VRM, CRM and social media

Posted: September 3, 2010 in CRM, Technology
Tags: , ,

More on VRM CRM

Doc Searls started a great conversation about VRM and CRM last week at the Berkman Center’s conference on the subject.  Berkman is part of Harvard Law School and for those who follow VRM (vendor relationship management) the conversation is not new.

I love this quote that Doc posted in his blog (http://bit.ly/b6AcwW) from Dan Miller who hosted a panel that I was on:

“…current solutions that are based in CRM and social CRM capture and conduct analysis on a broad set of customer generated data and metadata. Companies think they are doing a better job of paying attention but, whether they admit it to themselves or not, they continue to use their resources to analyze activity, target messages and promotions and influence future activity.  That’s not listening or engaging in a meaningful conversation.

Sooo true.  He goes on,

“VRM involves a totally different engagement model. “Users” (be they shoppers, searchers, mobile subscribers or “other”) initiate conversations with their selected vendors through a trusted resource or advocate. They can compare notes with other shoppers/customers and, while they may be loyal to a brand, they are more loyal to themselves and their peers. In the ideal, the power shifts to the shopper in ways that will disintermediate traditional channels (like the contact center) and influencers (meaning commercials and advertisements).

The train wreck is not the result of there being too many names for the social CRM phenomenon, it is that CRM and VRM are on a collision course whereby one side seeks to grant more power to buyers while the other seeks to retain nearly all the power by pretending to do a better job of listening.

I am not sure about the train wreck part of it, but I am in violent agreement that vendors have been doing a not-so-wonderful job of really listening to customers.  In a capitalist system I am not sure that a vendor can listen and generate continuous growth.  The current crush of interest in all things social is a telltale sign given that most of what we value in social media is its ability to deliver outbound messages rather than gathering customer input.

On the other hand though, companies like Communispace have made it their business to listen and Communispace in particular seems to have a winning formula because they are growing like a proverbial weed even in the recession.  But this brings up another issue for me.  Vendors might now be listening or they might not be listening as much as they ought to but in the free market I see a great deal of creativity expressed by regular people that forces vendors to listen albeit imperfectly.

If you’ve followed my postings on some crude research (http://bit.ly/bGEVex)  involving searching on terms that include a company name and the word “sucks” you see that even if vendors are not listening, customers certainly are speaking.  And the way they speak is having an effect.  If I was a vendor I would be loath to find out that my negatives were so high that they elicited hundreds of thousands of hits for a search on my company name and “sucks” but that’s indeed what happens for most companies that I have studied.

What concerns me, and the key to understanding all this is who pays.  CRM grew up organically because vendors saw an opportunity to build products that helped to automate front office business practices.  In fact CRM exists because of the profit motive, i.e. vendors figured out how to make money selling it.

I can’t say the same for VRM and that’s one of the big hang-ups for it.  Who makes VRM and who pays for it?  The customers don’t seem interested in paying for anything so don’t look there.  And savvy vendors tend to look at VRM as slitting their own throats.  Pretty quickly you realize that while there is a need for what VRM does, there doesn’t seem to be a constituency ready to pay for it.

But you do see a movement of individuals calling corporations to account with blogs, wikis, web sites and other self-generated tools aimed at the soft underbelly of corporate indifference.  That’s why my conclusion about much but certainly not all of VRM is that it could use an infusion of social media.  Note though, I do not advocate social CRM merging with VRM because that would not be helpful.

VRM also deals with things that CRM doesn’t even attempt such as the myriad legal issues governing the burgeoning vendor-customer relationship.  But in all of this social media, and especially community development as practiced by Communispace and championed by Eric von Hippel of MIT, could be a major boon to VRM.  Right now VRM seems to be doing customer outreach in ways that are more difficult that they have to be.

Much as I like the association of CRM with VRM I think the real association ought to be between VRM and social media.  Increasingly, social media looks like the once and future root of both disciplines.

Comments
  1. […] who was a very helpful contributor to VRM+CRM 2010 a couple weeks ago at Harvard, followed with VRM, CRM and Social Media. While mostly complimentary, Denis […]

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