Hi Doc
Thanks for responding to my post so quickly.
Apologies to Joe for responding via his post.
I think it is worthwhile pushing back at a number of points you made in this and other email posts. In the interest of developing a synthesis in a proper Hegelian Dialectic (Marketing works being essentially the thesis, VRM is a better alternative for end-consumers being the antithesis).
First, I would like to put a few of my cards on the table. I am not a big fan of VRM. That is not primarily because I am a marketing consultant with 20 years experience running marketing operations for major telcos, banks, high-tech manufacturers and automotive manufacturers, but rather because I think the value proposition for VRM has a massive fundamental flaw. Having said that, I am always on the look-out for new ideas that can help my clients make their marketing operations more effective. That is reason enough to engage with VRM, and collaborative consumption, and co-creation, and service-dominant logic, and a whole lot more besides.
The naming of VRM is relatively trivial at this point in time as VRM, or whatever you call it is clearly not ready for prime time yet. When it is ready, main-stream marketers will help you change the name to something that is a little more marketable and a whole lot more memetic.
VRM has all the hallmarks of an inside-out concept developed by a small group (even 1,000 people of which only a few % of them are actively involved is still a small group) of marketing outsiders with an axe to grind, rather than in response to an obvious need expressed by the marketing or end-consumer market. The Henry Ford quote is an irrelevant old chestnut that just illustrates how far away the inventors behind VRM are from the innovations required by potential end-consumers. Your point is well taken that many successful start-ups start with a great idea and then take it to market. But the ones that usually prosper are the ones whose products provide a better way to get an important end-consumer job done. The ones that fail, indeed the 90% that fail, are those whose products are irrelevant to end-consumers’ lives.
The Apple iStores millions of apps are a great case in point. The apps that do well are those that help end-consumers do one job really well, whether keeping in contact with friends, finding out if their flight is on time, or identifying the song playing in the background. App success follows a power-law distribution; for every successful app that makes its creator money there are thousands that lose their creators money hand over fist. The ones that work are the ones that help end-consumers do an important job better than the tools they currently have.
The examples that you quote of PCs, graphical browsers and smartphones are nice but also hardly relevant. And they miss the essential point that winning start-ups typically focus on making life easier for end-consumers to do things they want to do. VRM does not do this, nor from what I can see (and I am willing to be corrected) has any substantive work been done to look at, e.g. end-user shopping jobs-to-be-done, that would provide a clear set of requirements as to how to help them. Instead, a group of smart developers have taken it up themselves to develop products that the end-consumer should like. Don’t be surprised if they don’t!
I cannot for the life of me see why any end-consumer would be interested in VRM in its current form. Or why any end-consumer would be bothered to jump through all the hoops that it requires. Sure, there will always be a few early adopters that like to try things out, however, these are often not typically influencers. Why would an ordinary Joe, like me, bother to send out an RFP for my weekly groceries, or my next pre-paid telephone SIM card, or even my life insurance? There are plenty of intermediaries who will help me do this and as all marketers know, we are creatures of habit, unlikely to move supplier until things turn sour. And how would VRM help me discover new product categories that I don’t even know exist? Social curation through my peers will do that, but VRM? I don’t think so. And why should I trust a VRM vendor (VRM Vendor Relationship Management anyone?) to get me the best deal anyway. All I am doing is swapping one intermediary that I know for a new one that untried and untested.
I could potentially see why an advanced marketer would be interested in VRM. If it helps them develop more profitable relationships with customers that build incremental stickiness, loyalty and profitability. But marketers have a veritable arsenal of tools at their disposal already to help them do this: from good old promotions, through behaviourally targeted coupons, to points-based loyalty programmes. All of these depend on the marketer analysing the hell out of their existing customer data to identify little groups that may be in the market for this product or that service. And it clearly works. For a piece of frequent flyer programme strategy work that I have been doing for an airline client I reviewed 20 econometric studies of FFPs. A dominant airline at a hub with an FFP adds 12-18% of the average fare paid to the ticket price through creating member lock-in and 6-14% of the average fare paid to the price through reduced price sensitivity. With results like these already available through tried and tested tools, why would any FFP marketer be bothered to take a punt on VRM?
VRM is an interesting idea. And the consumerist in side of me really wants it to work. But currently it is just that; an idea. It’s biggest flaw is that it doesn’t obviously help end-consumers to do anything that they would remotely be expected to want to do. Now or in the future. Hoping that the first few VRM apps will steer them away from marketing with its behaviourally targeted messages, attractive promotions and addictive loyalty schemes is pure fantasy. Sadly, hope is not a viable business model.
I will stick with the VRM discussion through thick and thin. And if it ever becomes even remotely viable, I will be the first to start to talk about it to my corporate clients. But we are clearly not there yet. Somehow, I doubt if we ever will. Show me I am wrong!
Best regards from Cologne, Graham
Am 15.03.2013 um 16:46 schrieb Joe Andrieu:
Agreed. PIDM has just as many shortcomings, if not more, than VRM. It even costs 33% more in letterrs!
Both names are so non-user friendly as to be practically useless in describing the value proposition to regular folks.
VRM worked because it created traction and I sometimes use it to direct my discussions. If people know VRM, I can follow one path. Most do not, so I focus on benefits and use cases.
PIDM suffers the same "management" conundrum. Nobody wants to have to manage anything. We just want to be able to. To me, PIDM ends up more limiting than clarifying. Identity is simply how we correlate parties between transactions. It's about how identifiers and identifying characteristics can be used to build a consistent mental/data model across contexts. It has nothing to do with the working data set that matters to what anyone is doing at any given time. My word documents or spreadsheets on my computer aren't my identity, but they are my data.
The most important words in this email, for example, have nothing to do with identity. But they are the important information context for anyone who might want to contribute in a meaningful way. Yes, it might matter that Doc said this or Nathan said that, or the Graham framed the initial post, but the words used by each shape the meaning of their names at least as much---and probably more than---their names shape the meaning of the words.
In the US discourse on identity, this has led to a specific separation between Identity Providers and Attribute Providers. Identity providers help you correlate people from session to session. Attributes give you more details about particular parties. Despite initially bundling attributes with identity, those behind FICAM, OIX, IDESG, and NSTIC have all acknowledged that identity and attributes are much more powerful and more gracefully handled when separated.
That said, identity should just work. And we should have sovereign control over any information shared and used on our behalf.
But I have no idea what term will gel in the public discourse for describing the magic we're creating here. So, try another. Sooner or later something will stick.
On Fri, Mar 15, 2013, at 08:25 AM, Nathan Schor wrote:
+1 Doc. To paraphrase some admiral “Damn the term. Full speed ahead”