Search results: "QR" (page 1 of 2)

QR codes are becoming fishhooks

We’ve been very bullish on QR codes here, because they’re an excellent way for customers and vendors to shake hands, to start doing business, and to form constructive relationships.

Alas, they have become bait for tracking by marketers. In QR Codes Are Here to Stay. So Is the Tracking They Allow, Erin Woo (@erinkwoo) of the NY Times explains how:

Restaurants have adopted them en masse, retailers including CVS and Foot Locker have added them to checkout registers, and marketers have splashed them all over retail packaging, direct mail, billboards and TV advertisements.

But the spread of the codes has also let businesses integrate more tools for tracking, targeting and analytics, raising red flags for privacy experts. That’s because QR codes can store digital information such as when, where and how often a scan occurs. They can also open an app or a website that then tracks people’s personal information or requires them to input it.

As a result, QR codes have allowed some restaurants to build a database of their customers’ order histories and contact information. At retail chains, people may soon be confronted by personalized offers and incentives marketed within QR code payment systems.

“People don’t understand that when you use a QR code, it inserts the entire apparatus of online tracking between you and your meal,” said Jay Stanley, a senior policy analyst at the American Civil Liberties Union. “Suddenly your offline activity of sitting down for a meal has become part of the online advertising empire.”

So that’s one more thing to fix in our apps and browsers. But how?

Obviously, we can try to avoid QR codes; but there are a growing number of places where that’s not possible.

Providing ways to opt out is a giant non-starter, as we’ve learned at great pain on the Web. (Do you have any record at all of the separate privacy settings you’ve made at all the sites and services where those choices have been provided? Of course not.)

We need at least two things here, and fast.

One is some way, in our phones or browsers, to prevent QR code scanning on phones from turning into tracking. Are you listening, Apple and Google? Plus everybody else in the QR code business?

The other is regulation. And I hate to say that, because too many regulations protect yesterday from last Thursday, and distort markets in ways seen and unseen for decades to come. But this is a case where we really need it.

[Two days later…]

There has been much follow-up to this piece. If you’re interested in that, start with this clip rom Wednesday;s FLOSS Weekly podcast, where Jonathan Bennett (@JP_Bennett) provides some excellent answers to questions raised here and elsewhere.

On Twitter, @QRcodeART has some good follow-up under an @TWiT tweet pointing to that clip. In that thread I stand accused of “pure babbling,” to which I plead guilty (providing, as I do, an example of how, as Garrison Keillor once put it, “English is the preacher’s language because it allows you to talk until you think of what to say”).

The main point in the thread is that QR codes are essentially “innocent.” Also, “#Bluetooth is much worse! Creative names, unique IDs (!) and such and usually open and “seeable” for everybody. Similar to your #Wifi searching always for a #WLan in the perimeter. Unique funny names and identifiable MAC addresses. Think about that !”

Good advice. Clearly, there are concerns for all the tech we use, especially the networked kind. If we fail to take precautions such as those Jonathan recommends, we’re likely being tracked in ways we wouldn’t welcome if we knew about it. Returning to the metaphor, everything you carry, scan or click on can be a fishhook. And, to the hookers, you’re just a fish.

 

 

Toward real market conversations

A friend pointed me to this video of a slide presentation by Bixy, because it looked to him kinda like VRM.  I thought so too…. at first. Here’s an image from the deck:

bixy slide

Here is what I wrote back, updated and improved a bit:

These are my notes on slides within the deck/video.

1) It looks to me like a CRM refresh rather than VRM. There have been many of these. And, while Bixy looks better than any others I can remember (partly because I can’t remember any… it’s all a blur), it’s still pitching into the CRM market. Nothing wrong with that: it’s a huge market, with side categories all around it. It’s just not VRM, which is the customer hand CRM shakes. (And no, a CRM system giving the customer a hand to shake the CRM’s with isn’t VRM. It’s just gravy on a loyalty card.)

2) The notion that customers  (I dislike the word “consumers”) want relationships with brands is a sell-side fantasy. Mostly customers are looking to buy something they’ve already searched for, or to keep what they already own working, or to replace one thing with another that won’t fail—and to get decent service when something does fail. (For more on this subject, I suggest reading the great Bob Hoffman, for example here.)

3) While it’s true that customers don’t want to be tracked, annoyed and manipulated, and that those practices have led to dislike of businesses and icky legislation (bulls eye on all of those), and that “relationships are based on trust, value, attention, respect and communication,” none of those five things mean much to the customer if all of them are locked into a company’s one-to-many system, which is what we have with 100% of all CRM, CX and XX (pick your initialism) systems—all of them different, which means  a customer needs to have as many different ways to trust, value, attend to, respect and communicate as there are company systems for providing the means.

4) Bixy’s idea here (and what the graphic above suggests, is that the customer can express likes and dislikes to many Brands’ Salesforce CRM systems. They call this “sharing for value in return.” But there is far appetite for this than than marketing thinks.  Customers share as little as they can when they are fully required to do so, and would rather share zero when they go about their ordinary surfing online or shopping anywhere. Worse, marketing in general (follow the news)—and adtech/martech in particular—continue to believe that customers “share” data gathered about them by surveillance, and that this is “exchanged” for free services, discounts and other goodies. This is one of the worst rationalizations in the history of business.

5) “B2C conversations” that are “transparent, personalized and informative” is more a marketing fantasy than a customer desire. What customers would desire, if they were available, are tools that enhance them with superpowers.  For example, the power to change their last name, email address or credit card for every company they deal with, in one move. This is real scale: customer scale.  We call these superpowers customertech:

CRM is vendortech.

6) Some percentage of Adidas customers (the example in that video) may be willing to fill out a “conversational” form to arrive at a shoe purchase, but I suspect a far larger percentage would regard the whole exercise as a privacy-risking journey down a sales funnel that they’d rather not be in. So long as the world lacks standard ways for people to prevent surveillance of their private spaces and harvesting of personal data, to make non-coercive two-way agreements with others, and ways to monitor person data use and agreement compliance, there is no way trustworthy “conversations” of the kind Bixy proposes can happen.

7) Incumbent “loyalty” programs are, on the whole, expensive and absurd.

Take Peet’s Coffee, a brand I actually do love. I’ve been a customer of Peet’s for, let’s see… 35 years. I have a high-end (like in a coffee shop) espresso machine at my house, with a high-end grinder to match. All I want from Peet’s here at home are two kinds of Peet’s beans: Garuda and Major Dickason Decaf. That’s it. I’ve sampled countless single-origin beans and blends from many sources, and those are my faves. I used to buy one-pound bags of those at Peet’s stores; but in COVID time I subscribe to have those delivered. Which isn’t easy, because Peet’s has made buying coffee online remarkably hard. Rather than just showing me all the coffees they have, they want to drag me every time through a “conversational” discovery process—and that’s after the customary (for every company) popover pitch to sign up as a member, which I already am, and to detour through a login-fail password-recovery ditch (with CAPTCHAs, over and over, clicking on busses and traffic lights and crosswalks) that show up every. damn. time. On arrival at the membership home page, “My Dashboard” all but covers the home screen, and tells me I’m 8 points away from my next reward (always a free coffee, which is not worth the trouble, and not why I’m loyal). Under the Shop menu (the only one I might care about) there are no lists of coffee types. Instead there’s “Find Your Match,” which features two kinds of coffee I don’t want and a “take your quiz” game. Below that are “signature blends” that list nothing of ingredients but require one to “Find My Coffee” through a “flavor wheel” that gives one a choice of five flavors (“herbal/earthy,” “bright/citrus”…). I have to go waaay the hell down a well of unwanted and distracting choices to get to the damn actual coffee I know I like.

My point: here is a company that is truly loved (or hell, at least liked) by its customers, mostly because it’s better than Starbucks. They’re in a seller’s market. They don’t need a loyalty program, or the high operational and cognitive overhead involved (e.g. “checking in” at stores with a QR code on a phone app). They could make shopping online a lot simpler with a nice list of products and prices. But instead they decided, typically (for marketing), that they needed all this bullshit to suck customers down sales funnels. When they don’t. If Peet’s dumped its app and made their website and subscription system simpler, they wouldn’t lose one customer and they’d save piles of money.

Now, back to the Adidas example. I am sure anybody who plays sports or runs, or does anything in athletic shoes, would rather just freaking shop for shoes than be led by a robot through a conversational maze that more than likely will lead to a product the company is eager to sell instead of one the customer would rather buy.

7) I think most customers would be creeped to reveal how much they like to run and other stuff like that, when they have no idea how that data will be used—which is also still the typical “experience” online. Please: just show them the shoes, say what they’re made of, what they’re good for, and (if it matters) what celeb jocks like them or have co-branded them.

8) The “value exchange” that fully matters is money for goods. “Relationship” beyond that is largely a matter of reputation and appreciation, which is earned by the products and services themselves, and by human engagement. Not by marketing BS.

8) Bixy’s pitch about “90% of conversation” occurring “outside the app as digital widgets via publisher and marketer SDKs” and “omnichannel personalization” through “buy rewards, affiliate marketing, marketer insights, CRM & CDP, email, ads, loyalty, eCommerce personalization, brand & retailer apps and direct mail” is just more of the half-roboticized marketing world we have, only worse. (It also appears to require the kind of tracking the video says up front that customers don’t want.)

9) The thought of “licensing my personal information to brands for additional royalties and personalization” also creeps me out.

10) I don’t think this is “building relationships from the consumer point of view.” I think it’s a projection of marketing fantasy on a kind of customer that mostly doesn’t exist. I also don’t think “reducing the sales cycle” is any customer’s fantasy.

To sum up, I don’t mean to be harsh. In fact I’m glad to talk with Bixy if they’re interested in helping with what we’re trying to do here at ProjectVRM—or at Customer Commons, the Me2B Alliance and MyData.

I also don’t think Cluetrain‘s first thesis (“Markets are conversations“) can be proven by tools offered only by sellers and made mostly to work for sellers. If we want real market conversations, we need to look at solving market problems from the customers’ side. Look here and here for ways to do that.

Is Facebook working on a VRM system? Or just another way to do ads?

It’s easy to get caught up in news that WhatsApp is starting to accept advertising (after they said they would never do that), and miss the deeper point of what’s really going on: Facebook setting up a new bot-based channel through which companies and customers can communicate. Like this:

vrmcrmbot

The word balloon is Facebook Messenger. But it could be WhatsApp too. From a VRM perspective, what matters is whether or not “Messenger bots” work as VRM tools, meaning they obey the individual user’s commands (and not just those of Facebook’s corporate customers). We don’t know yet. Hence the question mark.

But before we get to exploring the possibilities here (which could be immense), we need to visit and dismiss the main distractions.

Those start with Why we don’t sell ads, posted on the WhatsApp blog on 18 June 2012. Here are the money grafs from that one:

We knew we could do what most people aim to do every day: avoid ads.
No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they’ll see tomorrow. We know people go to sleep excited about who they chatted with that day (and disappointed about who they didn’t). We want WhatsApp to be the product that keeps you awake… and that you reach for in the morning. No one jumps up from a nap and runs to see an advertisement.

Advertising isn’t just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought. At every company that sells ads, a significant portion of their engineering team spends their day tuning data mining, writing better code to collect all your personal data, upgrading the servers that hold all the data and making sure it’s all being logged and collated and sliced and packaged and shipped out… And at the end of the day the result of it all is a slightly different advertising banner in your browser or on your mobile screen.

Remember, when advertising is involved you the user are the product.

Great stuff. But that was then and this is now. In WhatsApp’s latest post, Looking Ahead for WhatsApp (25 August), we have the about-face:

But by coordinating more with Facebook, we’ll be able to do things like track basic metrics about how often people use our services and better fight spam on WhatsApp. And by connecting your phone number with Facebook’s systems, Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them. For example, you might see an ad from a company you already work with, rather than one from someone you’ve never heard of. You can learn more, including how to control the use of your data, here.

Pretty yucky, huh?

Earlier in the same post, however, WhatsApp says,

we want to explore ways for you to communicate with businesses that matter to you too

Interesting: Mark Zuckerberg said the same thing when he introduced messenger bots, back in April. In the video at that link, Zuck said,

Now that Messenger has scaled, we’re starting to develop ecosystems around it. And the first thing we’re doing is exploring how you can all communicate with businesses.

You probably interact with dozens of businesses every day. And some of them are probably really meaningful to you. But I’ve never met anyone who likes calling a business. And no one wants to have to install a new app for every service or business they want to interact with. So we think there’s gotta be a better way to do this.

We think you should be able to message a business the same way you message a friend. You should get a quick response, and it shouldn’t take your full attention, like a phone call would. And you shouldn’t have to install a new app.

Note the similarities in the set-up:

  1. Zuck:  “how you can all communicate with business.”
  2. WhatsApp: “explore ways for you to communicate with businesses.”

This is, or should be, pure VRM:  a way for a customer to issue a service request, or to intentcast for bids on a new washing machine or a car. In other words, what they seem to be talking about here is a new communication channel between customers and businesses that can relieve  the typical pains of being a customer while also opening the floodgates of demand notifying supply when it’s ready to buy. Back to Zuck:

So today we’re launching Messenger Platform. So you can build bots for Messenger.

By “you” Zuck means the developers he was addressing that day. I assume these were developers working for businesses that avoid customer contact and would rather have robots take over everything possible, because that’s the norm these days. But I could be wrong. He continues,

And it’s a simple platform, powered by artificial intelligence, so you can build natural language services to communicate directly with people. So let’s take a look.

CNN, for example, is going to be able to send you a daily digest of stories, right into messenger. And the more you use it, the more personalized it will get. And if you want to learn more about a specific topic, say a Supreme Court nomination or the zika virus, you just send a message and it will send you that information.

The antecedents of “you” move around here. Could be he’s misdirecting attention away from surveillance. Can’t tell. But it is clear that he’s looking past advertising alone as a way to make money.

Back to the WhatsApp post:

Whether it’s hearing from your bank about a potentially fraudulent transaction, or getting notified by an airline about a delayed flight, many of us get this information elsewhere, including in text messages and phone calls.

This also echoes what Zuck said in April. In both cases it’s about companies communicating with you, not about you communicating with companies. Would bots work both ways?

In “‘Bot’ is the wrong name…and why people who think it’s silly are wrong”, Aaron Batalion says all kinds of functionality now found only in apps will move to bots—Messenger’s in particular. “In a micro app world, you build one experience on the Facebook platform and reach 1B people.”

How about building a one-experience bot so 1B people can reach businesses the same way?

Imagine, for example, that you can notify every company you deal with that your last name has changed, or you’ve replaced a credit card. It would be great to do that in one move. It would also be VRM 101. But, almost ten years into our project, nobody has built that yet. Is Facebook doing it?

Frankly, I hope not, because I don’t want to see VRM trapped inside a giant silo.

That’s why I just put up Market intelligence that flows both ways, over in Medium. (It’s a much-updated version of a post I put up here several years ago.)

In that post I describe a much better approach, based on open source code, that doesn’t require locating your soul inside a large company for which, as WhatsApp put it four years ago, you’re the product.

Here’s a diagram that shows how one person (myself, in this case) can relate to a company whose moccasins he owns:

vrmcrmconduit

The moccasins have their own pico: a cloud on the Net for a thing in the physical world. For VRM and CRM purposes, this one is a relationship conduit between customer and company.

A pico of this type comes in to being when the customer assigns the QR code to the moccasins and scans it. The customer and company can then share records about the product, or notify the other party when there’s a problem, a bargain on a new pair, or whatever. It’s tabula rasa: wide open.

The current code for this is called Wrangler. It’s open source and in Github. For the curious, Phil Windley explains how picos work in Reactive Programming With Picos.

I’ll continue on this theme in the next post. Meanwhile, my main purpose with this one is to borrow interest in where Facebook is going (if I’m guessing right) with Messenger bots, and do it one better in the open and un-silo’d world, while we still have one to hack.

 

 

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State of the VRooM, 2014

As of today, ProjectVRM is eight years old.

So now seems like a good time for a comprehensive (or at least long) report on what we’ve been doing all this time, how we’ve been doing it, and what we’ve been learning along the way.

ProjectVRM has always been both a group effort and provisional in its outlook and methods. So look at everything below as a draft requiring improvement, and send me edits, either by email (dsearls at cyber dot law dot harvard dot edu) or by commenting below.

Summary

After eight years of encouraging development of tools and services that make individuals both independent and better able to engage, ProjectVRM (VRM stands for vendor relationship management) is experiencing success in many places; most coherently in France, the UK and Oceania (Australia and New Zealand). There are now dozens of VRM developers (though many descriptors besides VRM are used), and investor interest is shifting from the “push” to the “pull” side of the marketplace. Government encouragement of VRM is strongest in the UK and Australia.  ProjectVRM and its community are focused currently on “first person” technologies, privacy, trust, identity (including anonymity), relationship (including experience co-creation), substituability of services and the Internet of Things. Verticals are personal information management, relationship (VRM+CRM), identity, on-demand services, payments, messaging (e.g. secure email), health, automotive and real estate.  There are many possibilities for research, possibly starting with the effects on business of individuals being in full control of their sides of agreements with companies.

Here are shortcuts to each section:

  1. History
  2. Development
  3. Community
  4. Influence
  5. Issues
  6. Verticals
  7. Investment
  8. Research
  9. Questions

1. History

ProjectVRM is one of many research projects at the Berkman Center for Internet and Society at Harvard University. It started when I began a four-year fellowship at Berkman in September, 2006. In those days Berkman fellows were encouraged to work on a project. I had lots of guidance from Berkman staff and other veterans; but what best focused my purpose was something Terry Fisher said at one of the orientation talks. He said Berkman did its best to be neutral about the subjects it studies, but also that “we do look for effects.”

The effect-generating work for which I was best known at the time was The Cluetrain Manifesto, which I co-authored seven years earlier with Chris Locke, David Weinberger and Rick Levine. By most measures Cluetrain was a huge success. The original website launched a meme that won’t quit, and the book that followed was a bestseller.(It still sells well today). But I felt that its alpha clue, written by Chris Locke, still wasn’t true. It said,

we are not seats or eyeballs or end users or consumers.
we are human beings and our reach exceeds your grasp. deal with it.

There is a theory in there that says the Internet gives human beings (the first person we) the reach they need to exceed the grasp of marketers (the second person your).

So either the theory wasn’t true, or the Internet was a necessary but insufficient condition for the theory to prove out. I went with the latter and decided to to work on the missing stuff.

That stuff couldn’t come from marketers, because they were on the second person side. In legal terms, they were the second party, not the first. This is why their embrace  of  Cluetrain’s “markets are conversations” couldn’t do the job. Demand needed help that Supply couldn’t provide. What we needed, as individuals, were first party solutions — ones that worked for us.

The more I thought about the absence of first party solutions, the more I realized that this was a huge hole in the marketplace: one that was hard to see from the client-server perspective, always drawn like this:

468px-Client-server-model.svg

While handy and normative, client-server is also retro. Here’s a graphic from Virtual Teams: People Working Across Boundaries with Technology (Jessical Lipnack and Jeffrey Stamps, 2000,  p. 47) that puts it in perspective:

lipnack

Client-server is hierarchical, bureaucratic industrial and agricultural (see the image below). But it’s also most of what we experience on the Web, and also where the entirety of the supply side sits. So, even if Cluetrain is right when it says (in Thesis #7) “hyperlinks subvert hierarchy,” subversion goes slow when the people running the servers are in near-absolute control and hardly care at all about links. In less abstract terms, what we have on the Web is this:

calf-cow

As clients we go to servers for the milk of text, graphics, sound and videos. We get all those, plus cookies (and other tracking methods) to remember who we are and where we were the last time we showed up. And, since we’re just clients, and servers do all the heavy lifting  (and with technology what can be done will be done) the commercial Web’s ranch has turned into what Bruce Schneier calls Our Internet surveillance state.

By 2006 it was already clear to me that we could make the whole marketplace a lot bigger if individuals were fully capable human beings and not just calves — if we equipped Demand to drive Supply at least as well as Supply drives Demand.

To help people imagine what will happen when Demand reaches full power, I wrote a Linux Journal column a few months earlier, titled “The Intention Economy.” Here’s the gist of it:

The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don’t need advertising to make them.

The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that.

The Intention Economy is built around more than transactions. Conversations matter. So do relationships. So do reputation, authority and respect. Those virtues, however, are earned by sellers (as well as buyers) and not just “branded” by sellers on the minds of buyers like the symbols of ranchers burned on the hides of cattle.

The Intention Economy is about buyers finding sellers, not sellers finding (or “capturing”) buyers.

In The Intention Economy, a car rental customer should be able to say to the car rental market, “I’ll be skiing in Park City from March 20-25. I want to rent a 4-wheel drive SUV. I belong to Avis Wizard, Budget FastBreak and Hertz 1 Club. I don’t want to pay up front for gas or get any insurance. What can any of you companies do for me?” — and have the sellers compete for the buyer’s business.

This car rental use case is one I’ve used to illustrate what would be made possible by “user-centric” or “independent” identity, which was also the subject of the cover story in last October’s Linux Journal, plus this piece a year earlier, and various keynotes I’ve given at Digital Identity World, going back to 2002. It is also the use case against which the new open source Higgins project was framed.

Even though I’ve been thinking out loud about Independent Identity for years, I didn’t have a one-word adjective for the kind of market economy it would yield, or where it would thrive. Now, thanks to all the unclear talk at eTech about attention, intentional is that adjective, because intent is the noun that matters most in any economy that gives full respect to what only customers can do, which is buy.

Like so many other things that I write about (including everything I’ve written about identity), The Intention Economy is a provisional idea. It’s an observation that might have no traction at all. Or, it might be a snowball: an core idea with enough heft to roll, and with enough adhesion to grow, so others add their own thoughts and ideas to it.

So that’s the purpose I chose for my new Berkman project: to get a snowball of development rolling toward the Intention Economy.

The project has been lightweight from the start, consisting of myself* and other volunteers. Our instruments are this blog, a wiki, a mailing list and events. In gatherings of project volunteers at Berkman and elsewhere, we narrowed our focus to encouraging development of tools for independence and engagement. That is, tools that would make individuals both independent of other entities (especially companies) and better able to engage with them. These shaped the principles, goals and tools listed on our wiki.

The term VRM came about accidentally. I was talking about my still-nameless project on a Gillmor Gang podcast in October 2006. Another guest on the show, Mike Vizard, started using the term VRM, for Vendor Relationship Management — or the customer-side counterpart of CRM, for Customer Relationship Management, which was then about a $6.2 billion B2B software and services industry.  (It’s now past $20 billion.) The Gillmor Gang is a popular show, and the term stuck. It wasn’t perfect (we wanted a broader focus than “vendors,” which is also a B2B term, rather than C2B). But the market made a decision and we ran with it. Since then VRM has gained a broader meaning anyway. Every thing (hardware, software, policies, legal moves) that enables an individual to interact with full agency in any relationship is a  VRM thing. “RM” turns out to  be handy for sub-categories as well, such as GRM (government relationship management) and HRM (health relationship management).

ProjectVRM has always been unusual for Berkman in two ways. One is that it has been focused on business — the commercial side of the “society” in Berkman’s name. The other is that it put the development horse ahead of the research cart. So, while we always wanted to do research (and did some along the way, such as with ListenLog), we felt it was important to create research-worthy effects first.

My first mistake was thinking we would have those effects within a year. My second mistake was thinking we would have them within four years — the length of my fellowship. It has taken twice that long, and still requires one more piece. More about that below, in the Research and Opportunities sections.

In its early years, when it was pure pioneering, ProjectVRM had a lot of volunteer organizational help. There were weekly conference calls and meetings, and events held in Cambridge, London, San Francisco and elsewhere. But the main gatherings from the start were at the Internet Identity Workshop (IIW), an unconference I co-organize at the Computer History Museum in Mountain View. (Our next VRM Day is 27 October. Register here.)

IIW also started with Berkman help. It was first convened as a group I pulled together for a December 31, 2004 Gillmor Gang podcast on identity. Steve Gillmor called the nine participants in the show “The Identity Gang.” The conversation continued by phone and email, with growing energy. So we convened again, this time in person with a larger group, in February 2005 at Esther Dyson’s PC Forum in Scottsdale, Arizona. It was there that John Clippinger asked if we would like “a clubhouse” at Berkman. I said yes, and John had Paul Trevithick create a Berkman site for the gang. As interest collected around the site and its list, three members — Phil Windley (then CIO of Utah), Kaliya Hamlin (aka “IdentityWoman“) and I morphed the gang meetings into IIW, which met for the first time in Fall of 2005. Our 19th is coming up on 28-30 October. (Register here.)  It tends to have 180-250 participants from all over the world. While identity remains the central theme, as an unconference its topics can be whatever participants choose. VRM is always a main focus, however. And we always have a “VRM Day” at the Museum the day before IIW. The next is on 27 October. It’s free.

The Identity Gang  also grew out of other efforts by a number of individuals and groups:

I’ll leave it at those for now. Others can add to it and help me connect the dots later. What matters is that ProjectVRM has both roots and branches that intertwine with the digital identity movement. I unpack more in the Community section below. Meanwhile it is essential to note that Kim Cameron’s Seven Laws of Identity had a large guiding influence on ProjectVRM. This is partly because they were all good laws, but mostly because they came from the individual’s side:

  1. User control and consent
  2. Minimal disclosure for a constrained use
  3. Justifiable parties (“disclosure of identifying information is limited to parties having a necessary and justifiable place in a given identity relationship”)
  4. Directed identity (“facilitating discovery while preventing unnecessary release of correlation handles”)
  5. Pluralism of operators and technologies
  6. Human integration
  7. Consistent experience across contexts

As you see, all of those should apply just as well to VRM tools and services.

We have had two interns in our history, both hugely helpful. The first was Doug Kochelek, an HLS law student with a BS and a EE from Rice. He came on board at the very beginning, in September 2006. He’s the guy who worked with Berkman’s Geek Cave to create the wiki, the blog and the list. He also shook down many technical problems along the way. The second was Alan Gregory, a 2009 summer intern and a law student at the University of Florida. Alan helped with research on the chilling effects of copyright expansion on Web streaming, which was a focus of a research project we did with PRX called ListenLog — a self-tracking feature installed in PRX’s Public Media Player iPhone app. (Here’s a presentation Alan and I did at a Fellows Hour.) ListenLog was the brainchild of Keith Hopper, then of NPR, and was years ahead of its time. Work on those projects was funded by a grant from the Surdna Foundation.

To keep its weight light and its work focused on development and relevant issues, ProjectVRM does not have its own presence on Twitter or Facebook. Its social media activity is instead comprised of postings by individual participants in the project, and the memes they drive. #VRM, for example, gets tweeted plenty, and has come to serve as shorthand for individual empowerment.

In 2007 we did a good job of publicizing what VRM and ProjectVRM were about, and got a lot of buzz. It was  premature, and our first big lesson: it’s not good to publicize anything for which the code isn’t ready. In the absence of code, it’s easy for commentators (such as here) to assume that what we’re trying to do can’t be done.

So we got more heads-down after that, and avoided publicity for its own sake.

not_iball1Still, the idea of VRM is attractive, especially to folks at the leading edge of CRM. This is what caused nearly an entire issue of CRM magazine to be devoted to VRM ,in May 2010. It too was ahead of its time, but it helped. So did two books that came out the same year: John Hagel’s The Power of Pull, and David Siegel’s Pull: The Power of the Semantic Web to Transform Your Business. John also helped in June 2012 with The Rise of Vendor Relationship Management.

That essay was a review of  The Intention Economy: When Customers Take Charge, which arrived in May from Harvard Business Review Press. The book reported on VRM development progress and detailed the projected shifts in market power that I first called for in my 2006 column with the same title.

While  The Cluetrain Manifesto has been a bigger seller, The Intention Economy Intention-economy-cover has had plenty of effects. Currently, for example, it is informing the work of Mozilla’s commercial arm, headed by Darren Herman, who this year hired @SeanBohan from the VRM talent pool. (Here’s a talk I gave at Mozilla in New York last month.) On the publicity side, the book was compressed to a Wall Street Journal full-page Review section cover essay titled “The Customer as a God.”

So far ProjectVRM has one spin-off: Customer Commons, a California-based nonprofit. Its mission is “restore the balance of power, respect and trust between individuals and organizations that serve them.” CuCo is a membership organization with the immodest ambition of attracting “the 100%.” In other words, all customers. And it is modeled to some degree on Creative Commons CustomerCommonsLogo4(a successful early Berkman spin-off), by serving as the neutral place where machine- and person-readable versions of personal terms, conditions, policies and preferences of the individual can be maintained. Among those terms will be those restricting or preventing unwanted tracking, and among those policies will be those establishing the boundaries we call privacy. Customer Commons is a client of the Cyberlaw Clinic, which is helping develop both. But much more can be done. We’ll visit that in the Opportunities section below.

2. Development

The list of VRM developers is now up to many dozens. While most don’t use the term “VRM” in marketing their offerings (nor do we push it), the term is gathering steam. For example, while updating the developers list a few minutes ago, I found two new companies that use VRM in the description of their offerings: InformationAnswers (“Where CRM meets VRM.”) and PeerCraft (“The main purpose for PeerCraft is to support Vendor Relation Management.”)

Some developers on our list are now familiar brands, though none started that way, and most did not exist when ProjectVRM began. Some of the successes (e.g. Uber and Lyft) have not been directly engaged with ProjectVRM, but are listed because they are what we call “VRooMy.” Other successes (e.g. Personal.com, Reputation.com and GetSatisfaction) have been engaged, one way or another. One that got a lot of notice lately is Thumbtack, for picking up a $100 million investment from Google. That’s atop the $30 million they got earlier this year.

In fact many VRM developers are now having an easier time getting money, thanks to a trend on which ProjectVRM has had influence: a shift of market interest away from “push” (e.g. advertising) and toward “pull” (e.g. VRM). (More about investment below.)

Several years ago, a bunch of VRM developers (and I) worked on developing SWIFT’s Digital Asset Grid. (SWIFT is the main international system for moving money around, and is headquartered in Belgium.) The code is open source, as is other VRooMy work in the financial sector. (Such as the stuff being done by the Romanian company I wrote about here.) OIX also maintains a set of “trust frameworks,” one of which is at the heart of the Respect Network, which I’ll unpack below.

While there is a lot of development in the U.S., and there are VRM startups scattered around the world, the three main hotbeds of activity are the UK, France and Oceania (Australia and New Zealand). Each is a community of its own, cohering in different ways. It’s helpful to visit each, because they represent unique contexts and resources for moving forward.

The UK

In the UK, government is central, through a role one official there calls “being a giant consumer of personal data from citizens.” It gets that data either from individuals directly or from companies that provide individuals with what are called variously called personal clouds, data stores, lockers and vaults. While all these companies perform as intermediaries, they work primarily for the individual. To differentiate this new class of company from traditional third parties, ProjectVRM calls them “fourth parties”. (That term is alien to lawyers, but is catching on anyway. For example, there is a new VRM company in Australia with the name “4th Party.”)

Leading the UK government in a VRooMy direction from the inside is in the Efficiency and Reform Group of the Government Digital Service (GDS) in the Cabinet Office.  In this presentation by Chris Ferguson, Deputy Director of the GDS we see the government pulling in big companies (e.g. Google, Equifax, Lexis-Nexis, Experian, Paypal, Royal Mail, BT, Amazon, O2, Symantec) to legitimize and engage fourth parties serving individuals (e.g. Mydex, Paoga and Allfiled).

Two outside groups working with the UK government are Ctrl-Shift and OIX (Open Identity Exchange). Ctrl-Shift is a research consultancy that has been engaged with ProjectVRM from the beginning. OIX is a Washington-based international .org focused on ‘building trust in online transactions.’

France

VRM is a familiar and well-understood concept in France. There are meetups (such as this one) and many VRooMy startups, such as Privowny (led by French folk and HQ’d in Palo Alto), CozyCloud, and OneCub. A big organizational driver of VRM in France is Fing.org, a think tank that brings together large companies (e.g. Carrefour, Societe General, Orange and LaPoste) with small companies such as the ones I just mentioned. They do this around research projects. For example, ProjectVRM informed Fing’s Mesinfos research project (described here).

Oceania

If we were to produce a heat map of VRM activity, perhaps the brightest area would be Australia and New Zealand. I’ve been down that way three times since June of last year, to help developers and participate in meetings and events. As with the UK, government in Australia is very supportive of VRM development, and with empowering individuals generally. (We met with three agencies on one of the trips: one with the federal government in Canberra and two with the New South Wales government in Sydney. One of them called citizens “customers” of government services, because “they pay for them.”) Startups there include Flamingo, Meeco, Welcomer, Geddup,4th Party, Fifth Quadrant, Onexus and the New Zealand based MyWave.

Recent changes in Australian privacy policy also attract and support VRM development. Australian companies (and government agencies) collecting personal data from people on the Web (or anywhere) are now required to make that data available to those people to use as they please. (Or so I understand it.) This gives Canberra-based Welcomer, for example, a reason to exist. Welcomer makes “private data dashboards” that “show collected summaries of the personal data held by organisations and by individuals including the person themselves. The dashboard gives a summary of personal data with the ability to link through to the source data (where required).”

This summer, the first commercial community to grow out of ProjectVRM work, the Respect Network (which Privacy By Design (PbD) calls the “World’s First Global Private Cloud Network”) held a world tour to launch the community and stimulate funding for members’ common goals, standards and code development. I was on the tour (London, San Francisco, Sydney, Tel Aviv), and wrote a report on the ProjectVRM blog. (Naturally, I shot pictures. Those are here. I also spoke at each venue. One of my Sydney talks is here.)

3. Community

To understand where ProjectVRM fits in the world, and how it works, I like the Competing Values Framework by Kim S. Cameron (no relation to the one above), Robert E. Quinn, Jeff DeGraff and Anjan Thakor:

Screen Shot 2014-09-01 at 5.48.45 PM

While there are many VRM developers operating in the lower half of that graphic, what ProjectVRM does is in the upper half of that diagram.  We have a collaborative clan of flexible and creative individuals in an adhocracy, working together on long-term transformational change.

Pretty much everything that gets criticized about our efforts falls in the lower half. That’s because we have no hierarchy and don’t work to control what anybody does. And progress on the whole  has been slow. (Though there are exceptions, such as Uber, Lyft and Thumbtack.)

That graphic is just one of many helpful ones in David Ronfeldt‘s Organizational forms compared, which he’s been updating since first publishing it in May 2009. One reason it is helpful is that the hierarchical short-term stuff is obvious and easily understood, while collaborative long term stuff is much harder to grok. It’s like the difference between weather and geology. Which makes me think that graphic should be flipped vertically: slow stuff on the bottom, fast stuff at the top. That’s what the Long Now foundation does with this graphic, which I’ve always loved:

layers of time

The change we want most is down in the culture, governance and infrastructure layers, even though our focus is on commerce. This also explains why we run into trouble when we play with fashion. The last thing we want is for VRM to be cool. (This is also a lesson I learned and re-learned over two decades of watching Linux, free software and open source for Linux Journal.)

The following graphics are all from David Ronfeldt’s scholastic gatherings. Each in its own way helps explain how our community works — and how it doesn’t. First, from one of Bob Jessop‘s many papers on governance and metagovernance (this one from 2003):

jessop figure

That’s our column on the right.

Then there is this, from Federico Iannacci and Eve Mitleton–Kelly’s Beyond markets and firms: the emergence of Open Source networks (First Monday, May, 2005):

iannacci

That’s us in the middle. We’re a stable and decentralized heterarchy that coordinates by mutual adjustment.

Then there is this from Karen Stephenson‘s Neither Hierarchy nor Network: An Argument for Heterarchy (in Ross Dawson’s Trends in the Living Networks, April, 2009):

stephenson

Again that’s us on the right.

Something I like about those last two is the respect they give to heterarchy, which has been a focus for many years of Adriana Lukas, another VRM stalwart who has been with the project since before the beginning. Here’s her TED talk on the subject.

Finally, there is this graphic, from  Clay Spinuzzi‘s Toward a Typology of Activities (2013):

Spinuzzi

In Spinuzzi’s Losing by Expanding: Corralling the Runaway Object, an object is identified as “a material or problem that is cyclically transformed by collective activity.” With our tacit, inductive and flexible approach, this also characterizes the way our community works.

One can see all this at work on the ProjectVRM mailing list, an active collection of 615 subscribers. We also meet in person twice a year at IIW, starting one day in advance of the event, with “VRM Day.” This adds up to a total of at least eight days per year of in-person collaboration time.

Most of the rest of the VRM community meets locally, or through the organizing work of organizations such as Respect Network (U.S. based, but spanning the world) and Fifth Quadrant (Sydney based, and focused on Australia and New Zealand).

There are many other organizations with which ProjectVRM is well aligned. Among them are:

If things go the way I expect, Mozilla will also emerge as a center of VRM interest and development as well. (For example, I expect VRM to be a topic in October at MozFestival in the U.K.

4. Influence

Nearly all VRM influence derives from the work of its volunteers and its developers. “Markets are conversations,” Cluetrain said, and we drive a lot of those. But they rarely get driven exactly the way I, or we, would like. Conversations are like that. EIC awardSo are heterarchical networks. Everybody wants to come at issues from their own angle, and often with their own vocabulary. We see that especially with analysts and think tanks. None of them like the term VRM. (In fact lots of developers avoid it as well. I don’t blame them, but we’re stuck with it.) Ctrl-Shift, for example, calls fourth parties PIMS, for Personal Information Management Services. Kuppinger-Cole, which gave ProjectVRM an award in 2008 (that’s the trophy on the right), insists on the term “Life Management Platforms.” (I pushed it for awhile. Didn’t take.) Here in the U.S., Forrester Research calls the same category PIDM for Personal Identity and Data Management. We don’t care, because we look for effects.

As for the influence of others on ProjectVRM, there are too many to list.

5. Issues

Privacy is the biggest one right now. (A Google search brings up more than five billion results). We’ve done a lot to drive interest in the topic, and have brought thought leadership to the topic as well. (Here is one example.) On behalf of ProjectVRM, I’ve participated in many privacy-focused events, such as the Data Privacy Hackathon earlier this year, and at GovLab gatherings such as the one reported on here. I’m also in Helen Nissenbaum‘s Privacy Research Group at the NYU Law School, where I presented ProjectVRM developers’ privacy work on February 26 of this year.

Tied in with privacy online, or lack of it, is users’ need to submit to onerous terms of service and meaningless privacy policies. Those terms, also called contracts of adhesion, have been normative ever since industry won the industrial revolution, but have become especially egregious in the online world. Today there is a crying need both for better terms on the sites’ and services’ side, and for terms individuals can asset on their side. From the beginning ProjectVRM has been focused mostly on the latter.

Trust is another huge issue, also tied with privacy. ProjectVRM has both encouraged and influenced the growth of “trust frameworks” such as the Respect Trust Framework and others (there are five) at OIX, as well as Open Mustard Seed and OpenPDS under IDcubed at the MIT Media Lab.

VRM+CRM has been a focus from the start, but the timing has not been right until now. At the beginning, we expected CRM companies to welcome VRM. Press and analysts in the CRM space were encouraging from the start (CRM Magazine devoted an entire issue to it in 2010), but the big CRM companies showed little interest, until this year.

Sitting astride or beside VRM and CRM is a category variously called CX (for Customer Experience), CRX (for Customer Relationship Experience), EM (for Experience Management) CEM or CXM (for Customer Experience Management) and other two and three-letter initialisms. Another happening in the midst of all these is “co-creation” of customer experience. The purpose here is to bring customers and companies together to co-create experience in a lab-like setting where research can be done. This is what Flamingo does in Australia. In a similar way, MyWave in New Zealand (with developers in Australia) “puts the customer in charge of their data and the experience” for a “direct ‘segment of one’ relationship with businesses.”

With the Internet of Things (IoT) heating up as a topic, there is also an increased focus, on the “own cycle,” rather than the “buy cycle” of the customer experience. I explain the difference here, using this graphic from Esteban Kolsky:

oracle-twist

In our lives the own cycle is in fact the largest, because we own things — lots of them — all the time and are buying things only some of the time. In fact, most of the time we aren’t buying anything, or even close to looking. This is a festering problem with the advertising-driven commercial Web, which assumes that we are constantly in the market for whatever it is they push at us. In addition to not buying stuff all the time, we are employing more and more ways of turning advertising off (ad blockers are the top browser extensions). For advertising and ad-supported companies, including millions of ad-supported publishers on the Web, this is a mounting crisis. According to an August 2013 PageFair report, “up to 30% of web visitors are blocking ads, and that the number of adblocking users is growing at an astonishing 43% per year.” In The Intention Economy, I called online advertising a “bubble” and I stand by the claim. It’s just a matter of time.

As the stuff we own gets smart, and as more of it finds its way onto the Net service becomes far more important to companies than sales. And VRM developers are laying important groundwork in service. I wrote about this in Linux Journal last year, drawing special attention to the pioneering work led by Phil Windley, who has been a VRM stalwart since before the beginning. In fact it’s Phil’s work that makes clear that things themselves don’t need to be smart to exist on the Internet. All they need is clouds that are smart, which Phil calls picos for persistent computing objects. In this HBR post I explain how the shared clouds of products can be platforms for relationship between company and customers , with learnings flowing in both directions.

Meanwhile, VRooMy companies like trōv are helping individuals do more with what they own — taking their valuables, and making them more valuable.

6. Verticals

Relationship

This was the first for VRM, and it’s still a primary interest. We need tools on the individual’s side for managing many relationships. There still is not a good “relationship dashboard,” though there are a number of efforts in this direction. But as soon as we have code on the VRM side that matches up with code on the CRM side (including, for example, call centers, which are also interested in VRM), we’ll rock.

Payments

Even though ProjectVRM’s mission is centered around relationship and conversation, transaction is a big part of it too — just not the only part, as business often assumes. Our first efforts, starting in 2006, were around making it as easy as possible for individuals to donate money in one standard way to many different public radio stations.

We have been involved in many meetings and discussions around payments and secure data transactions, and some projects as well. We worked with SWIFT on the Digital Asset Grid, and have been in conversations with banks (e.g. Chase) and VISA Europe for a long time as well. With the rise of alternative currencies (e.g. Bitcoin), distributed accounting (e.g. Blockchain), digital wallets and other new means for transacting and accounting, there are many ways for VRM developments to play.

Email

In what is being called “post-Snowden time,” many new secure and encrypted email approaches have evolved. While some are listed on the ProjectVRM developers list, we haven’t been very involved with them — at least not yet. But we are involved with developers working on privacy-protecting tools that can either be embedded in existing email systems or offer alternative communications “tunnels.”

Personal information Management

There are two breeds of development here.

One is fourth party services and code bases for managing and sharing personal data selectively online. There are now many of these. Some support self-hosting as well. (ProjectVRM has always been supportive of free software, open source, and the “first person technology” and “indie” movements.) One organization, the Respect Network, was created to provide a framework for substitutability of services and apps.

The other is code the individual uses to manage his or her own life, and connections out to the world. This is where calendar, email, IM, to-do lists, password managers and other convenience-producing apps for the connected world come together. There is no leader here, though there are many players, including Apple, Microsoft and Google.  So far, this area has only seen centralized and siloed players, with inherent security and data mining disadvantages. But recently, commercial and open source conversations about a decentralized approach to this opportunity have been taking place.

A test case for VRM that applies to both kinds of solutions is this: being able to change my address, my last name or my phone number for many services in one move. This is exactly what the UK government is calling for from citizens’ personal information management systems (what Ctrl-Shift calls PIMS). A citizen should be able to change her address for the Royal Mail, the Passport Office and the National Health Service, all at once. Bonus links: Making things open, making things better, by Mike Bracken in the Gov.UK Government Digital Service blog, where Mike’s prior post, Reading the Digital Revolution featured this illustration by our old friend Paul Downey:

cluetrain-620x295

Apple’s HealthKit and HomeKit, which go live with the release of iOS 8on 9 September, also have some VRM developers excited, because it will make this kind of integration at the individual end easy to do in two verticals: Health and Home Automation.

Health

Early on with ProjectVRM, I avoided health as an issue, because I wanted to see real progress in my lifetime — and I felt that the situation in the U.S. was fubar. But other VRM folk did not agree, and have pushed VRM forward very aggressively in the health field. Dr. Adrian Gropper and Dr. Deborah Peel of Patient Privacy Rights have done a remarkable job of carrying the VRM flag up a very steep and slippery hill. Berkman veteran John Wilbanks is another active ProjectVRM volunteer whose work in health is broad, deep, influential and at the leading edge of the pioneering space where personal agency engages the wild and broken world of the U.S. health care system. Brian Behlendorf, the primary developer of the Apache Web server (which hosts the largest share of the world’s Web sites and services) and the CONNECT open source code base for health service collaboration, is also an active participant in ProjectVRM.

A number of VRM developers are working with, or paying close attention to, Apple’s HealthKit. In the words of one of those developers, “It’s very VRooMy.” HealthKit developments go live when Apple rolls out iOS 8 on 9 September.

Automotive

While a number of car makers are eager to spy on drivers, Volkswagen has put a stake in the ground. In March, Volkswagen CEO Martin Winkerhorn gave a keynote at the Cebit show that drew this headline: “Das Auto darf nicht zur Datenkrake warden.” My rusty Deutsch tells me he’s saying the car shouldn’t be a data octopus.

Toward that end, Phil Windley’s Kickstarter-based  Fuse will give drivers and car owners all the data churned out of their cars’ ODB-II port, which was created originally for diagnostics at car dealers and service stations. With an open API around that data, developers can create apps to alert you to schedule maintenance, monitor your teen’s driving and much more.

Real Estate

The only products that cost us more than cars are homes. Here too we have a VRM advocate in Cambridge-based Bill Wendell of Real Estate Café. He has always been way ahead of his time, but it’s clear his time is coming. (Here’s Bill leading a session on VRM in Real Estate at IIW 18 in May.)

7. Investment

There is an upswing of investment in start-ups on the “pull” — the individual’s — side of the marketplace. Many wealthy individuals, some quite new to tech investing, perceive an opportunity in “pull” side tools, so interest is building, especially in angel funding. There are currently at least three initiatives coming together to invest in VRM or intention based start-ups in Silicon Valley and Europe. This is one of the outcomes of the last IIW (in May of this year), where investment emerged as a big theme, with a number of VC’s for the first time participating in IIW sessions. I’m involved in planning a VRM specific fund, which is still in its preliminary stages. If it moves forward (which I believe it will), it should come into shape by next year.

In some cases government is also involved. In the UK, for example, the SEIS (Seed Enterprise Investment Scheme) program offers huge tax incentives to angel investors.

8. Research

There are many questions we can probe with research, but only one I want to work on in the near term: What happens when individuals come to websites with their own agreeable terms?creativecommons-licenses

Such as, “I’m cool with you tracking me on your site, but don’t follow me when I leave.” And, on the site’s side,  “We’re cool with that.” In proper legalese, of course — but expressed on both sides in code and symbols that work like Creative Commons’ licenses (there on the right).

The Cyberlaw Clinic is already involved, though its work with Customer Commons on a broader set of terms than the one I just mentioned, and Berkman’s own  Privacy Tools for Sharing Research Data could assist with and follow the process, both through the term-creation process and as the terms get implemented in code and materialize on the Web.

We would be dealing with cooperative efforts that require this already. One is Respect Network’s Respect Connect “Login with Respect” button.  As I explain here, the terms of OIX’s Respect Trust frame require the setting of, and respect for, the boundaries of individuals. This can be done, even within the calf-cow framework of client-server.

Respect Connect  is based onXDI, which the Respect Trust Framework also specifies. XDI is a protocol that employs “link respect-connect-buttoncontracts.” Drummond Reed, the father of XDI (and CEO of the Respect Network) describes link contracts as “machine-readable XDI descriptions of the permissions an individual is giving to another party for access to and usage of the owner’s personal data.” Very handy. And binding. In code.

Mozilla has also made efforts in this same direction, most recently with  Persona (there on the right). signinWe can help them out with this work, and I am sure other and other browser makers will also want to get on board — which they should, and with Berkman’s convening power probably will.

At the end of the project we will have both standard terms for posting at Customer Commons and reference implementations hosted by Berkman, or shared by Berkman over Github or some other data repository.

And we would bring to the table many dozens of developers already eager to see increased agency and term-proffering power on the individual’s side. I can easily see privacy dashboards, on both the client and the server sides of websites.

(Thinking out loud here…) We could host focused discussions and invite participants (including law folk — especially students, from anywhere) to vet terms the way the IETF vets Internet standards: with RFCs, or Requests for Comments. Some open source code for this already exists with Adblock Plus’s white list for non-surveillance-based advertisers. I would hope they’d be eager to participate as well. We (ProjectVRM, the Berkman Center or Customer Commons) could publish lists of conformant requirements for website and Web service providers, and lists (or databases) of conformant ones.

This work would also separate respectful actors on the supply side of the marketplace from ones that want to stick with the surveillance model.

While there are lots of things we could do, this is the one I know will have the most leverage in the shortest time, and would be great fun as well.

It is also highly cross-disciplinary, with many lines of cooperation and collaboration within the university and out to the rest of the world. Right at Berkman we have the  Privacy Tools for Sharing Research Data project and its many connections to other centers at Harvard. Its mission — “to help enable the collection, analysis, and sharing of personal data for research in social science and other fields while providing privacy for individual subjects” — is up many VRM development alleys, especially around health care.

9. Questions

What if we fail?

What if it turns out that free customers are not more valuable than captive ones for most businesses? That’s been the default belief of big business ever since it was born.

What if the free market on the Net turns out to be “Your choice of captor?” Client-server lends itself to that, although we can work around its inequities with moves like the one proposed in the Research section above.

What if the only VRM implementations that succeed in the marketplace are silo’d and non-substitutable ones? To some degree, that’s what we have with Uber and Lyft. While they are substitutable (as two apps on one phone), we don’t yet have a way to intentcast to multiple ride sharing providers at once, or to keep data that applies to both. Maybe we will in the long run, but so far we don’t.

Apple may be VRooMy with HealthKit and HomeKit, but both still operate within Apples silo. You won’t be able to use them on Android (far as I know, anyway).

And what if the Internet of Things turns out to be a world of silos as well? This too is the default, so far. Phil Windley mocks the Apple of Things and the Google of Things by calling both The Compuserve of Things — and making the case for substitutablility as well.

And what if customers just don’t care? This too is the default: the body at rest that tends to stay at rest. For VRM to fully happen, the whole body needs to be in motion — to move from one Newtonian state to another. It’s doing that in places, but not across the board.

Finally, what if we succeed? VRM is about making a paradigm shift happen. So was  Cluetrain before it. On the plus side, the Net itself lays the infrastructural groundwork for that shift. But the rest is up to us.

Whether we  fail or succeed (or both), there will be plenty to study. And that’s been the idea from the start too.

_________________

* Disclosures: I was paid modest sums as a fellow early on, but otherwise have received no compensation from the Berkman Center. I make my living as a speaker, writer and consultant. I have consulted a number of companies listed on the ProjectVRM development work page, and am on the boards of two start-ups: Qredo in the U.K. and Flamingo in Australia. In my work for them my main goal is to see VRM succeed, and I don’t play favorites in competition between VRM companies.

How a real customer relationship ought to work

This post is about creating a whole new customer-company relationship system, based in what Jon Udell and Phil Windley call The Internet of My Things. This system opens up a boundless frontier of market intelligence that flows both ways: from companies to customers, and from customers to companies. It obsoletes customer service as we know it today, and brings the best of truly personal (rather than “personalized”) customer service into the Internet Age. The examples I use are of products that have problems; but this post is not about those products or the companies that made them — although I would love for those companies to participate in the paradigm shift that is about to take place.


A couple years ago I bought a pair of moccasins at a shopping mall kiosk in Massachusetts. The brand was LAMO and the name was Mens Moc: Here’s one:

I like them a lot. They’re very comfortable and warm on winter mornings. In fact I still wear them, even though they are falling apart. Here is how they look now: You can see that the leather, laces and stitching are all fine. So is the wool lining. The problem is the sole. It has dried up and cracked into pieces. Every time I wear it, chunks fall off. In fact, I first thought about writing this when a piece of a heel with a LAMO logo on it looked up at me from under my desk. But I’m wearing them now, and I’ll probably keep wearing them after the soles come off completely. I would like to help LAMO learn from my experience. As of today, here are the four main choices for that:

  1. Do nothing (that’s the default)
  2. Send them an email
  3. Go on some website and talk about it. (A perfect Leighton cartoon in the March 17 New Yorker shows a couple registering at a hotel while the person behind the counter says, “If there’s anything we can do to make your stay more pleasant, just rant about it on the Internet.” So that’s a less used but common default.)
  4. Get “social” by tweeting to @LAMOfootwear or whatever they’ve got on Facebook. (I avoid Facebook and haven’t checked.) For wisdom on “social” relations between brands and (presumed) fans, see Bob Hoffman‘s recent talk.

But we can improve on that, by giving these moccasins their own little virtual cloud, where LAMO and I can share intelligence about whatever we like — starting (on my side) with reports on my own experience. Phil Windley calls these clouds picos, for persistent compute objects. They have their own operating system (CloudOS), and don’t need intelligence on board. Just scan a QR code, and you’ll get to the pico. Here’s the code on one of my LAMO moccasins:

Go ahead and scan the code with your phone. Or take the short cut and click on it. You’ll get to a page that says it’s my moccasin.

But if I scan it, I can see whatever notes I’ve taken. Or whatever LAMO has put in there, with my permission. Also whatever programming has been done on it. Such as this logic: IF this is scanned, THEN send LAMO a note that Doc has a new entry in our common journal. Likewise, LAMO can send me a note saying that there is new information in the same journal. Maybe that information is a note telling me that the company has changed sole manufacturers, and that the newest Mens Mocs will be far more durable. Or maybe they’ll send a discount on a new pair. The correct answer for what goes in the common journal (a term I just made up — we’re in tabula rasa-ville here) is: whatever.

And that’s the key to the future of customer service, customer relationship management (CRM), call centersloyalty programs, continuous improvement and other business ideals. Go to those links (all to Wikipedia), and you’ll find most of them have “issues.” The reason they have issues is simple: the customer is not involved with any of them. They are industries talking to themselves. This is an old problem and it can only be fixed on the customer’s side. Before the Internet, solving things from the customer’s side — by making the customer the point of integration for their own data, and the decider about what gets done with that data — was impossible. After the Internet, it’s very possible, if we get our heads out of business as usual and put them back in our own lives. This will be good for business as well.

For example, last summer I had meetings with two call center companies, and reviewed this scenario:

  1. A customer scans the QR code on her cable modem
  2. This triggers a message to the call center saying “this customer has scanned the QR code on her cable modem”
  3. The call center checks to see if there is an outage in the customer’s area, and — if there is — how soon it will be fixed
  4. The call center sends a message back saying there’s an outage and that it will be fixed within X hours

In both cases they said “We want that!” Because they really do want to be fully useful. And — get this — they are programmable. Unfortunately, in too many cases they are programmed to avoid customers, or to treat them as templates rather than as individual human beings who might actually be able to provide useful information. This is old-fashioned mass-marketing thinking at work, and it sucks for everybody. It’s especially bad at delivering (literal) on-the-ground market intelligence from customers to companies.

Call centers would rather be sources of real solutions rather than just customer avoidance machines for companies and anger sinks for unhappy customers. The solution I’m talking about here takes care of that. And much more.

Now let’s go back to shoes.

I’m not a hugely brand-loyal kind of guy. I use Canon cameras because I liked the 5D‘s user interface more than the competing Nikon, and Canon’s lens prices were lower. Not because Canon photos were better. (I still prefer Nikon color, low-light performance and hand grip.) I use Apple computers because they’re easy to get fixed and I can drop into a Unix command line when I need to. I drive a Volkswagen Passat because I got mine at a good price from a friend moving out of the country. And I buy Rockport shoes because, on the whole, they’re pretty good.

Used to be they were great. That was in the ’70s and early ’80s when Saul and Bruce Katz, the founders, were still in charge. That legacy is still there, under Reebok ownership; but it’s clear that the company is much more on the mass marketing operation than it was back in the early days. Still, in my experience, they’re better than the competition. That’s why I buy their shoes. Rockports are the only shoes I’ve ever loved. And I’ve had many.

Here is a photo I just took of wear-and-tear on two pairs of Rockport casual shoes I often wear:

Shots 1 and 2 are shoes I bought in June 2012, and are no longer sold, near as I can tell. (Wish they were.) Shots 3 and 4 are Off The Coast 2 Eye, which I bought in late 2013, but didn’t start wearing a lot until early this year. I bought both at the Rockport store in Burlington Mall, near Boston. I like that store too.

The first pair has developed a hole in the heel and eyelet grommets for the laces around the side of the shoe. The hole isn’t a big deal, except that it lets in water. The loose eyelets are only a bother when I cross my feet sitting down: they bite into the other ankle. The separating outer sole of the second pair is a bigger concern, because these shoes are still essentially new, and look new except for this one flaw. A design issue is the leather laces, which need to be double-knotted to keep from coming undone, and even the double-knots come undone as well. That’s a quibble, but perhaps useful for Rockport to know.

I’d like to share these experiences privately with Rockport, and for that process to be easy. Same with my experiences with LAMO moccasins.

It could be private if Rockport and LAMO footwear came with QR codes for every pair’s pico — it’s own cloud. Customers would buy the cloud along with the shoe. And then they would have their own shared journal and message space, as well as a programmable system for creating and improving the whole customer-company relationship. They could also get social about their dialogs in their own ways, rather than only in today’s Facebook and Twitter, which are the least private and personal places imaginable.

This kind of intelligence exchange can only become a standard way for companies and customers to learn from each other if the code for picos is open source. If Rockport or LAMO try to “own the customer” by locking him or her into a closed company-controlled system — the current default for customer service — the Internet of Things will be the Compuserve + AOL + Prodigy of things. Those “online services” were as close as we could get to the Internet before the Internet itself — an open source system at its base — came along. Even sending emails from one of those services to the other was nearly impossible. Customers were captive inside silos.

One big thing that made the Internet succeed was substitutability of services. Cars, banks, and countless other product categories you can name are large and vital because open and well understood standards and practices at their base have made substitutability possible. Phil Windley says we can’t have a true Internet of Things without it, and I agree.

Far as I know, the only code ready to begin scaffolding picos is Phil’s CloudOS and KRL. But for these — or anything like them — to catch on, we’re going to need a lot more developers thinking outside the silos that comprise the entirety of Internet of Things work going on now. This post is an appeal to those developers.

By the way, Phil believes that cars are the best vertical to start out with. I think he’s right. But shoes are in front of me right now, so I’m using them as an example. And the example works for everything. Literally.

Why Facebook buying WhatsApp is good for #VRM

WhatsFace is a huge deal for VRM, but not just in the ways we’re hearing about so far.

For example, Henry Blodgett is right that Facebook paying $19 billion dollars in cash and stock for WhatsAppis a bargain. Hey, WhatsApp is a real business with a half-zillion customers, growing at a phenomenal rate, and a great platform for more revenue models. Sarah Lacy nails this point too, and adds wisdom about valuations.

And Xeni is right that “dominance in the developing world” is another big reason why it’s a smart move. Josh Constine and Kim-Mai Cutler at TechCrunch agree. (Great chart there, though SMS needs to be in it too, because it would still dwarf everything else.)

And lots of other folks are also right to say that WhatsFace will be a threat to Amazon, Apple, Google, mobile carriers and other big players.

But Zach Seward in Quartz scores a #VRM bulls-eye with WhatsApp’s anti-ad philosophy is really a broad new vision for mobile. He brings me in too, with a quoted blast from the distant past:

But there’s something else, more fundamental: a disquieting suspicion that, in the long run, advertising simply might not work for the mobile web.

“No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they’ll see tomorrow,” Koum wrote in 2012. It echoed a prophesy that writer Doc Searls made about the web all the way back in 1998: “There is no demand for messages.”

Of course, Searls wasn’t talking about the kind of person-to-person messages that WhatsApp specializes in. Rather, he was pushing the idea that the internet would lead to the erosion of mass media where messages—think corporate marketing or political messaging—could be imposed on people no matter what. That happened to an extent, but most of the web’s big businesses—Facebook chief among them—can fairly be described as mass media. At any rate, they have been successful selling ads.

What if things are different—and much closer to Searls’s vision—on the mobile internet? Koum certainly thinks so: ”Cellphones are so personal and private to you that putting an advertisement there is not a good experience,” he said last year. He has described mobile messaging as a utility akin to water or gas.

Or perhaps, well, a phone company. After all, WhatsApp transmits 18 billion messages a day, but doesn’t send any itself.

I wrote that line a year before Chris Locke, Rick Levine, David Weinberger and I put up The Cluetrain Manifesto. But, even though Cluetrain is best known for the line “markets are conversations,” its most radical and prophetic clue was actually this one, by Chris:

It was for lack of “dealing with it” — business welcoming free and independent customers — that I posted The Intention Economy in Linux Journal in March 2006. It’s also why I started ProjectVRM later that same year — and why I reported on VRM work in The Intention Economy: When Customers Take Charge (Harvard Business Review Press, 2012). There are now more than 100 listings on our VRM Development Work page. The creation of WhatsFace just made that work much more valuable. Here is why I think so.

It’s a worldwide millennial thing. As Xeni pointed out, many or most of Whatsapp’s half-billion customers are in geographics and demographics where Facebook is post-peak. These people communicate primarily by text and hate paying the extractive fees required by carriers for SMS.

WhatsApp has real customers. Not just consumers. The 99¢/year Whatsapp charges is 99¢ more than users are paying now for Facebook itself. This means Facebook has, for the first time, consumers who are also customers. Having a paid relationship with customers who are not mere consumers (or, in the lingo of the drug and computer industries, “users”) is a huge thing. It closes a split that not only troubles Facebook, but Google and every other business with an advertising-only model. And think about this possibility (or from where I sit, certainty): what made Whatsapp especially valuable and distinctive from the start was not having advertising. It says advertising on mobile has net-negative value — not for advertisers, who are out of the loop, but for human beings using mobile devices. Here in the VRM development world we’ve been been waiting for the advertising bubble to deflate, and now Facebook makes $19 billion bet on it. This should yank the veil off the eyes of everybody who still thinks advertising is going to “pay for the free Web” or whatever. It never really did, and it never will. Real business will happen here, in addition to the stuff that was free before advertising came along. Lots of it will happen directly, between anybody and everybody. And remember, Zuck never liked advertising. (Seen the movie? Zuck’s antipathy toward advertising drove a major sub-plot that still hasn’t played out.) Oh, and putting Jan Koum, WhatsApp’s CEO, on Facebook’s board gives Facebook a good heart to go along with its smart heads.

The holy grail of mobile payments is within reach. WhatsApp already integrates audio, video and photography. Next up: voice service to beat Skype’s and conference calling to beat Skype’s and everybody else’s. Why not? Skype has been idle since Microsoft bought it and the rest of them suck in their own ways. Payments will be harder, and there are political and regulatory hurdles (plus huge competitors, some of which might be potential partners). But soon the electric slab your pocket might finally integrate with your wallet.

Next up: intentcasting. How long before you point your phone at a pair of shoes, or a QR or barcode for any product, and either ask the seller (by text) if they have it in the size and color you want, or advertise your desire to the world, either socially (telling friends) or privately (telling nobody but potential sellers who agree to your terms)? Play a little API and programming jazz and you’re in business. (“You” being anybody, or, of course, Facebook.)

The tech matters. Whatsapp uses a customized version of XMPP (originally called Jabber), the open protocol created by Jeremie Miller and the team now working on Telehash. I bring this up not for WhatsFace, but for the rest of us. There are plenty of free and open building materials laying around. Go build something.

Here are some places to start, where #VRM has already blazed some paths to the frontier.

Truly personal clouds. I’m talking about your own secure and fully personal virtual spaces in the connected world, not just places to store stuff. These personal clouds will have their own open source operating systems (e.g. CloudOS), programming languages (e.g. KRL), privacy canon (e.g. the Respect Trust Framework) and protocols (e.g. XDI).

Integration with the Internet of Things. I wrote about this a year ago here. Phil Windley explains here how every thing (which he calls a pico, for persistent compute object) can have its own cloud. And how those clouds can live in your cloud. And how they can interact with other things, and service, and APIs, programatically.

Customer service run by customers. Right now CRM — customer relationship management — is broken in this one simple and single way: You can’t relate in one way to every company, but must go inside each one’s closed silo to do anything, in different ways in which the company calls all the shots and you call exactly none. Wouldn’t it be much cooler to be able to change your address or phone number one time for every company you deal with, and not separately? And wouldn’t it be much better if you and the companies you deal with had shared spaces where you both kept usage records, product updates, contact information and everything else? This is do-able. I wrote about it here in an HBR post.

Better economic signaling. Intentcasting is one example. Another is people running their own customer service platforms, for everything they care about, in their own clouds. (As in the last two items above.) In both cases customers will be able to signal intentions (about shopping, buying, requiring service, whatever) far more efficiently and consistently. And the failings of advertising, which Don Marti has done a great job unpacking.

Market based marketing. Once free customers prove more valuable than captive ones, marketing will find that actually talking to people will have a lot more leverage than trying to herd them like cattle, or force them to operate inside feudal empires.

The pendulum is swinging away from centralization, back toward the distributed nature of the Net as it was designed in the first place. Here is how Paul Baran described the Net’s future architecture in 1962:

Ever since the Net went viral in 1995, companies and governments have been trying to stuff the distributed genie back inside the centralized (or by compromise, decentralized) bottles. Now, in post-Snowden time, we’re learning the errors of those ways, and are  ready for truly distributed solutions. It should help that some of us around ProjectVRM are already downstream in that direction.

When the customer gets the pricing gun

Customers don’t normally operate pricing guns. That’s why we have this old Steven Wright joke:

The lady across the hall tried to rob a department store — with a pricing gun.
She said, “Give me all of the money in the vault, or I’m marking down everything in the store.”

It wouldn’t be funny if it wasn’t a scary prospect for retailers.

But what if customers actually do get that power, on their own — meaning they don’t get that power from any seller, but from themselves. Like they get their car on their own. Or their . Or their browser. Or their email.

For example, what if each of us had a way to publish an offer price to many retailers at once? For example, “I’ll pay $2500 for a Canon 5D Mk III camera.” (In fact I’ve already said that, through a VRM company called .) And what if I had a way to escrow that money — and that intention-to-buy — at a bank, ready to pay when a seller meets my price and my terms? That’s the idea (though not the only one) behind . It should be a good business for banks — or for anybody wanting to help activity in markets move faster and more efficiently.

There has already been work in that direction, through the companies listed under Intentcasting here, plus the work some of us did with , a division of . That work began with discussions at around digital identity, personal data and the EmanciPay idea. Once underway, it evolved into the Digital Asset Grid: a way to move data on the SWIFT network that also moves money, with the same high degree of security. Having a secure way to move both personal data and money seemed like good idea, so we created it, and it’s there for the taking.

Meanwile, let’s say that EmanciPay, or something like it, takes off, and the pricing gun really is in the hands of the customer. Will this be the end of the world for mass marketing? Or for anything? Or will it open a huge new greenfield of opportunity, based on much better signaling of pricing — and other variables — by customers?

Like, what if we could signal real loyalty, rather than just the coerced kind we get with loyalty cards? What about convenience? Reliability? Experience with the product, the vendor, and the quality of service?

How would it work if every product we buy, or service we engage, would also serve as the platform for a genuine relationship with maker and/or the seller? This can happen if the product or service comes with its own cloud. Think about that. Your car, your cable modem, your TV, your stove, your dishwasher, your anything can have a cloud of its own, today. picos, for persistent compute objects. When you buy a product with a pico, that cloud might come with all the service materials required, be updated automatically, and contain all the service records as well. And you can add whatever you want to it, or use it as a communications conduit between you and the product’s maker or seller.

This is what makes . It’s not just a second dashboard for your car in a mobile app. It’s your platform for relationships with the car maker, your mechanic, or others in your family who also use the car. Think of it as a service gun. Or the platform for one.

There’s no limit to what you can imagine if you’re an independent party with full agency, rather than a serf in some company’s castle. Or to what can happen between people and companies that value each other’s independence.

 

Link-o-rama

VRM

  • There is an interesting correlation happening right now between online advertisers and adblocking technology: they’re both growing. By Till Faida, co-founder of Adblock Plus, in RealBusiness. Pull-quotage…”Our ultimate consideration, however, should lie in keeping these decisions in the users’ hands. So, adblockers should not rid the Internet of all advertising, they should give users the choice to rid their version of the Internet of annoying advertising. Giving the public control is the crux on which the entire issue pivots.”On this front we are not alone. We’ve found common ground with user-rights groups like the Electronic Frontier Foundation and researchers like Doc Searls and his Harvard-based VRM-Project. In addition, groups like Mozilla and news outlets like CNET have recommended this approach.”We believe in an Acceptable Ads initiative to provide a middle ground for a sustainable advertising landscape. Websites that wish to do so apply to be whitelisted and if their ads conform to the established guidelines, users see the ads they serve under default settings.”
  • Till also wrote this piece, in French for Rue89. I believe it’s the same one, but not sure.
  • Mobile Is Huge — But Two Key Elements Could Slow Its Growth. By Terry Heaton in StreetFight. Sez Terry…”We’re weary of running a relentless gauntlet of jumping, screaming, frantic warnings, hands grabbing, voices shouting, noise-making, disjointed movements, and the almost demonic reaching for our wallets coming from advertising. This is Madison Avenue’s idea of perfection, and the only way you can get there is to completely ignore the effect of advertising on the very people you’re trying to influence. The Web is, at core, a pull mechanism, not one that pushes. It’s why all those big projections of advertising “potential” have turned into a commodified “pennies for dollars” reality.”Doc Searls is onto something with his “Vendor Relationship Management (Project VRM)” concept at Harvard, for it fits the postmodern cultural shift like a glove. VRM is all about empowered consumers who send advertising messages back to the market, where they are bid on by service and goods providers, and you can bet that it will be primarily a local experience (although let’s not underestimate companies like Amazon). In the VRM model, there are ‘fourth parties’ who work on behalf of consumers to send the messages to third parties representing the manufacturers, retailers, or whatever.”
  • Fundamental Features of Persistent Compute Objects by Phil Windley.
  • My Dryer: A SquareTag Case Study By Phil Windley.
  • CRM Meets VRM: How a Personal Cloud Network Will Enable Real Vendor Relationship Management. A Respect Network event. Watch that space for a recording of the webinar.
  • Bill Wendel, Real Estate VRooMer, on the above. In answer to “How can homeowners who are watching the housing market to decide when to sell,” “How would they issue that IntentCast?” and “Right now, there is a shortage of inventory, so seems the opportunity for intentcasting (in real estate) is at hand,” Bill writes,  Eager to pursue answers to that question at IIW, and glad to Hangout on Google before that event with others interested in real estate use cases, or what we call reVRM.  For 22 idea starters, see reVRM-Minifesto on slides 13-15: http://bit.ly/reVRMgameChanger
  • #datatuesday, a #VRM event in Paris.
  • Personal Clouds Are Rolling In, by Elizabeth Glagowski of Peppers & Rogers Group. A flattering short piece. (Small correction: I am no longer a fellow at the Berkman Center — which I was from 2006-2010 — but remain involved while continuing to run ProjectVRM.)

Intention Economy

  • The Art and Science of Creating a Psychic Brand, by BusinessWire, for Peppers & Rogers. It begins, “Many companies today are still trying to scale relationships with their customers – by minimizing actual human contact, scripting human interactions and treating customers according to antiquated stereotypes and profiles. In reality, brands should be ‘treating customers like the gods by whose grace every company exists.’ Those words, chosen by Doc Searls, author of The Intention Economy: When Customers Take Charge, may seem a bit excessive, but they are as true as they are shocking to hear. Customers are the gods of any brand, they can give it life or banish it into obscurity – in order to thrive, it is important for a brand to be psychic, so it can anticipate the will of the gods and avoid their wrath.”
  • Everything you think about big data is wrong! By Tracey Parsons in Social Media Explorer. Pull-quotage: “We must change the way we think about customers“When we remember that our customers are people and not “consumers” or “targets” we can better treat them like people. Brands desperately want relationships with their customers. Customers just want their toothpaste. They don’t want big data, but they might want a coupon for toothpaste. They are not thinking about us in the same way we are thinking about them. In fact, customers are getting wise to our trickery and it is having quite the opposite effect. Instead of thinking about our products, they are thinking about ways to block our product messages. They are looking for ways to hide from us. They are feeling stalked.”Trust me when I say that I understand that tracking and building shopper profiles allow us to measure our work. Measuring our work is one of the most critical challenges marketing leaders face today. Showing a return on investment keeps many awake at night. But if the data is bad and turning off our customers, it is time we look for new ways to reach customers. We need to be thinking about small data, personal data, one person’s data, not big data. We should be thinking about intentions and how we can allow our customers to share their intention with us in a way that is not creepy. People are not ones and zeroes. They are more than that, and we need to start treating them that way.”Project VRM inspired this post. If you have some time this fall, do read The Intention Economy.”
  • If ad-blockers threaten revenue, then what’s the solution? By Colin Strong in Newsline. Pull-quotage: “Just as robotics expert Masahiro Mori first suggested in the early 1970s, perhaps there is an ‘Uncanney Valley’ where automated systems get too human like and leave us feeling ‘creeped out’. If we accept this premise then there comes a point at which targeted advertising ceases to improve in effectiveness and consumers get turned off. And this is perhaps an indication that a new era of Vendor Relationship Management (VRM) may start to replace the current authority of Customer Relationship Management (CRM). This is a world in which consumers are actively managing their relationship with brands rather than being the passive recipient of advertising. The term for this shift, created by academic and commentator Doc Searls, is the Intention Economy. In the Intention Economy consumers take responsibility for holding their own data about themselves in personal clouds, collecting it from a variety of government agencies and brands – which forms a fundamentally new value exchange between brands and consumers. So consumers are placed firmly at the centre of their own personal data, being able to collect and integrate it from a multitude of different sources. Consumers may choose to provide brands with selected parts of this data when they wish to engage with them on a purchase decision.”
  • The Cost of Identity in the Personal Data Economy. By John C. Havens in Huffington Post. Writes John,’We have to rethink our institutional structures.’ John Henry Clippinger is a research scientist at the MIT Media Lab Human Dynamics Group and the cofounder and Executive Director of ID3, (the Institute for Institutional Innovation & Data Driven Design). He and his ID3 cofounder, Alex “Sandy” Pentland have created The Open Mustard Seed Project (OMS) to combat the existing model of data exchange for the Internet economy. ‘There’s a logic among companies that collect data which is, If I can get away with something, I can do it,’ notes Clippinger. ‘But they don’t understand the ecosystem they’re creating.'”OMS is building a data banking methodology through a technical architecture they call the, ‘Trustworthy Compute Framework’ (TCF). This allows users to create their own personal data cloud that reverses the current transactional nature of the ‘freemium’ Internet economy. Instead of individuals sacrificing their data in exchange for services, they create general preferences around which companies they’d like to engage with and how. Here’s how the Open Mustard Seed wiki describes the need for this new paradigm:

    Users have not had an easy or reliable means to express their preferences for how their personal data may be accessed and used, especially when one context (a bank) differs so much from another (a health care provider) and still others (family and friends). A user may not know with whom they are really transacting, nor can they readily verify that their privacy preferences are actually respected and enforced.

    “OMS lets users curate their digital personas and manage the data they collect, produce and distribute. They can also pre-determine privacy and other settings for social networks or transactions with brands. This is a critical idea regarding personal data banks — they don’t hinder transactions with companies looking to communicate with consumers. Relationships are actually enhanced via increased trust since people know what organizations will do with their data, and will be more likely to volunteer specifics about their lives in this new transparent framework. (This is an idea known as Vendor Relationship Management, or VRM, eloquently elaborated in the book, The Intention Economy: When Customers Take Charge, by Doc Searls.)

    “Clippinger is evangelistic about the timing for a solution like OMS, noting what will happen if we don’t change the tide of how our data is managed in the current Internet economy — ‘If you don’t have an open platform, you don’t have an open society.’

    BTW, John was for a long time a Senior Fellow at the Berkman Center, and brought me in as a fellow there, back in 2006.

Trends

Advertising and Marketing

For real customer engagement, “social” is inadequate

In Social’s Value Measured in Engagement Over Sales, eMarketer provided this revealing graphic:

There are trends here too:

…consumer engagement and brand lift were the No. 1 goals of social media marketing, each cited by 67% of respondents. This was up significantly from 2011, when those goals were cited by about 50% each.

Last year, using social media marketing to garner positive sentiment was the leading goal, whereas this year it dropped to No. 4.

They add,

Marketers may be finding that it is less important that their posts get a warm reception from social users and more important that they keep consumers posting, “liking” and sharing social content.

That’s what marketers may think; but what about the parts of the company that make, sell and service the company’s goods? Let’s return again to an Oracle graphic of the “customer journey” that has been helping us focus lately:

Oracle Twist

Here’s what this illustrates about engagement:

  1. We’re not always buying stuff. We’re using it. When we have good ideas to feed back to companies, or when we want help with a company’s products or services, we shouldn’t have to go through “social” marketing. There, are, and should, be better means for that.
  2. Substantive engagement is not “posting, ‘liking’ and sharing social content”. It’s making direct connections with the parts of companies that want to help and learn from customers directly.
  3. Owning is what we do with the stuff we buy. Think about it. You’re owning 100% of the time, and buying far less, even if you’re a shopaholic. Yet the respect this fact gets from social marketing — and from marketing in general — is sub-minimal, even in our networked age.

Meanwhile spending on marketing budgets is going up, while other budgets are going down. Most of the increase is going to digital strategies, Gartner says (more here), and approximately none of that, outside “social”, is for direct engagement with the human beings who buy goods and services.

There is a reason for this, which I visit in The Intention Economy:

Back in the early ‘90s, when I was making a good living as a marketing consultant, I asked my wife—a successful businesswoman and a retailing veteran—why it was that heads of corporate Sales & Marketing departments were always from Sales people and not from Marketing people. Her answer: “Simple: Sales is real. Marketing is bullshit.”

When I asked her to explain that, she said this wasn’t marketing’s fault. The problem was the role marketing was forced to play. “See, sales touches the customer; but marketing can’t, because that’s sales’ job. So marketing has to be ‘strategic.’” She put air-quotes around “strategic.” She acknowledged that this was an over-simplification, and not fair to all the good people in marketing (such as myself) who really were trying to do right by customers. But her remark spoke to the need to distinguish between what’s real and what’s not, and to dig deeper into why the latter has become such an enormous part of the way we do business.

And now we have CMOs, Chief Marketing Officers, a title that barely existed two decades ago, graced with bigger budgets and increased political power within companies. And yet they still don’t touch the customer. Instead they want to follow the customer around with tracking beacons and to better personalize the “shopping experience” or whatever, and troll for “likes” on Facebook. In less delicate terms, the bullshit is out of control, with bigger budgets and fancier rationalizations than ever.

Want to see how far this goes? Check out the IBM/Aberdeeen “Big Datastillery”:

Look closely at this thing to see where you fit in. You’ll need to scroll down to the conveyor belt at the bottom. See those colored beakers, being filled with “customer interaction optimization” and “marketing optimization,” and then rolling off to oblivion after farting out “campaign metrics”? That’s you.

Your campaign metrics gas gets fed into the big hopper at the top from one pipe among many others. In rough order of decreasing size those are:

  • CRM
  • Social media
  • Clickstream data
  • Transactional data
  • Marketing history
  • SEO data
  • PPC (pay per click)
  • Email metrics
  • Campaign metrics
  • Ad impressions
  • Customer sentiment

None of this involves actual interactions with human beings except perhaps through social media. And even there, one CRM executive recently told me, marketing zealotry is “poisoning the well.”

We can’t fix this and shouldn’t try. It’s marketing’s house. Let them work on it. (Credit where due: according to the top graphic above, 56% of them want to use social media to “improve customer support/service”.)

What we can do is expand the owning experience to include helpful and productive interactions with companies that make, sell and service what we own, and what we use. Here’s one example.

Meanwhile, I’d love to hear stories from non-marketing people inside companies about what it’s like to try engaging, in durable and substantive ways, with customers who are at the same time getting treated like the beakers in the graphic above.

Bonus link from @bobosphere.

Which CRM companies are ready to dance with VRM?

Early on at ProjectVRM, we had a community meeting in at Oracle headquarters in Silicon Valley, where some VRM-friendly Oracle employees had kindly found us some space. During the meeting we got a surprise visit from Anthony Lye, then the Senior VP of Oracle CRM and later VP of Cloud Applications there. (He has since moved on.) We had a good conversation, after which one of the employees who hosted us disclosed that Anthony had earlier said “Whoever wins at VRM wins at CRM.” It was encouraging to hear, but I never got the quote confirmed, so I don’t know if he said it or not. But I still believe it’s true, because CRM needs VRM for the same reason that companies need customers: the market is a dance floor and it takes two to tango.

As CRM companies go, I count Oracle as clueful, mostly because they provided extraordinarily helpful grist for the VRM mill in the form of this graphic here…

Oracle Twist

… which puts at the heart of CRM two verbs — BUY and OWN — that are the customer’s and not the company’s.* It also helps us sort VRM tools and services into two main concerns:

  • BUY — Intentcasting
  • OWN — Personal clouds, plus personal data stores, vaults, lockers and services, including privacy protection

Other VRM development categories (e.g. code bases, trust frameworks, infrastructures, consortia) lie underneath those two, or blur across them.

Still, friendly as Oracle seems, I don’t hear them asking to dance with anybody doing VRM yet.

So I’m looking now at this Louis Columbus piece in Forbes, reporting on this Gartner report (sorry, ya gotta pay), saying, among other things, that the CRM market (all B2B) reached at $18 billion/year in 2012, with a 12.5% growth rate over 2011. The top six companies, in order, are:

  1. Salesforce, 14%
  2. SAP, 12.5%
  3. Oracle, 11.1%
  4. Microsoft, 6.3%
  5. IBM, 3.6%
  6. Adobe, 3.1%
  7. Nice Systems, 2.5%
  8. Verint Systems, 2.4%
  9. Amdocs, 2.3%
  10. SAS, 2.2%

“Others” are 39.7%.

Additional details:

Worldwide CRM software spending by subsegment shows Customer Service and Support leading all categories with 36.8% of all spending in 2012 ($6.6B), followed by CRM Sales (26.3%, $4.7B), Marketing (includes marketing automation) (20%, $3.6B) and e-commerce (16.9%, $3B)…

Ten fastest growing CRM vendors as measured in revenue Annual Growth Rate (AGR) in 2012 include Zoho (81.2%), Hybris (78.6%), Teradata (70.4%), Bazaarvoice (56.2%), Marketo (54.3%), Kana (44.2%), Demandware (43.9%), IBM (39.4%), Technology One (37.1%) and Neolane (36%).

Communications, media and IT services were the biggest spenders on CRM in 2012 due to their call center requirements.  Manufacturing including Consumer Packaged Goods (CPG) was second, and banking & securities were third.

Looking at these, I see a few that might like to dance with VRM. Teradata is big on data warehousing (potentially for personal clouds). Bazaarvoice is into “genuine online conversations.” Zoho does collaboration apps. Neolane does “conversational marketing.” TechnologyOne considers customers “stakeholders.”

If anybody from any of those companies (or the bigger CRM companies on the list above) wants to come out here on the floor (or sit at the table), let us know. We’re patient, and we know you’re coming.

* The original source of the graphic, Ray Wang points out in the comments below, is Esteban Kolsky. And, as I say in my comment below Ray’s, I did hear that from my friend Nitin Badjatia at Oracle (and formerly of Right Now), but didn’t remember it when I wrote this piece and the one before it yesterday. Again, it is the verbs — BUY and OWN — that make the image especially useful for VRM, because they are the customer’s. I don’t yet know if those verbs are Esteban’s or Right Now/Oracle’s. Let me know and I’ll give credit where due.

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