Tag: relationship

Off base but still kinda relevant

I suppose you’ve succeeded when people start making fun of what you’re up to. That might be what’s going on with The Vendor-Client Relationship, a YouTube video I found via markfonteijn. In this video the clients — diners at a restaurant, a customer at a hairdresser — bargain over costs. I suppose this is to point out the oddities of doing the same kind of thing in a B2B world.

It’s not about VRM at all, but it does bring up an occasional misunderstanding about VRM: that it’s about negotiating on price. It’s not. It’s about relationship; or more precisely, about relating. If price negotiation isn’t on the table, or shouldn’t (or can’t) be on the table — as would be the case at a restaurant, a hairdresser, or most retail establishments — it’s outside VRM’s scope. VRM is about enlarging the table, not turning it over.

EmanciPay does put the pricing gun in the hands of the customer, but only for goods that cost nothing and are worth more than that. Which is why our likely first deployments are with public radio.

It helps organize our understanding to divide market activities there into three categories: transaction, conversation and relationship. Of those three, the least developed in our “developed” economy is relationship. (And it’s the most developed in the less-developed world.) The most developed in our familiar settings is transaction. With VRM we are trying to create more balance between the three by concentrating on relationship, even when the relating required is minimal. We’re doing that by better equipping the buyers’ side with tools that will serve both sides.

The kind of interaction we see in that video is about as far from VRM as you’ll get.

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.

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.

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