Project VRM: Define and advocate a Vision of a VRM World

VRM is a framework to create a level playing field between buyers and sellers, vendors and customers; improving the relationship and the interactive experience, changing how they initiate, develop, maintain, and continue mutually beneficial relationships. It is targeted to rebuild marketing credibility lost by enterprise-centric systems. A VRM world is designed for economic growth by making markets wider and deeper. Only 40% of those on-line do financial transactions on-line. And only 40% of the world is on-line. While the Internet has made it possible for customers to become much more educated before they buy, it is still has not reached the full potential possible from an agreed mutually beneficial relationship by both buyers and sellers. VRM is dedicated to improving commerce in a way that enhances people's rights, empowers them to act, while making vendors more responsive and efficient.

This page discusses the VRM vision  for the next 2 - 5 years.  

In addition to meeting VRM goals, our VRM vision is a force for positive economic good (more than zero sum; zero plus) which means:

• VRM helps individuals either collectively or alone to conduct fair economic transactions with vendors.  (examples: objective information systems providing information about items for sale -- traditional: Consumer Reports, emerging: buyers blogs)
• VRM provides a 'marketplace' where goods and services can be transacted between buyers and sellers where there is sufficient transparency to conduct business fairly.  (examples: traditional: local farmer's market, emerging: Ebay)
• VRM provides a forum where individuals can express their purchase requirements to potential sellers.  (traditional:  Classified advts "wanted" section.  emerging: MyPadz.com)
• VRM provides a forum for buyers and sellers to understand what is for sale and buyers wishes/terms along with a negotiation channel/mechanism.  (examples: traditional: B2B RFQ to known suppliers.  emerging: a practical system for individual buyers to express wants to potential known suppliers)
• VRM enables internet commerce to reach its full potential.  Only 40% of the world is on-line. Only 40% of those on-line perform financial transactions on-line.

1.  Educate the world about what VRM is and its potential --

• VRM created as a reaction to poor CRM practices that became enterprise-centric at the expense of positive buyer experiences
• (some CRM is OK: sales relationship management, more detailed info per customer, and the resulting corporate initiatives)
• corporate overreach (too much push, less personal customer service, unfriendly automated services, data breaches)
• what VRM can do better, and the benefits for both buyers and sellers
• Promote user-centric principles (e.g. choice of information organizing systems, etc.)

• freedom to change providers without hassle (re-entering all your data, etc.
• properties of identity

2. Ride the tide of new and existing user-centric mechanisms

• Recognize existing standards that may be applied for VRM Services
• Internet consumer information to homes, laptops, phones, cars, people (relevant, objective, just-in-time, trusted, referenced)
• Consumer collectives informing via broadcasts, social networks, blogs — smarter buyers, seller accountability
• Better tools to make yourself a proactive part of a crowd about issues you care about.
• Better information (more, sorted, applied semantics, localized, structured, faster)

Recognize Existing Companies / Processes that practice good VRM

• Ebay (eliminated the middleman, trusted sellers, price set by market demand)
• Kayak -- just the flights you want to see organized by price without the packaged travel kiretsu traps
• Amazon -- state of the art procurement and shipping methods, low prices

3. Encourage and promote user-centric infastructure emerging products

• Long tail marketing at mass-market prices
• User-centric information systems
• Disruptive user-centric business models
• Solve specific use cases using VRM workflow:  (e.g. Change of address)
• Stay aware that any mechanism we envision is subject to abuse.  The better mechanisms are self-correcting. Ebay works because reputation is more important than maximizing profit on a single deal
• Differentiate between what needs to get built and deployed next vs. what is already done that helps VRM's value propositions

- Information Gathering: Critical first step leading to sale. Information is easier to get, more objective, gathered from vendor, other customers, market analysts, trusted advisors. Better understanding of what is required to deliver the product/service. Social networks will continue to gain in importance as they migrate from 'walled gardens' to 'just-in-time relevant data feeds'

- Buying: More opportunity to inform vendors of specific criteria, Ability to send an appropriately detailed RFP to an automated system. Permissions marketing turns into real and specific permissions with opt-out options, sunset clauses, etc. Giving agents permission to act in their behalf.

- Ongoing user experience: Customers feel more of their terms are met, and a more mutual relationship. They stop feeling 'used and abused'.

Possible tradeoff of abusing privilege -- Old fashioned marketing methods will be constantly re-tried because people don't know what they want. People can be talked into buying what they don't need, and often times feel it was the right thing to happen. If a vendor sells something to a customer they didn't know they wanted, but are glad they bought it later, is that wrong? VRM will perhaps be as defined more by its attitude than by its processes.

Agent attitude will be critical to maintaining positive relationship with customers

- Marketing: Provide information user's ask for; targeted in a manner (content, delivery mechanism) that is acceptable to customer. Customers who feel more positive affinity with vendor will share more information, which can be used for more targeted messages, product feedback, etc.

-Sales: More targeted sales means less time and money wasted on low response high cost mass marketing, better affinity with customers, more repeat business. Greater conversion rates. Reduction of sales friction. Automated sales for lower cost goods. reduced channel costs, faster inventory turns, more distributed and networked centers (Amazon). Ability for customer to monetize the value of personal attention.

Sales types: one-to-one, aggregated,

- Support: Support becomes more opportunity to generate customer satisfaction leading to repeat business. Cross sells, upsells are more likely with increased affinity and trust, and less likely if too proactive.

Even with increased mutually beneficial relationships, there will always be the need to pitch products the customer does not know they want. VRM will not eliminate this, but with more buyer affinity, the buyer will be more likely to respond positively to these pitches.

- User-Centric Identity Systems -- trusted information is first -- qualifies buyer and seller to eachother.

- I-Cards to communicate user-permitted information between trusted parties

- A user-centric identity communication protocol to allow trusted information interchange -- efficient standardized trusted means of passing information (e.g. XRI)

- software applications for better more directed search

- RFP tools: methods to notify potential vendors of requirement for big ticket item; willingness to receive response during buying cycle, and stop it when cycle ends. Analytics to provide businesses with market trends from such services (how long request:buy, geography...)

- Semantic Search Infastructure to search for existing answers in known knowledge bases. data must be available at low cost. (questions, search, storage, results, analysis).

- DBMS, UI, Access (device agnostic incl. mobile) identity management, data entry/exchange, security

- Tools to accelerate process change, legislative, culture, mind-set change

- Tools to collect and store data with cross references to known metric tautologies and associated analytics -- calories, household energy usage, car mileage

- Agnostic impartial non-aligned intermediaries, making individual requests easy (or at least information is gathered just once unless customer changes his mind) Request process must help customers articulate what they want (this is part of information gathering -- user's won't know what choices they have or what these mean until they are in the middle of info gathering.)

- A Personal Data Store to allow users to better manage their relationships with vendors. For example, change of address can be done once and inform all vendors. Business rules built around this concept allow specific exception handling under user control (e.g. don't turn off the power at my old home until 1 week after I move into my new home; send bills to my new home starting 1 week before moving day, etc.) Personal data may include:

• administrative records and details
• contacts
• transaction histories
• supplier data (from doctors, plumbers, etc.)
• personal preferences (favored brands, blacklisted organizations)

- Trusted Identity Providers who can authenticate specific users and specific (subset of) claims about them.

- Informal and formal bazaars/marketplaces for buyers and sellers to meet, negotiate, deal. Buyers can opt to share information. Once agreed to, more information can be shared with one-click. Payloads may be various sizes; one-click is dependent on user confirmation after recieveing sufficient information to make an informed decision

- Power of Attorney Services (Agents who can more efficiently accomplish negotiation, research, and/or authorization for individuals) example: buying lower cost insurance with good or better coverage, travel research and booking. for vendors: dynamic pricing, alerts for likely customer defections in time to take preventative measures, efficiency communicating policy changes

- Problem Solving Communities -- The Social Network service -- trustworthy, expert, customized advice. Between free advice from networks that requires significant time finding and trusting the advice to professional consultants, VRM may bring economies of scale to personal decision making. For corporations, some may be able to leverage a group willing to improve customer experiences, focus groups for product improvement, and make other suggestions to improve customer service.

- Transaction services

- Personal Scenario Planning: graduating, job search, house hunting, car buying, moving, getting married/divorce, having children, long trips, death in family, serious illnesses, unemployment

- Personal Information Management services that include automating data gathering, invisible reliable data storage, easy data analytics, solid data protection and security, identity and data validation, fast, easy data access, options and benefits with data volunteering/input/ publishing.

- Digital notaries

- Digital Sales Reps (agents)

Market Opportunities

The following scenarios were discussed at a workshop at DIDW in Sept 2007 regarding probability liklihood. These present opportunities for a better world by promoting positive VRM Initiatives.

Market Inhibitors

Part of the VRM Vision is to actively work to prevent breakdown of systems either by restrictive laws or anarchic events. Either will reduce economic growth and restrict individual freedoms. The following are possible future scenarios to be avoided.

In an applied discipline like marketing, good theory must be grounded in the real world. The maps must be well drawn, or they will lead in the wrong direction. For example, if we envisioned a VRM system where a single customer places a requirement for one airplane seat on their own site that would require an airline employee to read it, make an offer, and engage in price negotiation. because of labor costs, it is inevitable that the lowest cost for the airplane seat would be higher than an automated system (like Kayak.com) that automatically informed that single customer of the lowest price available, would ‘teach’ the customer (through their on-line agent) how seat prices follow a ‘demand curve’ as the day of the flight gets closer, and allowed the customer to make an informed decision.

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

In practice, the tradtional 4P approach (Product price promotion place) has led to a manipulative attitude toward buyers.  It is  a stimulus-response model, similar to a fisherman's relationship to a fish.  The 4 P’s became too manipulative. And then consumers got smarter, which now has damaged traditional marketing credibility.  CRM has been compromised by the 4Ps.  

VRM needs to be careful not to fall into the same trap.

VRM is part of the is change to relationship marketing (relationships, networks, interaction)  The 4Ps become a supporting rather than dominating role.        CRM tools didn’t prevent the 4P’s from overwhelming it. Through Internet technology, the customer’s role has become much more important. VRM may be more attitude than tool.

VRM is helping to move us from an industrial society to a value society.

Primary VRM markets:
- Customer markets (existing and prospective customers)
- Supporting markets (referral markets (satisfied customers who recommend the supplier to others)

Secondary markets for VRM:
- Supplier markets (be a partner rather than an adversary)
- Employee markets (right employees recruited, promoted)
- Influence markets (finan. Analysts, journalists)
- Internal markets (org and its staff)

Relationship Marketing values shared by VRM:
- All parties (buyers & sellers) should be active and take responsibility.
- Long term collaboration and win-win make this more than a zero sum game.
- Relationship and service values instead of bureaucratic legal values

This section references the book; "Total Relationship Marketing" by Evert Gummesson