a practical face on the concept. But further down the road, is there is a risk of VRM stalling if marketers and consumers fail to buy into the concept?

Lukas promotes VRM as win-win. She expects brands to be able to transact far more with those consumers who take charge of their own data. The example she cites is based on her love of wine. If VRM enables her to create a ‘feed’ of information reflecting her wine likes (say drawn from her blog and various websites), and then offer this to a series of wine merchants, she would in effect be providing vendors with both the ability and permission to sell her relevant items. If anyone misbehaves (by spamming, etc.), she could remove them from the feed. The rest would benefit from seeing continually updated needs.

But all this seems a lot of work for the average consumer. Lukas agrees and says that the answer is, once the infrastructure is built, to encourage developers to build compelling VRM applications that individuals want to use.