Based on the previous post, a thought:
How do we stop thinking about "transaction costs" and, instead, start thing about *relationship costs* (or perhaps their glass-half full counterpart "relationship *value*")?
February 05, 2009
December 12, 2008
Ask Not What Your Customers Can Do For You...
There are some solid points in this article. Yet, the overall tone is
a bit offputting; a paean to the "customers are a resource to be mined"
mentality. Customers need tools of independence and engagement, not a new form of servitude. From HBS Working Knowledge:
"An organization's best customers -- measured in terms such as size, loyalty, or lifetime value -- often are the most willing to go to work for it, whether that means referrals of new customers, ideas for new products or processes, or even help in the selection of its frontline employees. Of greater significance than satisfaction or even the willingness to recommend the organization to others, these 'ownership' behaviors can make some customers more than a hundred times more valuable than others."
(A big thanks to Denise Ryan at Blue Marble Strategic Marketing for the pointer.)
November 14, 2008
September 26, 2008
September 23, 2008
1000 Miles To Go For The Enterprise And True Customer Relationships
As noted in my earlier post, spent the last two days up at Oracle OpenWorld, mainly focusing on how they were presenting their offerings that are being hung under the "Social CRM" banner.
First, the pragmatic bits. Oracle still has a long way to go to truly embrace the notion that the customer can be in control, or at least be a mutually beneficial party, in the business relationship. Exhibit A, the cringeworthy tag line and subhead on the page shown above. What does it say?
"Oracle Social CRM Applications leverage Web 2.0 technologies to help sales people identify qualified leads, develop effective sales campaigns and presentations, and collaborate with colleagues to close more deals quickly."
I don't even know where to start with that messaging and the general wrong-way-rubbing that it induces. Perhaps the easiest thing to point out is that it's still 100% focused on the sales team, and implicitly views the customer as the enemy, or at least simply the next transaction. One of the demos that was shown at the event last night illustrated how one of their new tools could make it easier to identify that sales opportunity that was looking like it was slipping into the next quarter's business, and how it aided the sales manager in identifying it and enabled him to encourage the rep to do anything possible to bring the business in before the quarter ended. (N.B. Recall item #7 from the customer's point of view: "I want to buy things on my schedule, not yours. I don't care if it's the end of your quarter.")
There were two bright spots, however. Number one was the communication that Oracle SVP Anthony Lye shared this morning. A few quotes and comments from this morning's presentation, from the Twitter stream (listed newer-to-older):
- kitson: #oow08 #Lye [Damn. Battery's dying, and there's no outlet here. If I fall silent, that's why.]kitson: #oow08 #Lye "I don’t like 'CRM 2.0' because someone’s going to come up with '3.0' and '4.0' Versioning a strategy is flawed."
- acclimedia: @ccarfi Thanks for the great live tweets! Some valuable insights. #oow08
- kitson: #oow08 #Lye "I don’t expect to sell this [Social CRM] to everyone."
- kitson: #oow08 #Lye "CRM for the first 10 years was about data capture."
- kitson: #oow08 In a briefing with Anthony Lye of Oracle's CRM...
So, it's appears clear that Anthony Gets It with respect to what the right things to say are. Now, just to turn the Sayonara around to embrace the customer as relationship partner is the task at hand and exhibit that understanding via product, positioning and action.
The other bright spot was a proof-of-concept demo that was shown for customer The Body Shop. This was an iPhone application that started to inch down the path to giving more power to the customer, or at least include her in the relationship at some level. Here are a few quick shots from the keynote.
Here's an entry-screen to the application, which a customer could bring up on her iPhone when she walked into the store. Behind the scenes, profile information on preferences and purchase history would be available.
Oooh! Product! The sort of nifty thing here was access to ratings of this particular product both from the "at large" community, as well as the specific ratings from your "friends" and/or "people like you."
A hop over to a "loyalty card points" page, where points could be redeemed for discounts, etc.
Choose from one of a bunch of options for the "loyalty" bonus: Redeem Now, Email/SMS to get Rebate, Share with a Friend, or Donate to Charity.
Ok, we chose "Redeem Now." Discount code is available, take the "coupon" to the register to save a few bucks at checkout.
What I was NOT able to get were any details on how "real" the application is. The demonstration that was shown was very, very scripted, and quite a bit of the demo required the suspension of disbelief once you started to delve into the details. For example, the details around the explicit sharing of a lot of (really) personal data among "trusted" friends was assumed to "just work," with neither the social nor the technical nor the identity underpinnings given any level of discussion.
Another big thing to note: the access to purchase history and preferences and the like is wonderful, but the information still is 100% in the hands of the vendor. So, although some of the ideas feel a bit like VRM, the implementation still needs to take the big leap - let the customer control, edit, change, and manage her own data. That part is still most definitely not there. We still have the silo problem - if you had one of these apps for The Body Shop, and one for the movie theater, and one for the restaurant down the street, we'd still have the Tower of Babel problem we have today. Of course, it would just be a shinier Tower of Babel, since it's on the iPhone.
But...it's a start. Where we are now with the enterprise and how it will connect with customers feels a lot like where Big Media (and in particular the newspaper industry) was in about 2004-2005. Technically, the tools are in place, or soon will be. The real challenge is NOT a technical one. It's a social challenge. It's a humbling, or perhaps a realization, of the marketers and sales people in large companies that, no, they really are *not* in control of the "message," whatever that is. Thoughts around this were written in 2004, and before that in 2000. Those things still hold true, and it boils down to this:
The customer really is in going to be in control. Deal with it.
September 15, 2008
It's About Times for VRM
Great VRM article in the Financial Times by Alan Mitchell. An excerpt.
"When the UK market research company CCB FastMap asked consumers which method they most wanted companies to use when communicating with them – e-mail, phone, letter and so on – 63 per cent ticked the box that said “Not at all”.
Even where consumers have an existing relationship with a company, 23 per cent prefer not to have marketing communications from it. The rate rises above 50 per cent for some large utilities and banks.
Consumers are also increasingly unwilling to divulge data. The same research found that 86 per cent of consumers routinely tick the third party opt-out box when providing personal information. “People have become less happy about revealing information and especially allowing third parties to share it,” says David Cole, managing director of CCB FastMap.
This was not what customer relationship management was supposed to deliver when it was first touted in the early 1990s. The more data companies could gather about their customers, it was argued, the deeper the insights they would generate. This would lead to longer, more profitable relationships.
Instead, many companies have found themselves stuck between a rock and a hard place. On the one hand, most organisations’ transactions with their customers are too limited for them to get an accurate picture of their motivations and any data they gather quickly goes out of date. On the other hand, subsequent attempts to fill these holes by gathering more data simply intensify concerns over intrusion.
A research project in vendor relationship management at Harvard University Law School’s Berkman Center for Internet and Society has suggested a way through the impasse. The core idea of vendor relationship management (VRM) is simple: the more empowered individuals are when it comes to managing and using personal data – including the ability to manage their relationships with vendors – the greater the benefits to both sides."
August 16, 2008
Asymmetric Forces at Work
Seth says that "bringing symmetry to asymmetrical relationships is a huge opportunity for a technology company." I don't think this statement goes far enough, not by a long shot.
It's not just about technology companies.
When there are significant asymmetries, there are systemic issues, not just technical ones.
This is why efforts like ProjectVRM need to exist. This is why I'm starting to talk about buyer-driven marketplaces.
The statement above needs to be reiterated: it's not just about technology companies. It's not even "just" about business. It's about equilibrium, which just seems to be one of those states that things usually trend toward. Here are over 50 other examples.
N.B. I recognize the inherent conflict between the statement above vis-à-vis W. Brian Arthur's work on increasing returns (cite). But there are currently a lot more examples of equilibria versus increasing returns.
July 16, 2008
VRM Workshop Trip Report
My brain is full. It needs to digest.
Hopefully, some of you were able to check out the stream of the first ProjectVRM Workshop (#vrm08) that just wrapped up at Berkman. Over 40 folks attended in person, and the overall vibe was at the intersection of "wow, this is great, needed stuff" and "ok...let's get going!"
Yesterday started with a few introductory remarks by Doc Searls and Phil Malone (of the Berkman Center and Harvard Law School), and a technology review by Joe Andrieu. The group then switched into unconference mode and self-organized and created its own agenda (thanks to Kaliya Hamlin for the process facilitation). We had four concurrent tracks running during the day, and the Day 1 topics were:
- Open Social: Social Infrastructure for the Web and How to Map to VRM
- VRM and Public Media
- Volunteered (Premium) Personal Information
- VRM Adoption Ambassadors: How to Talk to Big Companies Trying to Understand VRM
- VRM and Healthcare: Is Medical Home a Stepping Stone to VRM?
- Trust Services as VRM Foundation
- VRM Organizational Issues
- GRM: Government Relationship Management
- Information Portability: The Enemy of Good is Better (OAuth, OpenID)
- Intra-Enterprise VRM
- VRM and Enterprises: Customer v. Vendor and Partner v. Vendor
- Using VRM as a Personal Address Manager
- Employability and Recrtuitment
- Relationship Networks and the Mine!
(Like any great event, there were personal tradeoffs to be made, with multiple "dammit, I want to go to BOTH of these!" moments occurring.)
Day 2 continued right where Day 1 left off, with:
- VRM Compliance
- R-Cards (Relationship Cards): The Devil is in the Details
- VRM as Disruptive Innovation: Vendor Adoption and Best-Fit Markets
- Interactive Community Future Mapping
- VRM and Charity
- Customer-Driven Markets
- RelButton and the Media
- Product Representation
- RelButton Standards Track
- User-Driven Search
I facilited two of the conversations, "Intra-Enterprise VRM" on Day 1 and "Customer-Driven Markets" on Day 2.
The Intra-Enterprise VRM session was one that was triggered by a passage from the book Reinventing the Bazaar by John McMillan. In the book (p. 168), there was a section that gave me pause:
"Herbert Simon, economics Nobel laureate and polymath, offered a fable to illustrate how much of a modern economy is ruled not by markets, but by organizations. Simon imagined a visitor from Mars who "approaches the Earth from space, equipped with a telescope that reveals social structures." In the Martian's telescope, firms show as solid green areas, while market transactions show as red lines, so the economy shows as a spider's web of red lines and green areas. Most transactions occur within firms, so organizations make up most of the landscape the Martian sees. If it sent a message back home describing the scene, our Martian would not describe it as "a network of red lines connecting green spots," but as "large green areas interconnected by red lines."
This was one of those "ah-hah" moments. Up until yesterday, every conversation I'd either heard or had regarding VRM focused solely across the customer-vendor interface; that is, the conversations focused on cases where each party was part of a different organization. But if Simon's Martian-with-a-nifty-telescope fable is true, of :course: most parties who interact with each other are within the same organizational entity!
The key things that came out of the ensuing conversation were the following:
- A leading opportunity for VRM within the enterprise is around the idea of a "personal data store" for one's resume/CV, skills and past experience.
- VRM could be used to enable internal "innovation markets"
- Customer-driven production processes (e.g. kanban) are, some ways, reminiscent of VRM
- Agreements such as SLAs (Service Level Agreements) or OLAs (Operation Level Agreements) are also reminiscent of VRM
It was the first item, a personal data store for one's CV that precipitated the most conversation within this particular breakout group. The rap went like this...each individual, when starting with an organization, would be provisioned a "personal data store" on the network, along with provisioning of the normal first-day-of-work provisioning of phone number, desk, office supplies, company email address, and the like. That personal data store would be the repository of one's experience within the organization -- projects that were attempted, their results, any quantifiable objectives that were tracked along the way, etc. In enabling (and encouraging!) each individual to keep her CV up-to-date in this manner, both the employer and the employee reap benefits.
The employee reaps benefits in a number of ways. First, the personal data store is portable; that is, she can export all her information at any time. So, if she were to leave the organization, she'd have her own personal record of her accomplishments, skills and experiences already up-to-date when getting ready to search for new opportunities in the market place. Similarly, someone who took the effort to clearly publish her skills via her personal data store within the organization would be more likely to be able to be matched with projects or divisions within the organization that could benefit from her skills. (N.b. The converse is also true. You don't keep yours up to date, you have less of a chance of getting on a cool project.) Similarly, depending on how often the CV was updated, it may even have the potential to reduce (or eliminate) the need for tedious bulk status reporting -- it's already in there! All management needs to do is run a report for the updates to the CVs of individuals within a division or on a project to know what the latest-and-greatest was.
The organization benefits as well. Now, there is a clear way to look across the individuals in the organization, and know what skills are where they should be, what ones are available for an upcoming project, and what ones are perhaps ready for an opportunity for new, relevant challenges.
The second area we talked a bit about was the opportunity to use VRM as the infrastructure of an internal "innovation market." An example was given as follows: an engineer working on a project has hit a thorny problem that he can't seem to solve. So, instead of banging his head against the wall further for one more day, he instead creates an internal "RFP" (Request for Proposal) that describes the problem that needs to be solve. The engineer then releases that RFP to an internal marketplace, where others with the skills, interest, time or insight to solve the problem would propose various solutions to the problem. Additionally, those within the organization who responded to the RFP with a viable solution would also be eligible to partake in a portion of the benefits that accrued to the organization as a direct result of the innovation.
Despite the length of this post, it really only scratches the surface of what was discovered and discussed throughout the workshop. However, my plane is landing soon back at SFO, so this one's a wrap. Check out more coverage of the conference at http://cyber.law.harvard.edu/projectvrm/VRM_Workshop or on Twitter tag #vrm08.
Another post soon summing up Day 2, with a special focus on the idea of Customer-Driven Markets. Seeya soon.
May 12, 2008
VRM Update and Overview, May 2008
Headed down to Mountain View for the Internet Identity Workshop, which starts today. Looking forward to both catching up with a number of old friends, as well as having some great conversation with a number of new ones.
I'll be doing a quick overview of VRM this afternoon. Click either on the thumbnail over on the right or the embedded slides below to see my slides.
Seeya soon.
May 10, 2008
The Cuckoo
I have a strong positive predisposition to rational contrarians, and generally like those who use a combination of fact and story to challenge the current status quo. So, I was very much taken with Alec Muffet's most recent post regarding how we handle the concept of "identity" as is spans both the offline and online worlds. Alec self-describes his work thusly:
"This is not a white paper. This is an opinion-piece, possibly a polemic. In it I expound what I believe rather than making an argument for you to believe it too."
I'll do the 100-word version here, but you really, really need to read the original source piece, entitled "Hankering for a World Without 'Identity' or 'Federation.'"
Alec makes the following key points:
- We need to be able to control our own identity and related authority, and not be compelled through legal or market means to outsource those tasks to a third party
- There may be other means than the "certificate authorized by a higher power" (e.g. a driver's license) to verify one's ability to do something -- we may be able to prove our capabilities at "time of need" (think about CAPTCHAs or field-sobriety tests)
- One alternative to "credentialling" is relationship-building. If you have a trusted relationship over time, you don't need any "credentials" issued by a third party...the relationship itself is the credential
- If someone has the tools to manage his or her relationships and those tools are under an individual's control, we may have the basis for what is a new and, perhaps, better way to solve this problem
While there is quite a bit of valid side-bar conversation regarding whether Alec perhaps erroneously lumps some current technical identity efforts with historical lead zeppelins such as Microsoft Passport, the whole piece is worth a thoughtful read, as it challenges some very fundamental human/Western processes on how, and perhaps more importantly when, we prove someone has the credentials they require.
photo credit: CaptPiper
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