VRM on the brain continues…
Another (slightly modified) reproduction of an email on VRM that I sent a few months ago, this one to Doc Searls and Britt Blaser (hey, guys—I’m still following the VRM effort, and I hope to have the bandwidth to start contributing again before too long). The email was largely a summary of a conversation that Britt and I had about and around VRM, and seems relevant to some of the discussion that’s been happening on the VRM mailing list of late. Enjoy.
The core of Vendor Relationship Management (VRM), in all its incarnations, is a respectful relationship between vendors and customers. VRM is not anti-vendor: at most, it is anti-business-as-usual.
While engaging in VRM does mean that vendors must do without some “rights” that are currently taken for granted, and their associated practices, VRM also requires that customers actively engage in the relationship, taking on the responsibility for communicating to vendors in a way that they can easily understand.
## START METAPHOR
A vendor/customer relationship based on today’s CRM places far too much weight on each party “reading” the gestures—the implicit statements and questions—made by the other, leaving little or no room for explicit communication. CRM “relationships” are like a newly-married couple that never speak to one another, relying entirely on body language and facial expressions, mood and gesture, to interpret one another’s behavior.
These non-verbal layers enhance communication, and help to create a rich, textured relationship, but without a foundation of clear, open, and explicit communication, these readings of the other party are guesses.
Each guess about what the other partner wants or needs from the relationship leads to another guess: do they like what I’ve done, or not? Would the other idea that I had have been better received? A model of the other partner is built, layer upon layer, and each party is engaging with the model of their partner, not with the actual person.
## END METAPHOR
The benefits of VRM vary depending on what role one is playing in a relationship, and the goals of that relationship, but there are common threads. From a vendor’s perspective, each individual that they engage with is made up of more data points than the vendor could possibly hope to collect and interpret, and that’s a margin-eating problem; where CRM almost requires that the vendor’s “relationship” is with an impressionistic (and often out-of-date) thumbnail sketch of a person (as in the metaphor section above), VRM allows the vendor to engage with the actual person. The seeker and vendor agree to treat one another with respect, and (we hope) that allows them to be more open with one another.
Two other notes on the vendor’s perspective on VRM:
Many companies have entire divisions dedicated to purchasing. The idea that finding and acquiring what you need as efficiently as possible, taking advantage of your existing relationships, is one that’s immediately comprehensible to vendors. The existing language, models, and tools of corporate purchasing may be useful for informing VRM development and also for conveying the importance and benefits of VRM to vendors.
In addition, presenting VRM to vendors as a “framework” or “API” may be advantageous. Many vendors understand CRM as an umbrella term that encompasses many different implementations; we should make it clear that VRM is an analagous umbrella, providing ways to engage with current or potential consumers in a more effective way.
From a “seeker” perspective, the problem seems a little more straightforward: you can never get back the two days that you spend figuring out which cell phone you want to buy and who to buy it from. If VRM can help you quickly and easily figure out what you want and communicate those needs/desires to the people who can fulfill them, VRM offers a real, immediate benefit.
Much of our behavior as customers is defensive: we ask our friends’ opinions, we search the Web for unbiased reviews, we compare vendors’ prices online, use disposable email addresses or fake profiles to get access to vendors’ special offers…because we see vendors’ interests as opposed to our own, much of our relationship with vendors comes down to simply trying to avoid getting screwed.
REPUTATION AND TRUST
While VRM is fundamentally about one-to-one relationships, it requires a superstructure of reputation in order to work well. What is the reputation of the vendor, customer, or prospect that I’m engaging with? What do the people (or vendors) that I trust think about them?
The importance of reputation and trust points to another key VRM issue: the reputation/trust concerns for any VRM data storehouse. In some VRM implementations a central data repository is likely to be necessary (or at least very desirable). Under what circumstances will it seem appealing and worthwhile to people to share data with a third party? To put it another way, is a big storehouse (vendor-neutral VRM data store) actually better than many little silos (vendor-specific CRM) if you still don’t trust the landlord? What can the landlord do to earn people’s trust?