Month: November 2008

Relationship in markets

Back after The Cluetrain Manifesto came out — first as a website (March, 1999) and then as a book (January 2000) — some of the best feedback came from people in what people used to call the Third World (that was before the first two merged into one, and a bunch of countries in the third group joined in). What it boiled down to was this: “‘Markets are conversations’ is a pretty bright thing for you First Worlders to say, but it’s old hat with us. Your next job is to understand how markets are about more than both transactions and conversations. They’re also about relationships.”

So that’s a setup for quotage from JP Rangaswami. Noting that a fellow twitterer said the word “reputation” is so 1990. today it’s all about relationships, JP added,

Maybe it’s the Calcuttan in me, but I guess I’ve always thought that way. For me, it’s always been all about relationships. Relationship before conversation before transaction. But as the Cluetrain guys so elegantly pointed out, that sequence had been lost in the West, and society had become more about Transaction First, Conversation only if it is going to help Transaction, Relationship only if it is going to help Conversation (and therefore Transaction).

No surprise then that when Customer Relationship Management systems came out, they tended not to be about managing customer relationships, but about managing transactions and exploiting the customer. Because they were deeply rooted in Transaction First.

… and did their best to exclude conversation as well.

Later he adds,

Relationships are about abundance, not scarcity. Provided they are nonhierarchical, of course. That’s what the people who discovered network effects understood, that relationships scale differently, create value differently. Reputation is deeply intertwined with relationship, reputation is an embodiment of what your relationships say about you. So reputations should also be about abundance, not scarcity. And can enjoy network effects as well.

In the past, even in the West, this so-called “Eastern” concept of reputation was understood. Relationships did come first, then conversation, then transaction. It has been lost. Over the last twenty years or so, it is being re-found.

I’m not sure relationship — the real kind — scales. That’s obvious to me every time I open Facebook and find myself on the receiving end of hundreds of requests for me to declare my friendship with acquaintances. Follow me on Twitter if you like, and I might follow you back; but don’t expect me to “relate” in every case.

The relating we’re talking about with VRM is of both an old and a new sort, I think.

The old sort is personal. It’s something I as an individual have, and control. I believe The Mine Project does this.

The new sort is about relating as much or as little as one needs to, with vendors and other entities out in the marketplace. What matters is that you as an individual are in control, and relating — engaging for purposes beyond transaction or conversation — is the purpose.

I have much more to say about this, but need to leave my hotel and get on the first of two planes from San Francisco to Boston. More later.

Answering tweeted questions about VRM

So, with the help of vangeest and Twitter Search for #vrmevent, I’m addressing questions tweeted from the virtual floor here at the VRM Event in Amsterdam. Here goes…

vangeest: @dsearls: retweet @vangeest: #vrmevent: what is the relationship between the good old B2B marketplaces like Ariba and VRM?

As an idea VRM owes something to B2B, for the simple reason that B2B relationships tend to be between equals. Thus they can be rich and complex as well. B2C tend to be simplified on the B side, mostly so maximum numbers of templated Cs can be “managed”. Iain Henderson has talked about how there are thousands of variables involved in B2B VRM, while only a handful with CRM, which is B2C.

VRM essentially turns B2C into a breed of B2B — to the degree that both terms no longer apply. VRM equips individuals to express their demand in ways that B2C never allowed, and B2B never included.

But VRM is not a site, or a marketplace. That makes it different from Ariba, eBay, or online marketplaces. VRM may happen inside of those places, but VRM is not about those places.

Most importantly, VRM is not something that companies give to customers. It’s something customers bring to companies.

zantinghbozic: #vrmevent ichoosr: vrm is socialism 2.0 –

This reports a provocative tease by Bart Stevens of iChoosr in his opening slide. I don’t agree with the statement, but his deeper point rings true: it involves a shift in power in the marketplace, from producers to consumers. Except I wouldn’t use the word consumers. I’ll explain that later.

VRM is personal

“Social” is a bubble. Trust me on this. I urge all consultants on “social ______” (fill in the blank) to make hay while the sun shines. Even as the current depression deepens, lots of companies are starting to realize that this “social” thing is hot stuff and they need to get hip to Twitter and the rest of it. (Just ask the Motrin folks.)

And it is hot. But much of that heat is relative to its absence in other areas. “Social” has sucked a lot of oxygen out of the online conversational room.

Meanwhile, here’s the challenge: make the Net personal. Make relationships personal. Equip individuals with tools of independence and engagement. That’s what VRM is about.

I bring this up because I just ran across this post by Tim Kitchin, in which he calls VRM a “reductionistically-named discipline” (never thought about it that way, but I suppose he’s right), and sees it as a “form of social brokerage”. Which it might be, if by social you mean just two parties.

Tim writes,

Now there will always be tensions in VRM between those who approach it from a values-based standpoint of individualism and those who see it merely as a source of efficiency gains – the value perspective. Clearly, for it to work, both perspectives must fuse together…and both are also a red herring in some ways.

He’s right — up to that last point. Because the individualism of VRM is about its point of origination: the individual.

At its base VRM is simple: it’s personal. It’s me or you and the vendors (or other organizations) with which we relate — whether that relating is deep or shallow, enduring or transitory. It’s how individual demand drives and relates to supply.

It’s hard to explain that in a world where conversation drifts easily to “social” everything. And where there are aspects of VRM that will become social. Also in the absence of working code. (Though there are some things with VRMmy qualities, and may actually qualify as VRM. I hope to meet some at this afternoon’s VRM Event here in Amsterdam.) And there are individual matters, such as one’s “social graph”, that pertain. But VRM remains primarily an individual matter.

One more thing, and this is personal too. I am not anybody’s “capital”. You or your company may call me an “asset” or think you have “acquired” me, or “own” me as a customer. But I am and wish to remain a free, sovereign and independent agent of my own soul. There is no price on that. But there is far more value in it than anything you can measure with the economics of transaction alone.

Free customers are more valuable than captive ones. That’s the point of VRM. Proving it is our challenge.

Hat tip to Adriana for the pointer.

It’s VRM Weeks on the West Coasts

… of both Europe and the U.S., that is.

Got up at 5am this morning in Mountain View, Pacific Time. It was easy because my body is still partly on East Coast time (8am) and GMT (noon). That’s because I’m still fresh from London, and more VRM conversations than I can count — in addition to the excellent VRM Hub event (part of Unlocking the See-Saw*) held at Sun’s facility there, which got started for me when I walked out of the Monument tube station and stright into Geoff Jones, with whom I promptly went off to a pub. Alec Muffett shot video of the whole thing. More at Peter’s post, and  here.

It all continues starting this afternoon at IIW2008b, at the Computer History Museum (Shoreline &101). There are more meetings before and after, then a Public Media BarCamp in Santa Cruz from Friday to Sunday. VRM will be in play there too.

THEN, I’m off next week to Amsterdam for the VRM Event there.

Meanwhile, here are VRM posts by Peter Parkes, Jonathan MacDonald, Richard Muscat and Graham Saad. There are more, but no time to find them right now.

Meanwhile, a nice paragraph from Steve Bowbrick of the BBC:

User data is a valuable asset but it’s one that belongs to its subject – that’s you. Without wishing to wander too far off topic, Mark’s plan also hooks in nicely with the wider trend away from old-fashioned CRM (‘Customer Relationship Management’) to its much groovier, network-native successor VRM (‘Vendor Relationship Management’). In a VRM world your personal data is your own and you share it only with those you trust: VRM systems will allow you to rent your data to businesses who want to sell you stuff and withdraw it whenever you feel like it. It’s appropriate for the BBC to build a user-centric, VRM-style data infrastructure.

* Adriana explains more about the UK events in her comment below.

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