Month: February 2015

Customers need scale

Businesses love to say “the customer comes first,” “the customer is in charge” and that they need to “let the customer lead.” But for those things to happen, the customer needs to actually have the ability to do all three:  to come first, to be in charge, and to lead. And do do all three the same ways with all the companies they deal with.

scale-leverageIn other words, the customer needs scale.

Scale is leverage. In today’s networked marketplace, the customer doesn’t have it. She has to deal with every company in ways those companies provide, which are all different.

That’s why she’ll never get scale from the companies she deals with, no matter how well-intended they might be. They can greet her by name, give her a hug and lavish discounts and benefits on her, use AI and Big Data and analytics out the wazoo, and it won’t make a damn bit of difference, because 1) they are only one company, among zillions, and 2) she’s not in charge. In legal terms, she’s always the second party, not the first.

What she needs is native power of her own. Without it, she’s up against CRM and other B2B systems sold to the companies she deals with, all of which are designed to “target,” “acquire,” “manage,” “control” and “lock in” customers — all terms better suited to ranching and slavery than to anything that aspires to genuine relationship. Even the notion of “delivering” an “experience” is an affront to her independence.

To really come first, to really be in charge, to really lead, the customer needs powers of her own that extend across all the companies she deals with. That’s scale.

Just as companies need to scale their relationships across many customers, customers need to scale their relationships across many companies.

The customer can only get scale through tools for both independence and engagement. She already has those with her car, her purse, her phone, her personal computer, her email, her browsers, her computer, her cash. (See The Cash Model of Customer Experience.) Every company she deals with respects the independence she gets from those tools, and every company has the same base-level ways of interacting with them. Those tools are also substitutable. The customer can swap them for others like it and maintain her autonomy, independence and ability to engage.

For the last eight years many dozens of developers around ProjectVRM have been working on tools and services that give customers scale. You’ll find a partial list of them here, a report on their progress here — and soon a maturity framework will appear here.

What’s still missing, I believe, is a single app for running all the customer’s relationships: an app that applies standard ways of managing relationships with companies that make and sell her things. That app should include —

  • Ways to manage gradual, selective and trust-based disclosure of
    personal identifiers, starting from a state that is anonymous
    (literally, nameless).
  • Ways to express terms and policies with which companies can agree
    (preferably automatically).
  • Ways to change personal data records (e.g. name, address, phone
    number) for every company she deals with, in one move.
  • Ways to share personal data (e.g. puchase or service intentions)
    selectively and in a mutually trusting way, with every company she
    deals with.
  • Ways to exercise full control over data spaces (“clouds”) for every thing she owns, and within which reside her relationships with companies that support
    those things.
  • Ways to engage with existing CRM, call center and other relationship systems on the vendors’ side.

I believe we have most or all of the technologies, standards, protocols, specifications and APIs we need already. What we need now is thinking and development that goes meta: one level up, to where the customer actually lives, trying to manage all these different relationships with all these different cards, apps, websites, logins, passwords and the rest of it.

The master app would not subsume all those things, but make it easier to drive them.

The master app should also be as substitutable as a car, a wallet, a purse, a phone, an email client. In other words, we should have a choice of master apps, and not be stuck again inside the exclusive offering of a single company.

Only with scale can free customers prove more valuable than captive ones. And only with mastery will customers get scale. We can’t get there with a zillion different little apps, most of which are not ours. We need a master app of our own.

And we’ll get one. I have faith that VRM developers will come through. (And I know some that are headed this way already.)

Signs of progress

In Fightback against internet giants’ stranglehold on personal data starts here, , John Naughton of The Guardian writes,

When the history of this period comes to be written, our great-grandchildren will marvel at the fact that billions of apparently sane individuals passively accepted this grotesquely asymmetrical deal. (They may also wonder why our governments have shown so little interest in the matter.) And future historians, diligently hunting through digital archives, will discover that there were only a few voices crying in the wilderness at the time.

Of these prophets, the most prominent are Jaron Lanier, a computer scientist who was one of the pioneers of virtual reality, and Doc Searls, one of the elder statesman of the old internet who is now at the Berkman Centre at Harvard. In his book Who Owns the Future?, Lanier argued that by convincing users to give away valuable information about themselves in exchange for “free” services, firms such as Google and Facebook have accumulated colossal amounts of data (and corresponding amounts of wealth) at virtually no cost. His proposed solution is to make online transactions bidirectional, to ensure that the economic value of personal data can be realised by individuals, who at the moment just give it away.

Doc Searls has much the same argument in his book The Intention Economy: When Customers Take Charge but proposes a different kind of software solution – “vendor relationship management”. The basic idea is that “many market problems (including the widespread belief that customer lock-in is a ‘best practice’) can only be solved from the customer side: by making the customer a fully empowered actor in the market place, rather than one whose power in many cases is dependent on exclusive relationships with vendors, by coerced agreement provided entirely by those vendors”. In that sense, just as most big companies now use “customer relationship management” systems to manage their interactions with users, Searls thinks that customers need systems that can manage their interactions with companies, but on customers’ terms.

The underlying philosophy underpinning all attempts to level the online playing field is a belief that an individual’s data belongs to him or herself and that no one should have access to it except on terms that are controlled by the data owner. The hunt is on, therefore, for technologies (software and/or hardware) that would make this both possible and be easy to use.

Also in the UK, Lee Henshaw asks, Is Advertising Broken?  Specifics:

We’re currently reading The Intention Economy: When Customers Take Charge by Doc Searls, an American journalist working from Harvard University who writes about the future of business.

Advertising is broken, he says.

He argues against the trend in online advertising for reducing customers to data points and delivering us personal advertising.

“Perfectly personal advertising is a dream of advertisers, not of customers,” he writes.

Personal advertising puts us in the uncanny valley, he says. In the uncanny valley, robots start freaking us out because they appear too human.

His alternative is the intention economy. In the intention economy, we – the customers – tell the market of our intention to buy something then companies compete to sell it to us.

“The intention economy is about buyers finders sellers, not sellers finding (or ‘capturing’) buyers,” he writes.

He invites advertisers to give up what he calls their cat and mouse game and start building more meaningful relationships with customers through our personal data stores instead.

“Nothing big data offers today, in any business, is a substitute for intentionally delivered intelligence from real customers who are engaged, one to one, with retailers in a marketplace, in their own ways, on their own terms,” he writes.

Searls works from Harvard University’s Berkman Centre for Internet and Society, where he runs Project VRM – VRM stands for Vendor Relationship Management.

“VRM tools work as the demand-side counterpart of vendors’ CRM (customer relationship management) systems,” he explains.

Project VRM, he hopes, will liberate customers through tools that help us make requests for proposals to companies that are selling something we want to buy. This kind of engagement, he writes, “is the only evolutionary path out of the pure guess-work game that advertising has been for the duration”.

And he asks for answers. Feel free to volunteer some.

Also see Meaningful Consent in the Digital Economy (aka MCDE) I’ll be participating in a  workshop on MCDE  on 23- 24 February in Southampton, UK.  It’s described as “an interdisciplinary workshop on issues related to giving and obtaining user consent online, with special emphasis on privacy and data protection.”

Bonus Links: Dave Winer on How VRM works, and Consumers vs. Data Science Bad Guys, by @kinglevi) in Techcrunch.

© 2017 ProjectVRM

Theme by Anders NorenUp ↑