Category: Demand chain (page 5 of 6)

Can we each be our own Amazon?

July 9, 2012 / / Comments Off on Can we each be our own Amazon?

The most far-out chapter in  is one set in a future when free customers are known to be more valuable than captive ones. It’s called “The Promised Market,” and describes the imagined activities of a family traveling to a wedding in San Diego. Among the graces their lives enjoy are these (in the order the chapter presents them):

  1. Customer freedom and intentions are not restrained by one-sided “agreements” provided only by sellers and service providers.
  2. — service organizations working as agents for the customer — are a major breed among user driven services.
  3. The competencies of nearly all companies are exposed through interactive that customers and others can engage in real time. These will be fundamental to what calls .
  4. s (now also called intentcasts), will be common and widespread means for demand finding and driving supply in the marketplace.
  5. Augmented reality views of the marketplace will be normative, as will mobile payments through virtual wallets on mobile devices.
  6. Loyalty will be defined by customers as well as sellers, in ways that do far more for both than today’s one-sided and coercive loyalty programs.
  7. Relationships between customers and vendors will be genuine, two-way, and defined cooperatively by both sides, which will each possess the technical means to carry appropriate relationship burdens. In other words, VRM and CRM will work together, at many touch-points.
  8. Customers will be able to proffer prices on their own, independently of intermediaries (though those, as fourth parties, can be involved). Something like EmanciPay will facilitate the process.
  9. Supply chains will become “empathic” as well as mechanical. That is, supply chains will be sensitive to the demand chain: signals of demand, in the context of genuine relationships, from customers and fourth parties.
  10. The advertising bubble of today has burst, because the economic benefits of knowing actual customer intention — and relating to customers as independent and powerful economic actors, worthy of genuine relationships rather than coercive — bob will have became obvious and operative. Advertising will continue to do what it does best, but not more.
  11. Search has evolved to become far more user-driven and interactive, involving agents other than search engines.
  12. ‘s will be taken for granted. There will still be businesses that provide connections, but nobody will be trapped into any one provider’s “plan” that excludes connection through other providers. This will open vast new opportunities for economic activity in the marketplace.

In , Sheila Bounford provides the first in-depth volley on that chapter, focusing on #4: personal RFPs. I’ll try to condense her case:

I’ve written recently of a certain frustration with the seemingly endless futurology discussions going on in the publishing world, and it’s probably for this reason that I had to fight my way through the hypothesis in this chapter. However on subsequent reflection I’ve found that thinking about the way in which Amazon currently behaves as a customer through its Advantage programme sheds light on Searls’ suggestions and projections…

What Searls describes as the future for individual consumers is in fact very close to the empowered relationship that Amazon currently enjoys with its many suppliers via Amazon Advantage…  Amazon is the customer – and a highly empowered one at that.

Any supplier trading with Amazon via Advantage (and that includes most UK publishing houses and a significant portion of American publishers) has to meet all of the criteria specified by Amazon in order to be accepted into Advantage and must communicate online through formats and channels entirely prescribed and controlled by Amazon…

Alone, an individual customer is never going to be able to exert the same kind of leverage over vendors in the market place as a giant like Amazon. However individual customers online are greater than the sum of their parts: making up a crucial market for retailers and service providers. Online, customers have a much louder voice, and a much greater ability to collect, organise and mobilise than offline. Searls posits that as online customers become more attuned to their lack of privacy and control – in particular of data that they consider personal – in current normative contracts of adhesion, they will require and elect to participate in VRM programmes that empower them as individual customers and not leave them as faceless, impotent consumers.

So? So Amazon provides us with a neat example of what it might look like if we, as individuals, could control our suppliers and set our terms of engagement. That’s going to be a very different online world to the one we trade in now.  Although I confess to frustration with the hot air generated by publishing futurology, it seems to me that the potential for the emergence VRM and online customer empowerment is one aspect of the future we’d all do well to work towards and plan for.

From the start of ProjectVRM, Iain Henderson (now of The Customer’s Voice) has been pointing to B2B as the future model for B2C. Not only are B2B relationships rich, complex and rewarding in ways that B2C are not today (with their simplifications through customer captivity and disempowerment), he says, but they also provide helpful modeling for B2C as customers obtain more freedom and empowerment, outside the systems built to capture and milk them.

Amazon Advantage indeed does provide an helpful example of where we should be headed as VRM-enabled customers. Since writing the book (which, except for a few late tweaks, was finished last December) I have become more aware than ever of Amazon’s near-monopoly power in the book marketplace, and possibly in other categories as well. I have heard many retailers complain about “scan and scram” customers who treat brick-and-mortar stores as showrooms for Amazon. But perhaps the modeling isn’t bad in the sense that we ought to have monopoly power over our selves. Today the norm in B2C is to disregard that need by customers. In the future I expect that need to be respected, simply because it produces more for everybody in the marketplace.

It is highly astute of Sheila to look toward Amazon as a model for individual customers. I love it when others think of stuff I haven’t, and add to shared understanding — especially of a subject as protean as this one. So I look forward to the follow-up posts this week on her blog.

Scaling business in parallel

June 28, 2012 / / 3 Comments

Companies and customers need to be able to deal with each other in two ways: as individuals and as groups.

As of today companies can deal with customers both ways. They can get personal with customers, and they can deal with customers en masse. Without the latter capability, mass marketing would not be possible.

Customers, on the other hand, can only deal with companies as individuals, one at a time. Dealing with companies as groups is still a challenge. Consider the way you engage companies in the marketplace, both online and off. Your dealings with companies, on the whole, are separate and sequential. Nothing wrong with that, but it lacks scale. Hence: opportunity.

We can arrive at that opportunity space by looking at company and personal dealings, each with two kinds of engagement circuits: serial and parallel.

Start with a small company, say a store with customers who line up at the counter. That store  deals with customers in a serial way:

business, serial

The customers come to the counter, one after another, in a series. Energy in the form of goods goes out, and money comes back.

As companies scale up in size, however, they’d rather deal with many customers in parallel rather than in series. A parallel circuit looks like this:

business, parallel

Here customers are dealt with as a group: many at once, and in the same way. This, in an extremely simplified form, is a diagram of mass marketing. While it is still possible for a company to deal with customers individually, the idea is to deal with as many customers as possible at once and in the same ways.

I use electronic symbols in those circuits because resistance (the zig-zag symbol) adds up in series, while it goes down in parallel. This too is a virtue of mass marketing. Thus one-to-many works very well, and has proven so ever since Industry won the Industrial Revolution.

Over on the customers’ side, the marketplace on the whole looks like this:

customer, serial

The customer goes from one company to the next. This is not a problem on the vendors’ side, except to the degree that vendors would rather customers not shop elsewhere. This is why vendors come up with loyalty programs and other schemes to increase “switching costs” and to otherwise extract as much money and commitment as possible out of the customer.

But, from the customer’s side, it would also be cool if they could enjoy scale in parallel across many companies, like this:

In the physical world this is all but unthinkable. But the Internet makes it very thinkable, because the Net reduces nearly to zero the functional distance between any two entities, and presents an open space across which many connections can be made, at once if necessary, with few limits on the number or scope of possibilities. There is also no limit to the new forms of interaction that can happen here.

For example, a customer could scale in parallel by expressing demand to multiple vendors at the same time, or could change her contact information at once with many companies. In fact this is basically what VRM projects are about: scaling in parallel across many other entites. (Not just vendors, but also elected officials, government agencies, churches, clubs, and so on.)

It is easy to see how companies can feel threatened by this. For a century and a half we in business have made a virtue of “targeting,” “acquiring,” “capturing,” “managing,” “locking in” and “owning” customers. But think about the free market for a minute. Shouldn’t free customers be more valuable than captive ones? Wouldn’t it be better if customers and prospects could send many more, and better, signals to the marketplace, and to vendors as well, if they were capable of having their own native ways of dealing, consistently, across multiple vendors?

We have that now with email and other forms of messaging. But why stop there?

Naturally, it’s easy to ask, Could social media such as Facebook, Google+ and Twitter provide some of what we need here? Maybe, but the problem is that they are not ours, and they don’t work for us — in the sense that they are accountable to us. They work for advertisers. Email, IM and browsing aren’t owned by anybody. They are also substitutable. For example, you can move your mail from Gmail to your own server or elsewhere if you like. Google doesn’t own email’s protocols. No browser company owns HTTP, HTML or any of the Web’s protocols.

The other problem with social solutions is that they’re not personal. And that’s the scale we’re talking about here: adding parallel capabilities to individuals. Sure, aggregation is possible, and a good thing. (And a number of VRM projects are of the aggregating-demand sort.) But the fallow ground is under our own feet. That’s where the biggest market opportunity is located. Also where, still, it is most ignored. Except, of course, here.

[Continued in VRM/CX + CRM/CX.]

Let’s fix the car rental business

April 15, 2012 / / 8 Comments

Lately  (@ronlieber), the Your Money editor and columnist for the New York Times, has been posting pieces that expose a dysfunction in the car rental marketplace — one that is punishing innovators that take the sides of customers. The story is still unfolding, which gives us the opportunity to visit and think through some VRM approaches to the problem.

Ron’s first piece is a column titled “A Rate Sleuth Making Rental Car Companies Squirm,” on February 17, and his second is a follow-up column, “Swatting Down Start-Ups That Help Consumers,” on April 6. Both stories are about , a start-up that constantly researches and re-books car rentals for you, until you get the lowest possible price from one of them. That company wins the business, at a maximized discount. The others all lose. This is good for the customer, if all the customer cares about is price. It’s bad for the agencies, since the winner is the one that makes the least amount of money on the rental.

In the second piece, Ron explains,

The customer paid nothing for the service, and AutoSlash got a commission from Travelocity, whose booking engine it rented. This was so delightful that it felt as if it might not last, and I raised the possibility that participating companies like Hertz and Dollar Thrifty would bail out, as Enterprise and the company that owns Avis and Budget already had. I encouraged readers to patronize the participants in the meantime to reward them for playing along. Well, they’ve stopped playing. In the last couple of weeks, Hertz and the company that owns both Dollar and Thrifty have turned their backs on AutoSlash — and for good reason, according to Hertz: AutoSlash seems to have been using discount codes that its customers were not technically eligible for.

On its site, AutoSlash put things this way (at that last link):

We’re disappointed that these companies have now chosen to reverse course and adopt this anti-consumer position, after having participated in this site since its launch in mid-2010. Apparently, with more customers booking reservations through our service, they felt they could no longer support our consumer-friendly model of automatically finding the best discount codes and re-booking when rates drop. AutoSlash will not waver in our objective to help people get a great deal on their rentals. We have exciting product plans on the horizon to make our site even more useful to you..

On the same day as his second column, Ron ran a blog post titled “AutoSlash, AwardWallet, MileWise and the Travel Bullies,” in which he points to airlines as another business with the same problems — and the same negative responses to rate-sleuths:

American Airlines and Southwest Airlines have made it clear that they do not want any third party Web site taking customers’ AAdvantage or Rapid Rewards frequent flier balances and putting them on a different site where people can view them alongside those from other loyalty programs. This comes at a loss of convenience to customers, and the airlines make all sorts of specious arguments about why this is necessary. Meanwhile, sites like ,  and  are less useful than they would be otherwise without a full lineup of airline account information available. But there’s a the bigger question here: Why can’t the big travel players simply fix their archaic business models and add these nifty features to their Web sites and stop spending energy ganging up on start-ups who unmask their flaws?

The answer comes from , of Dilbert fame. By Scott’s definition, the big travel players are a “confusopoly.” They see what Ron calls a “flaw” — burying the customer in a snowstorm of discounts intended both to entice and to confuse — as a feature, rather than a bug. Here’s Scott:

A confusopoly is any group of companies in a particular industry that intentionally confuses customers about their pricing plans and products. Confusopolies do this so customers don’t know which one of them is offering the best value. That way every company gets a fair share of the confused customers and the industry doesn’t need to compete on price. The classic examples of confusopolies are phone companies, insurance companies, and banks.

Car rental agencies are clearly confusopolies. So are airlines. Dave Barry explains how it is that no two passengers on one airplane pay the same price for a seat:

Q. So the airlines use these cost factors to calculate a rational price for my ticket?
A. No. That is determined by Rudy the Fare Chicken, who decides the price of each ticket individually by pecking on a computer keyboard sprinkled with corn. If an airline agent tells you that they’re having “computer problems, ” this means that Rudy is sick, and technicians are trying to activate the backup system, Conrad the Fare Hamster.

There are a few exceptions. One is , which competes through relatively simple seat pricing and unconfusing policies (e.g. no seat assignments and “bags fly free”). But even Southwest plays confusing games. For example, I just went to Southwest to make sure the URL was right (it used to be iflyswa.com, as I recall), and got intercepted by a promo offer, for a gift card. So, for research purposes, I filled it out. That got me to this page here:

Note that there is no place to take the last step. The “Your Info Below” space is blank. Everywhere I click, nothing happens. Fun. (Is it possible this isn’t from Southwest at all? Maybe somebody from Southwest can weigh in on that.)

So, a confusopoly.

What can we do? Governments fix monopolies by breaking them up. But confusopolies come pre-broken. That’s how they work. There is no collusion between Hertz and Budget, or between United and American. They are confusing on purpose, and independently so. No doubt they have their confusing systems fully rationalized, but that doesn’t make the confusion less real for the customer, or less purposeful for the company.

Let’s look a bit more closely at three problems endemic to the car rental business, and contribute to the confusopoly.

  1. Cars, like airlines and their seats, have become highly generic, and therefore commoditized. Even if there is a difference between a Chevy Cruze and a Ford Focus, the agencies mask it by saying what you’ll get is some model of some maker’s car, “or similar.” (I’ve always thought one of the car makers ought to just go ahead and make a car just for rentals, and brand it the “Similar.”)
  2. The non-price differentiators just aren’t different enough. For example, I noticed that Enterprise lately forces its workers to go out of their way to be extra-personal. They come out from behind the counter, shake your hand, call you by name, ask about your day, and so on. Which is all nice, but not nicer for most of us than a lower price than the next agency.
  3. The agencies’ CRM (Customer Relationship Management) systems don’t have enough to work with. While Enterprise is singled out here and here for having exceptional CRM, all these systems today operate entirely on the vendors’ side. Not on yours or mine. Each of is silo’d. How each of us relates to any one agency doesn’t work with the others. This is an inconvenience for us, but not for the agencies, at least as far as they know. And, outside their own silo’d systems, they can’t know much, except maybe through intelligence they buy from “big data” mills. But that data is also second-hand. No matter how “personalized” that data is, it’s about us, not directly by us or from us, by our own volition, and from systems we control.

A few years ago I began to see these problems as opportunities. I thought, Why not build new tools and systems for individual customers, so they can control their own relationships, in common and standard ways, with multiple vendors?  And, What will we call the result, once we have that control? My first answer to those questions came in a post for in March, 2006, titled The Intention Economy. Here are the money grafs from that one:

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.

Thanks to work by the VRM (Vendor Relationship Management) development community, The Intention Economy is now a book, with the subtitle When Customers Take Charge, due out from Harvard Business Review Press on May 1. (You can pre-order it from Amazon, and might get it sooner that way.)

Having sellers compete for a buyer’s business (to serve his or her signaled intent) is what we now call a Personal RFP. (Scott Adams calls it “broadcast shopping.”) What it requires are two things that are now on their way. One is tools. The other is infrastructure. As a result of both, we will see emerge a new class of market participant: the . It’s a role AutoSlash can play, if it’s willing to play a new game rather than just gaming the old one.

The new game is serving as a real agent of customers, rather than just as a lead-generating system for third parties such as Travelocity, or a pest for second parties such as Hertz, Dollar and Thrifty. Fourth parties are businesses that side with customers rather than with vendors or third parties. Think of them as third parties that work for you and me. In this post, of (a VRM developer), represents the four parties graphically: Fourth parties can also serve as agents for improving actual relationships (rather than coercive ones). The two magnets are “r-buttons” (explained most recently here), which represent the buyer and the seller, and (as magnets) depict both attraction and openness to relationship. They are simple symbols one can also type, like this:  ⊂ ⊃. (The ⊂ represents you, or the buy side, while the ⊃ represents vendors and their allied third parties, or the sell side.) Here is another way of laying these out, with some names that have already come up: 4 parties As of today AutoSlash presents itself as an agent of the customer, but business-wise it’s an accessory to a third party, Travelocity. While Travelocity could be a fourth party as well, it is still too tied into the selling systems of the car rental agencies to make the move. (If I’m wrong, tell me how.) Now, what if AutoSlash were to join a growing young ecosystem of VRM companies and projects working on the customer’s side? Here is roughly how that looks today: AutoSlash is over there on the right, on the sell side. On the buy side, in the fourth party quadrant, are , , , MyDex, and . All provide ways for individuals to manage their own data, and (actually in some cases, potentially in others) relationships with second and third parties, on behalf of the customer. If you look at just the right two quadrants, on the ⊃ side, the car rental agencies fired AutoSlash for breaking their system. That’s one more reason for AutoSlash to come over to the ⊂ side and start operating unambiguously as a pure fourth party.

I believe that’s what already does. While their service is superficially similar to AutoSlash’s (they book you the lowest prices), they clearly work for you (⊂) as a fourth party and not for the agencies (⊃) as a third party. What makes them unambiguously a fourth party is the fact that you pay them. Here are their rates.

For controlling multiple relationships, however, you still need tools other than straightforward one-category services (such as AutoSlash and RentalCarMagic). One circle around those tools is what KuppingerCole calls Life Management Platforms. Another, from Peter Vander Auwera of SWIFT is The Programmable Me.  These (among much more) will be the subject of sessions at the European Identity and Cloud Conference (EIC) this week in Munich. (I’ll be flying there shortly from Boston.) I’ll be participating in those. So will Phil Windley of Kynetx, who has detailed a concept called the “Personal Event Network,” aka the “Personal Cloud.” Links, in chronological order:

  1. Ways, Not Places
  2. Protocols and Metaprotocols: What is a Personal Event Network?
  3. KRL, Data and Personal Clouds
  4. Personal Clouds as General Purpose Computers
  5. Personal Clouds Need a Cloud Operating System
  6. The Foundational Role of Identity in Personal Clouds
  7. Data Abstractions for Richer Cloud Experiences
  8. A Programming Model for Personal Clouds
  9. Federating Personal Clouds

This is thinking-in-progress about work-in-progress, by a Ph.D. computer scientist and college professor as well as an entrepreneur and a very creative inventor. (By the way, KRL and its rules engine are open source. That’s cool too.)

If I have time later I’ll unpack some of this, and start knitting the connections between what Phil’s talking about and what others (especially Martin Kuppinger of KuppingerCole, who will be writing and posting more about Life Management Platforms) are also bringing to the table here.

In particular I will bring up the challenge of fixing the car rental agency market. What can we do, not only for the customer and for his or her fourth parties (the ⊂ side) but for everybody on the third and second party (⊃) side?

And what changes will have to take place on the ⊃ side once they find they need to truly differentiate, in distinctive and non-gimmicky ways? What effect will that have on the car makers as well?

When I started down this path, back in 2006, I had a long conversation with a top executive at one of the car rental companies. What sticks with me is that these guys don’t have it easy. Among other things, he told me that the car companies mostly don’t like the car rental business because it turns drivers off to many of the cars they rent, and the car companies don’t make much money on the cars either. Can that be fixed too? I don’t know, but I’d like customers and their fourth parties to help.

How about through true personalization, in response to actual demand by individual customers, such as I suggested in 2006?

How about through new infrastructural approaches, such as the ?

Hertz, Budget’s and Enterprise’s own CRM and loyalty systems are not going to go away. Nor will the ways they all have of identifying us, and authenticating us. How can we embrace those, even as we work to obsolete them?

There are two worlds overlapping here: the one we have, and the one we’re building that will transcend and subsume the one we have.

The one we have is a “free market” with a “your choice of captor” model. It is for violating this model that AutoSlash was fired as a third party by the car rental agencies.

The one we’re building is a truly free market, in which free customers prove more valuable than captive ones. We need to make the pudding that proves that principle.

And we’re doing that. But it’s not a simple, an easy, or even a coordinated process. The good thing is, it’s already underway, and has been for some time.

Looking forward to seeing you at EIC in Munich, and/or at the other events that follow, in London and Mountain View:

Meanwhile, a last word, in respect to what Bart Stevens says below. Clearly the car rental business needs to move out of the confusopoly model, and to differentiate on more than price. To some degree they already do, but price is the primary driver for most customers. (And I’d welcome correction on that, if it’s wrong.) We have a lot to learn from each other.

How about using the ‘No Track’ button we already have?

February 23, 2012 / / 3 Comments

left r-buttonright r-buttonFor as long as we’ve had economies, demand and supply have been attracted to each other like a pair of magnets. Ideally, they should match up evenly and produce good outcomes. But sometimes one side comes to dominate the other, with bad effects along with good ones. Such has been the case on the Web ever since it went commercial with the invention of the cookie in 1995, resulting in a calf-cow model in which the demand side — that’s you and me — plays the submissive role of mere “users,” who pretty much have to put up with whatever rules websites set on the supply side.

Consistent with Lord Acton’s axiom (“Power corrupts; absolute power corrupts absolutely”) the near absolute power of website cows over user calves has resulted in near-absolute corruption of website ethics in respect to personal privacy.

This has been a subject of productive obsession by Julia Anguin and her team of reporters at The Wall Street Journal, which have been producing the What They Know series (shortcut: http://wsj.com/wtk) since July 30, 2010, when Julia by-lined The Web’s New Gold Mine: Your Secrets. The next day I called that piece a turning point. And I still believe that.

Today came another one, again in the Journal, in Julia’s latest, titled Web Firms to Adopt ‘No Track’ Button. She begins,

A coalition of Internet giants including Google Inc. has agreed to support a do-not-track button to be embedded in most Web browsers—a move that the industry had been resisting for more than a year.

The reversal is being announced as part of the White House’s call for Congress to pass a “privacy bill of rights,” that will give people greater control over the personal data collected about them.

The long White House press release headline reads,

We Can’t Wait: Obama Administration Unveils Blueprint for a “Privacy Bill of Rights” to Protect Consumers Online

Internet Advertising Networks Announces Commitment to “Do-Not-Track” Technology to Allow Consumers to Control Online Tracking

Obviously, government and industry have been working together on this one. Which is good, as far as it goes. Toward that point, Julia adds,

The new do-not-track button isn’t going to stop all Web tracking. The companies have agreed to stop using the data about people’s Web browsing habits to customize ads, and have agreed not to use the data for employment, credit, health-care or insurance purposes. But the data can still be used for some purposes such as “market research” and “product development” and can still be obtained by law enforcement officers.

The do-not-track button also wouldn’t block companies such as Facebook Inc. from tracking their members through “Like” buttons and other functions.

“It’s a good start,” said Christopher Calabrese, legislative counsel at the American Civil Liberties Union. “But we want you to be able to not be tracked at all if you so choose.”

In the New York Times’ White House, Consumers in Mind, Offers Online Privacy Guidelines Edward Wyatt writes,

The framework for a new privacy code moves electronic commerce closer to a one-click, one-touch process by which users can tell Internet companies whether they want their online activity tracked.

Much remains to be done before consumers can click on a button in their Web browser to set their privacy standards. Congress will probably have to write legislation governing the collection and use of personal data, officials said, something that is unlikely to occur this year. And the companies that make browsers — Google, Microsoft, Apple and others — will have to agree to the new standards.

No they won’t. Buttons can be plug-ins to existing browsers. And work has already been done. VRM developers are on the case, and their ranks are growing. We have dozens of developers (at that last link) working on equipping both the demand and the supply side with tools for engaging as independent and respectful parties. In fact we already have a button that can say “Don’t track me,” plus much more — for both sides. Its calle the R-button, and it looks like this: ⊂ ⊃. (And yes, those symbols are real characters. Took a long time to find them, but they do exist.)

Yours — the user’s — is on the left. The website’s is on the right. On a browser it might look like this:

r-button in a browser

Underneath both those buttons can go many things, including preferences, policies, terms, offers, or anything else — on both sides. One of those terms can be “do not track me.” It might point to a fourth party (see explanations here and here) which, on behalf of the user or customer, maintains settings that control sharing of personal data, including the conditions that must be met. A number of development projects and companies are already on this case. All the above falls into a category we call EmanciTerm. Much has been happening as well around personal data stores (PDSes), also called “lockers,” “services” and “vaults.” These include:

Three of those are in the U.S., one in Austria, one in France, one in South Africa, and three in the U.K. (All helping drive the Midata project by the U.K. government, by the way.) And those are just companies with PDSes. There are many others working on allied technologies, standards, protocols and much more. They’re all just flying below media radar because media like to look at what big suppliers and governments are doing. Speaking of which… 🙂

Here’s Julia again:

Google is expected to enable do-not-track in its Chrome Web browser by the end of this year.

Susan Wojcicki, senior vice president of advertising at Google, said the company is pleased to join “a broad industry agreement to respect the ‘Do Not Track’ header in a consistent and meaningful way that offers users choice and clearly explained browser controls.”

White House Deputy Chief Technology Officer Daniel Weitzner said the do-not-track option should clear up confusion among consumers who “think they are expressing a preference and it ends up, for a set of technical reasons, that they are not.”

Some critics said the industry’s move could throw a wrench in a separate year-long effort by the World Wide Web consortium to set an international standard for do-not-track. But Mr. Ingis said he hopes the consortium could “build off of” the industry’s approach.

So here’s an invitation to the White House, Google, the 3wC, interested BigCos (including CRM companies), developers of all sizes and journalists who are interested in building out genuine and cooperative relationships between demand and supply::::

Join us at IIW — the Internet Identity Workshop — in Mountain View, May 1-3. This is the unconference where developers and other helpful parties gather to talk things over and move development forward. No speakers, no panels, no BS. Just good conversation and productive work. It’s our fourteenth one, and they’ve all been highly productive.

As for the r-button, take it and run with it. It’s there for the development. It’s meaningful. We’re past square one. We’d love to have all the participation we can get, from the big guys as well as the little ones listed above and here.

To help get your thinking started, visit this presentation of one r-button scenario, by Adam Marcus of MIT. Here’s another view of the same work, which came of of a Google Summer of Code project through ProjectVRM and the Berkman Center:

(Props to Oshani Seneviratne and David Karger, also both of MIT, and Ahmad Bakhiet, of Kings College London, for work on that project.)

If we leave fixing the calf-cow problem entirely up to the BigCos and BigGov, it won’t get fixed. We have to work from the demand side as well. In economies, customers are the 100%.

Here are some other stories, mostly gathered by Zemanta:

All look at the symptoms, and supply-side cures. Time for the demand side to demand answers from itself. Fortunately, we’ve been listening, and the answers are coming.

Oh, and by the way, Mozilla has been offering “do not track” for a long time. Other tools are also available:

Stop making cows. Quit being calves.

February 21, 2012 / / 3 Comments

Emoji_u1f42e.svg The World Wide Web that invented in 1990 was a collection of linked documents. The Web we have today is a collection not just of documents (some of which we quaintly call pages), but of real estate we call sites. This Web is mostly a commercial one.

Even if most sites aren’t commercial (I don’t know), most search results bring up commercial sites anyway, thanks both to the abundance of commercial sites on the Web, and “search engine optimization” (SEO) by commercial site operators. Online ad spending in the U.S. alone will hit $40 billion this year, and much of that money river runs through Google and Bing.

But that’s a feature, not a bug. The bug is that we’ve framed our understanding of the Web around locations and not around the fabric of connections that define both the Net and the Web at the deepest level. That’s why nearly every new business idea starts with real estate: a site with an address. Or, in the ranching-based lingo of marketing, a brand.

The problem isn’t with the sites themselves, or even with the real estate model we use to describe and understand them. It’s with their underlying architecture, called client-server.

Client-server, by design, subordinates visitors to websites. It does this by putting nearly all responsibility on the server side, so visitors are just users or consumers, rather than participants with equal power and shared responsibility in truly two-way relationship between equals. Thus the client-server relationship is roughly that of calf to cow:

calf-cow

From the teats of the cow-server, the calf-client sucks the milk of HTML and Javascript, plus : text files deposited by a website’s server in a visitor’s browser. Their original purpose was to help both the site and the visitor (the cow and the calf) remember where they were last time they met, and to retain other helpful information, such as logins and passwords.

But cookies also became a way for commercial cows and their business friends (aka third parties) to keep track of their calves, reporting back where those calves traveled, the  cows they suckled, the stuff they click on. Based on what they learn from tracking, the cows can — alone or with assistance from third parties, produce “personalized” milk in the form of customized pages and ads. This motivation is all the rage today, especially around advertising.

Nearly all the investment on ‘relating’ is still on the sell side: the cow side, because that’s where all the power is concentrated, thanks to client-server. So we keep making better cows and cow-based systems, forgetting that the calves are actual human beings called customers. We also overlook opportunity in helping demand drive supply, rather than just in helping supply drive demand.

But some of us haven’t forgotten. One is Phil Windley, a Ph.D. computer scientist, former CIO of Utah, co-founder of , and the inventor and lead maintainer of a language called , plus the rules engine for executing KRL code. (Both are open source.) The rules are the individual’s own. The rules engine can go anywhere. No cow required.

To describe the box outside of which Phil thinks, he gives a great presentation on the history of e-commerce. It goes like this:

1995: Invention of the Cookie.
The End.

To describe where he’s going (along with Kynetx and the rest of the VRM development community), Phil wrote a new book, The Live Web (a term you might have first read about here), and has been publishing a series of blog posts that deal with what he calls . Think of your Personal Event Network as the Live Web that you, as a human being (rather than as a calf) operate. Live. In real time. Your own way. You can take advantage of services offered by the servers of the world (through APIs, for example). But it’s your network, and it’s built with your own relationships. It doesn’t replace client-server, but it gives servers lots to do besides being cows. In fact, the opportunities are boundless, because they’re in wide-open virgin territory.

A Personal Event Network puts you at the center of your Live Web, with your own apps, and your own rules for what follows from events in your web of relationships. “Personal event networks interact with each other as equals,” Phil says. “They aren’t client server in nature.” Here’s how Phil draws one example:

Personal Event Network

Look at the three items indside the personal cloud:

  • At the center are apps. We’re already familiar with those on our computers and mobile devices. While they might have connections to outside services, they are personal tools of our own. They are neither calves nor cows.
  • On the left is an RFQ, or a Request For Quote, also called a .
  • On the right are rules, written in KRL.

Together those control how we interact with all the devices and services on the outside, on the Live Web. Note that those outside items are not functioning as cows, even though they also live in the commercial Web’s client-server world. They are being engaged outside the cow function, mostly through s.

Here’s how Phil explains how this works for a guy named Tim, who has a relationship with a flower shop, described here:

Tim’s personal event network has a number of apps installed. It’s also is listening on many event channels. These channels are carrying events about everything from Tim’s phone and appliances to merchants he frequents.

REI and the flowershop both have separate channels into Tim’s personal event network. Consequently, Tim can

  • Manage them independently. If REI starts spamming Tim with events he doesn’t like, he can simply delete the channel and they’re gone.
  • Permission them independently. Tim might want to get certain events from REI and other’s from the flowershop. Which events can be carried on which channels is up to Tim.
  • Respond to them independently. Tim might want to get notification events from the flowershop delivered to his phone today because it’s his wife’s birthday whereas normally merchant communications are sent to his mail box.

Tim is in charge of whether and how events are delivered. He manages the channel, delivery, and response while the publishers of these event choose the content.

This cannot be done within the bovine graces of any one company — not Apple, Facebook, Google or Microsoft — no matter how rich their services might be, and no matter how well they treat their users and customers. And not matter how much they might insist that they’re not really treating their users and customers as calves.

But they’re still playing the cow role, and we’re still stuck as calves. That’s why we keep looking for better cows.

For example take The Real Problem With Google’s New Privacy Policy, in . The subtitle explains, “The tech giant owes users better tools to manage their information.” Well, that might be true. But we also need our own tools for managing relationships with Google — and every other site and service on the Web. And we need those tools to work the same way with every company, rather than different ways with every company.

(We have this, for example, with email, thanks to open, standard and widely deployed protocols. Email is fully human, even if we submit to playing the half-calf role inside, say, Gmail. We can still take our whole email pile outside of Gmail and put it on any other server, or host it ourselves. Email’s protocols and standards support that degree of independence, and therefore of humanity as well.)

Another example is The Ecommerce Revolution is All About You, in . Here’s the closing paragraph:

So shoppers, be prepared to give up your data. In the coming year, we’re going to see many more retail sites ramping up data-driven discovery. And e-commerce sites who aren’t thinking about how to mine social and other forms of data are probably going to be left in the dust by the Amazons and Netflix’s of the next wave of personalization.

Credit where due to Amazon and Netflix: their personalization is best-of-breed. Their breed just happens to be bovine.

As it did in 1995, Amazon today provides their own milk and cookies for their own calf-customers. As a loyal Amazon customer, I have no problem being its calf. But I can’t easily take my data (preferences, history, reviews etc.) from Amazon and use it myself, in my own ways, and for my own purposes. It’s their data, not mine.

The problem with this — for both Amazon and me — is that Amazon isn’t the whole World Live Web. I don’t shop only at Amazon, and I would like better ways of interacting with all sellers than any one seller alone can provide, even if they’re the world’s best online seller. (Which Amazon, arguably, is.)

So sure, the Ecommerce Revolution is “about us.” But if it’s our revolution, why aren’t we getting more of our own tools and weapons? Why should we keep depending on sellers’ personalization systems to do all the work of providing relevance for us as shoppers? Should we give up our data to those companies just so they can raise the click-through rates of their messages from one in less than a hundred to one in ninety-eight — especially when many of the misses will now be creepily “personalized” as well?

Shouldn’t we know more about what to do with our data than any seller can guess at? And if we don’t know yet, why not create companies that help us buy at least as well as other companies are help sellers sell?

Well, those kinds of companies are being created, and you’ll find a pile of them listed here, Kynetx among them.

VCs need to start looking seriously at development on the demand side. Kynetx is one among dozens of companies that are flying below the radar of too many VCs just looking at better cows, and better ways to sell — or worse, to “target,” “capture,” “acquire,” “lock in” and “manage” customers as if they were slaves or cattle.

The idea that free markets are your-choice-of-captor is a relic of a dying mass-market-driven mentality from the pre-Internet age. Free markets need free customers. And we’ll get them, because we’ll be them.

We — the customers — are where the money that matters most comes from. Driving that money into the marketplace are our own intentions as sovereign and independent human beings.

In the next few years we’ll build an Intention Economy, driven by customers equipped with their own tools, and their own ways of interacting with sellers, including their own terms of engagement. This was the promise of the Net and the Web in the first place, and we’ve awaited delivery for long enough.

Time’s up. The age of captivity is ending. Start placing your bets on the demand side.

Toward a new symbiosis between Demand and Supply

January 23, 2012 / / 1 Comment

I’m listening and watching with fascination to Keith Scovell‘s Shopper Power videos. In these Keith describes progress being made in a VRM direction by retailers and their upstream suppliers, detailing efforts made by Starbucks, Hallmark, CVS, Tesco/Homeplus, Frito-Lay, Reese’s and other companies — all recognizing that customers’ range of control over interactions in retail environments is increasing dramatically, and will increase a great deal more.

I haven’t watched all of Keith’s videos yet, but I’m taking notes as I do, and I recommend that others do the same, if they’re interested in how increasingly empowered and independent customers relate to vendors — especially at the retail level in the brick & mortar world. And how clueful vendors are working on better ways of interacting with those customers.

It’s interesting that Keith is coming from the CPG — Consumer Packaged Goods — industry, and not CRM, which is most commonly posed as the counterpart to VRM. Yet I think that CPG, and retailing in general, is the more direct counterpart of VRM. Talking about where the rubber meets the road here. Keith talks about market signals, which go in both directions. One purpose of VRM is to provide better means for signaling, as well as for engaging over the longer term.

Four things are important to point out as developers on both sides get acquainted:

  1. Customers will become more independent. That is, they will have their own ways of expressing demand, loyalty, brand preferences and terms of engagement. Many of today’s solutions on the vendors’ side — loyalty cards, for example — are both coercive and inconvenient, as customers are required to carry around many of these things, all with their own proprietary and silo’d systems. New tools and systems will emerge on the customer’s side to provide both independence and better means of engagement. And those tools and systems will be personal, not just social.
  2. VRM tools will not only provide or support that independence, but common means for engaging many vendors the same way. For example, they will provide ways for a customer to change his or her address one time for many vendors rather than many times for many vendors.
  3. The new market ecosystem will be symbiotic one between demand and supply. Not a coercive or competitive one. That means the best customers and the best vendors will be caring about each other and watching out for each others’ best interests. This will actually reduce need on the vendors’ side for discounts, coupons and other gimmicks, which often clutter and confuse an otherwise smooth relationship with customers, and which have other hard costs as well.
  4. New user interface elements will be required.

For that last two reasons I’ve flanked the text above between two r-buttons. Keith visits QR codes and other handy signaling devices already being used in the retail environment. But it’s still early, so we still lack are user interface (UI) elements that represent actions and states within relationships between buyers and sellers. As work in the VRM development community goes on the demand side moves toward work Keith and others are doing on the supply side, the two magnets will place a new force field over the marketplace: one that brings mutual interests into alignment, even as competition and other familiar market interactions continue as they always have.

SOPA and Customer Commons

January 18, 2012 / / 6 Comments

Imagine that Customer Commons had been created a year ago. To guide that imagining, here is the copy that matters from the placeholder page:

Customer Commons is about us.

  1. We are a com­mu­nity of customers.
  2. We are funded only by customers.
  3. We serve the inter­ests and aspi­ra­tions of customers.

We are the 100%

Customer Commons is a companion organization to ProjectVRM, and in the long run will be its successor. Think of ProjectVRM as the launch pad and rocket for getting VRM development and research into orbit — and of Customer Commons as the rest of the universe.

So the future is wide open.

SOPA, however, is about enclosing some of the Universe’s commons, which is essentially NEA:

  1. Nobody owns it
  2. Everybody can use it
  3. Anybody can improve it

What would we — the 100% who are customers — be doing about SOPA?

Customer Commons is just in the planning stages now. We want it up and running by the time The Intention Economy: When Customers Take Charge comes out in May. What should it be and how would it work?

All thoughts welcome.

P.S. ProjectVRM is a Berkman Center project, and therefore does not take an advocacy position on matters of public debate, such as SOPA — which is why this blog is not offline or blacked out today.

FWIW, my own (naturally optimistic) point of view is well expressed by Harold Feld in SOPABlackout And the “Internet Spring”.

Customers are personal, cont’d

January 17, 2012 / / Comments Off on Customers are personal, cont’d

There are so many excellent comments and questions following my last post, Consumers are social, Customers are personal, that I decided it would make more sense to address them in a new post than in comments under that one. So here goes.

Joshua Marsh, the CEO of Conversocial, writes,

I’m interested in your comment that social media is only semi-personal – could you expand on that point?

I think what you could be getting at is the current lack of tie up between social identity and customer records, which is a challenge (but one that can be overcome), and one we are working on. Or do you mean something else?

There can be additional benefits to customers for taking their customer service issues into social media over other channels. Once companies wake up to the fact that there are public complaints and issues on their Facebook pages, in tweets when people search for their company names etc, they will often start delivering better customer service over social than they do through other channels. The fully public nature of the issues and resolutions forces them to deliver the best service they can. I believe this will drive a virtuous circle – as companies deliver better service through social, more and more customers will begin to use it as a service channel.

First, I want to make clear that when we talk about “social media” today we mostly mean Facebook, Twitter, Google+, and other commercial services. Not telephony, email, texting, instant messaging and other social activities that have been around for a long time but tend not to get included in the “social media” category.

Three things make social media less than fully personal:

  1. As CRM Software said in another commment, “your conversations are personal yet public.”
  2. We don’t own social media. Yes, we use them, but they are not ours. They belong to Twitter, Facebook, Google or whomever. For what it’s worth (and it’s a lot), we can own domains on the Web and elsewhere. We can own email systems. We can own IM systems. We can be our own publishers, syndicate our own postings. Standards and protocols such as TCP/IP, HTTP, IMAP, POP3, SMTP, RSS and XMPP make that possible. Those standards and protocols give us independence, which is a founding virtue of the Net, of the Web, of blogging, of instant messaging. Those standards and protocols are used by social media, but we remain dependent rather than independent within social media environments. So it is critically important to remember and preserve the distinction between independence and dependence on the Net.
  3. Social media are designed to be personal, but in a social context. Facebook is for sharing with friends. Twitter is for following others and being followed. Linkedin is for sharing personal profiles. Google+ is for “real life sharing,” they say. Sure, we can get personal benefits out of social media, but as a collateral benefit more than as a core purpose.

The thing is, when all you’ve got are social hammers, even personal problems look like social nails. And this is what we are doing when we use social media to fix the problems of CRM and customer service, on either the vendor’s side or the customer’s. Yes, lots of progress has been made on the sCRM front, Conversocial is a leader in that movement, is clearly doing a good job, and should continue doing that. Yet, as individual customers we still lack a box of tools that are ours alone, and that help us relate personally with the companies whose goods and services we buy and use.

This is why a community of developers has been working on building out the tools called VRM, for Vendor Relationship Management, to work as customer-side counterparts of vendors CRM — Customer Relationship Management — systems.

About identity: yes, it’s critical. The quesitons around it are huge. For example, are we — as sovereign, independent and self-actualized human beings — who we say we are? Or are we reducible to our @-handles and “social identities” on the likes of Facebook? When Mark Zuckerberg introduced Facebook Connect in 2008, he said it would make it easy “for you to take your online identity with you all over the Web.” Note the presumption: that your handle with Facebook is “your online identity.” Sorry, but it isn’t. It’s handy as a shortcut, but it’s not who you are.

But in fact I was talking about something other than identity in that last post. I was talking about working on what’s personal in more than just social ways.

Louis Columbus writes,

1. The depth and breadth of personal information being shared on social media is creating advertised-based business models that will surpass Google AdWords’ revenue within five years or less. That’s coming thanks to the torrent of data that streams into social networks daily.

2. Improving customer service systems is indeed not enough because it still doesn’t strike to the center of what really needs to happen. Companies need to translate process efficiencies into more relevant, timely and focused customer experiences. The dividend of process efficiency needs to be spent on greater empathy for the customer. Profits will follow if a company can get its head around the concept of delivering an exceptional experience.

3. VRM shows potential to make each interaction more relevant, focused and over time, trusted.

Bottom line: the companies who will emerge stronger for all this turbulent change will stay focused on customer experience, empathy and intimacy as their compass and not waiver from that course.

Louis’ predictions about the future of advertising may be true. But remember: even highly personalized advertising is still guesswork. And no amount of personal data can empower any company, no matter how smart, to guess what I want or need next. Nor do I want that. First, most of the time I’m not buying anything. Second, when I am ready to buy something, I need instruments that help me express my intentions more than I need ones that are guessing what I might want and pushing something at me through a medium that’s paid to do the pushing.

This is why I believe what will emerge over the next five years is not a more personal attention economy (led by social media) but an intention economy, based on what customers actually want. This is why I wrote The Intention Economy: When Customers Take Charge, for Harvard Business Review Press, which is due to hit the shelves on May 1.

I agree with Louis’ second point about what companies need to do; and will add that the customer experience should be one for which the customer is at least partly responsible. Also that the experience of relationship should extend across many vendors in the same way, rather than working in isolation with each vendor. For example, I would like as a customer to experience changing my address with many vendors at once. No vendor working alone with one CRM system can deliver this experience. VRM is required for that, along with CRM systems that welcome simple and standard address-changing methods that work the same way across many different vendors.

I also agree with Louis’ bottom line: that vendors will have to be “focused on customer experience, empathy and intimacy.” And I believe this will require that customers welcome VRM tools when customers carry their own weight on their own sides of relationships.

Don Peppers writes,

One additional thought about the future of social media: Today, social media is funded by advertisers (the real “customers”), and provides a mechanism for giving them access to consumers. But this will almost certainly change as more and more social media services and platforms become open source. An open-source, community-developed platform for social interaction will unify consumers and customers, no?

When Twitter first appeared on the scene, for example, it took many months before the first commercial money began funding it. The consumers it served all worried that without some kind of external funding, the service might disappear. Sooner or later, we’ll find that IT and communications costs have become so low that very little, if any, commercial sponsorship will be required to sustain a genuinely consumer-oriented social media platform.

I believe we won’t get fully-developed one-to-one relationships (that link goes to the seminal work on the topic, buy Don Peppers and Martha Rogers) without significant contributions of code and standards from free and open source developers. You’ll find many in the roster of VRM developers and developments, but we need many more.

I also think we need to free ourselves from the knee-jerk belief that commercial sponsorship is the first-option business model for popular services on the Net. The successes of the Net, the Web, email, RSS and much else have long since disproven that belief.

In the long run far more economic activity will be supported by free and open standards, protocols and other building materials, than by commercial services paid for by advertising.

As for the promise of both social media “big data” for better customer relations, I like what Alan Mitchell said in his comment:

…there is a vast difference between the sharing of unstructured information on a one-to-many basis (social media), and the sharing of structured information on a one-to-one basis (VRM). As you point out, only the latter allows for real personalisation.

Alan has been a leading figure in VRM development, by the way.

Hanan Cohen writes,

Many people say that “Social media users are not customers of them, they are the product being sold.”

I think that we are the suppliers and try to prove it here;

http://info.org.il/english/The-Users-are-the-Suppliers.html

Can you please get in touch with an economics scholar you trust and ask her to sort out the difference in definitions?

It is quite true that we are upstream suppliers of valuable content to social media, and not just consumers of services, and Hanan makes many good points at that link.

As for distinctions between consumers and customers, I like what Doug Rauch — the former President of Trader Joe’s — told to me when I was working on my book: that consumers are “a statistical category.” “We believe in honesty and directness between human beings,” Doug said. “We do this by engaging with the whole person, rather than just with the part that ‘consumes.'”

Hope that helps.

Consumers are social, Customers are personal

January 14, 2012 / / 11 Comments

Social media are a partial and temporary solution at best to a pair of linked problems that are essentially personal:

  1. dysfunctional customer relationship management on the vendor’s side; and
  2. minimal vendor relationship management on the customer’s side.

In the absence of solutions to both problems, vendors still see customers as consumers, and that too is a problem that hasn’t yet come to a head, because we still don’t fully grok the difference between consumers and customers. As a result, we think social media looks like a the good answer rather than a better question. That question is, How can we get companies and media to stop treating us as consumers and start treating us as real customers?

To see what needs to be done, check out Consumers Punish Companies that Ignore Them, by Eric Sass in MediaPost. In that piece Eric sources a pair of Conversocial studies that contain plenty of grist for social media and marketing mills. Here they are, from the Conversocial blog:

Here are some samplings from Eric’s gleanings:

  • “…more than 60% of complaints and question about retailers posted online on social media are ignored, in part because of the sheer volume of content created on sites like Twitter and Facebook.”
  • “30% of the retail chains surveyed don’t respond to any questions or complaints posted on social media, effectively choosing to ignore issues mentioned in these forums.”
  • “…78% believe that social media platforms will soon replace other means of customer service altogether or at least become one of the top ways to communicate with corporations.”
  • “…among the group which has communicated with companies via social media, 32.5% said they were either neglected or totally ignored; that works out to 16.5% of the total…This included ‘inadequate response times, unanswered queries, and overall unmet expectations.’
  • “What’s more, ‘respondents were also adamant that such corporate behaviors would have some or much effect on their future decision to do business with offending corporations.’
  • “27.3% of respondents said being ignored by companies on social media makes them ‘very angry,’ and 27.1% said they’d stop doing business with the offending company altogether.”
  • “88.3% of respondents said they’d be somewhat or far less likely to do business with a company that has visibly ignored other customers’ questions or complaints on social media. That includes 49.5% who said they would be ‘far less likely, and 38.8% who said they’d be ‘somewhat less likely.'”

Note that the blame here is on offending companies; not on social media, or on the absence of something better.

This is understandable because social media offer radically new and helpful avenues both for customer feedback one one side and customer support on the other. Also, social media is where Conversocial is coming from, and what MediaPost reports on. The problem for both — and for all of us thinking and talking about this stuff inside the social media framework — is that consumers are a statistical category while customers are individual human beings.

Individual human beings are all different. They are not categories, and they cannot be treated with full respect only by templates, which is what vendors — especially those serving mass markets — tend to use.

And, while social media do provide ways to get personal (say, though one’s @-handle on Twitter), they don’t have personal relationships with their users. That’s because social media users are not customers of them, because they don’t pay for them. And if you don’t pay, you’re the product being sold.

The actual customers of Facebook and Twitter are advertisers, not users. Because of this, social media has exactly the same un-visited problem that commercial broadcasting has had for the duration: its consumers and its customers are different populations. Financial accountability is to those that pay, which are advertisers, not users. Yes, there are moral and operational obligations to users, but economically speaking those obligations are lesser ones. They are those of a farmer to crops, not of a store to actual customers.

For now social media are a useful and popular way for customers to send messages to companies — and to route around inadequate customer service systems (or, in the vernacular of the trade, using sCRM routing around or to improve CRM) — the failures listed by Conversocial are not just those of companies ignoring social media, but of social media itself.

There is a structural problem as well, because social media are still only semi-personal. They are a weak substitute for direct contact — meaning that, in a person-to-person sense, even email and telephony are better.

Improving each company’s customer service systems and policies (which the Conversocial studies call for) also isn’t enough, because each company’s system is different, and all of them are silo’d. Thus the way you deal as a customer with Nordsrom, Safeway, Amazon and Apple are all different, and incompatible. If you want, say, to change your address or your phone number with all of them at once, you don’t have a single way to do that. You also don’t have a standard way to publish your own terms and conditions of engagement, to say for example “don’t track me outside of your own store or site” or “any data you collect is mine as well as yours, and should be available to me in the standard way I describe.”

Tools for doing that would have to live on your side of the relationship. Not the vendor’s, not the CRM cloud’s, and not Facebook’s. If you are a real customer, and not just a consumer or a user, you need your own tools. You need VRM — Vendor Relationship Management — tools, to work together with vendors CRM tools, not to replace them. The demand chain and the supply chain will work together.

The only case against VRM is that companies serving mass markets can’t afford to be personal, and just won’t go there. This was also the argument against PCs and the Internet. History and enterprising developers proved both cases wrong.

In fact enterprising developers in the VRM community have been working on personal tools for the last five years or more — tools that make customers both independent of vendors and better able to engage with vendors. It helps that the CRM community is aware of VRM developments, and has been awaiting them for some time. This is the year that wait will pay off. We’ll finally see VRM developments mature and start to become useful, both for customers and for vendors. So, watch the space.

Bonus link: Alan Mitchell’s comment below. I love how he says social media marketing is among “the grandest imperialist invasions of them all. The attempt to occupy day-to-day human interaction and turn it into a profit centre.” Indeed.

Also, to answer questions raised below, I have posted Customers are personal, cont’d.

Occupying the Internet

January 2, 2012 / / 7 Comments

As he so often does, Dave Winer nails it, this time with The Un-Internet. Some pull-quotes:

At issue is this: Control.

For whatever reason, the people who run the tech companies want it. But eventually the users take it.

Either the companies learn how to take the lead from their users, or they will be sidelined. Unless the laws of technology are repealed, and I don’t think laws like that can be repealed.

It’s the Internet vs the Un-Internet. And the Internet, it seems, always prevails.

The Internet is each and all of us. It is no more reducible to the companies that try to control us than time is reducible to clocks.

I believe 2012 will be the year that Net-based companies (which are most of them at this point) will discover that free customers are more valuable than captive ones.

Here’s the deal: the Internet is already occupied: by all of us. This is why the Internet will beat the Un-Internet.

We occupy the Un-Internet as well, which is why we’re going to take charge of that too, and bring it in alignment with the free marketplace that the Internet provides in a remarkably pure form.

But we won’t be a crazy herd. We’ll be sources of help as well as money. And we’ll have our own ways of providing that help. The demand chain and the supply chain will start working together. Just watch.

Older posts Newer posts

Categories

Tags

Adriana Cronin-Lukas Adriana Lukas adtech Advertising Amazon Apple Berkman Berkman Center browsers chris carfi crm customertech CX EmanciPay GDPR google Graham Hill IBM ichoosr identity IIW Internet Joe Andrieu journalism micropayments Microsoft mine! OpenID oracle paychoice privacy ProjectVRM publishing relationship relationships SalesForce SAP sCRM SugarCRM TechCrunch Terms the mine! project twitter VRM vrm hub

Blogroll

Archives

June 2023
S M T W T F S
« May    
 123
45678910
11121314151617
18192021222324
252627282930  

© 2023 ProjectVRM

Theme by Anders Noren — Up ↑