VRM, Who Has Relationship Responsibility Anyway?

We have made it through the heatwave, but it is possible that this particular author has suffered some lasting effects of the heat. While CRMOutsiders is supposed to take an objective ‘Outside-in’ view point of CRM, writing a blog post about VRM – Vendor Relationship Management might be just pushing it a little too far, no? If you think about it, you might believe that VRM is the mirror image of CRM? VRM is getting a little more traction these days, it does have some high quality sponsors, and supporters. The VRM project page is hosted by Harvard, and Doc Searls has a solo site as well (the super smart, and one of the co-author’s of “The Cluetrain Manifesto”) has put his energy into driving it forward. As defined by Doc Searls, this is what VRM is:

VRM is a grass roots initiative which seeks to ‘Enable buyers and sellers to build mutually beneficial relationships by helping individuals to gather, store, share and use the information they need to go to market more efficiently and effectively’.

While that is a powerful statement, the following gets even closer to the heart of the issue:

In a larger sense, VRM immodestly intends to improve markets and their mechanisms by equipping customers to be independent leaders  — not just captive followers in their relationships with vendors and other parties on the supply side of the marketplace.

Where does VRM fit, or does it?

In a really nice post by Julian Gay, he builds a picture/model where Social CRM sits in between CRM and VRM. The title of the post is “Beyond Social CRM” – taken one way, this makes a lot of sense, taken another, I am not sure I agree. I have stated previously that I believe “Social CRM is based on the simple premise that you are able to interact with your customers based on their needs, not your rules.” Therefore, I believe that VRM is a lot closer, at least from my vantage point, to Social CRM than many people think. What neither Social CRM, nor CRM provide to the customer is a simple place where they can “gather, store and use their own information more efficiently”, that is a gap which must be filled. Given this capability, Social CRM allows customers (past, present and future) to help build those mutually beneficial relationships as described.

In his post, Julian makes the following statement:

VRM complements CRM and SocialCRM by enabling the ‘voice’ of the customer to be communicated directly to company’s ‘ears’. With a CRM and VRM infrastructure in place, we have a platform for dialogue, and ultimately a context for building scalable trust-based relationships.

I do not agree with this statement, or it is completely possible that I do not understand it. While some might say that the current form of the relationship (company / customer) is skewed, or unbalanced, pushing it completely into another realm, making ‘me’ responsible for it may or may not work. While individual customers may not have all of the control that they want, they do have the power of the purse. There is freedom in markets and they are free to choose with whom to do business.

Like I said, I do like the format of the diagram, and placing Social CRM as a bridge between customer and supplier controls makes a lot of sense to me. We are barely out of the gate with Social CRM. By timeline, VRM actually predates Social CRM. It is possible that the existence of Social CRM is partially a response to bridging the gap between CRM and VRM. What do you think?

8 thoughts on “VRM, Who Has Relationship Responsibility Anyway?

  1. Maybe I am just way too stuck in the old world glossary – but VRM seems like a B2C version of supplier relationship management using social tools.

    I know, I’m nuts…

  2. Martin – as far as being nuts, well, it is completely possible, but no more so than the rest of us. Wait, there was that one time where, nah, forget it.

    I do not think you are too far off. I think VRM will actually be born in the B2B space, in a fashion similar to what you describe. I will see a slow uptake in the B2C space, or C2B space more appropriately. Companies basically do it now, through RFPs and RFIs – If you want to do business with me, here is what you need to do….The question is, will the consumer market really be able to get there?

  3. The principles of VRM are very easily confused IMO…it is NOT simply turning CRM “inside out” and tracking vendors instead of customers, or completely shifting the “tracking” to the part of the “customer.” And as you note – in a B2B application of these principles, people should be doing a lot of what VRM is all about already.

    But, just as people “do CRM” in some form or another (emails & spreadsheets vs. packaged apps) – the notion here seems to be creating a more organized methodology for companies to follow so that BOTH sides of the table are equally informed as to expectations pre and post-sale.

  4. First, VRM actually does have a history of usage in the B2B space. When we adopted it for the B2C (or C2B, if you prefer) space, we didn’t know that. We just found that people understood better what we had been talking about. Still, it’s not a perfect acronym, because in practice VRM will cover more than customer/vendor relationships. (We have people working on relationships between citizens and government, for example, and listeners and public radio stations.)

    Second, our focus with VRM has been on creating tools that give individuals both independence from vendors and better means for engaging with vendors. At the base level we want these tools to be simple and open. They should either add to or use the portfolio of tools already in the Internet’s suite. A good model is email protocols. Before the Net came along, if you wanted to do email, you were stuck with AOL’s, Compuserve’s, Prodigy’s, MCI’s or dozens of others. And none of those talked with any of the other ones. Then IMAP, POP3 and SMTP made it possible for anybody to put up, move or replace a mail server or a mail client. You could use your own server or you could use Yahoo’s, Microsoft’s or Google’s. In a similar way, we want tools and conventions that give customers simple and common ways to engage different vendors. Right now we have as many different ways as we have different vendors and CRM systems, each with their own loyalty programs, each with their own data banks, each containing our relationships with them inside their systems. This is as limiting for vendors as it is for customers, because so much about customers that could be known is outside the boundaries of those companies’ CRM systems. Giving customers their own means of engagement will help.

    Third, it’s true that we all have the power of the purse. But if a free market is “your choice of captor,” it’s not free enough.

    Fourth, “social CRM” is fine as far as it goes. But it does’t cover the individual except through “social networks,” most of which are private commercial entities (facebook, twitter, et.al.). That’s why Julian Gay’s graphic helped. There is an opening where individual control and engagement are both maximized, and VRM fits in there very well.

    Fifth, it’s still early. The commercial Web is fifteen years old. Phil Windley has a great talk on the history of e-commerce. He says, “1995: The Invention of the Cookie. The End.” The cookie is how sites know you. A cookie from Amazon in your browser reminds their server who you are and where you were the last time you came around. That’s fine on the server side. But what about your side. Don’t we need the equivalent of cookies, so we can keep track of our relationships? That’s what guys like Phil are working on. Stay tuned.

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  6. @Doc,

    Thanks for stopping by and noticing our little corner of the blogosphere. Clearly, Martin had his own thoughts, and wanted to create a new post, probably scared to answer me here (tongue-in-cheek of course).

    I like all of your points, and do not disagree. Yes, I know how boring, but what Julian’s diagram did point out, and you restated, there is room for both. I do believe that while VRM has always had some traction, it has been a bit of struggle to gain acceptance across the board. When we look back at what Social CRM is, and the value it created, I believe that what will come out is that it is a bridge builder, and silo buster. For both inside the organization and to customers, Social CRM might be a good stop gap (could be short lived, not sure) which helps customers and businesses get closer.

    As for the cookie concept, I like that, it a good metaphor, one that I will likely borrow in the future, giving appropriate attribution of course.

    Cheers – Mitch

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