Re: [projectvrm] Is VRM an Ideologically-inspired Dead-end?

Hi Iain

Before we start looking at metrics shouldn't we have defined an economically 
viable and working business model that contains a balanced scorecard of 
performance measures? Marketing already has one. I am not sure that VRM has 
yet.

I would expect VRM to have a significantly higher response and closure rate 
per RFP than marketing has per target customer contact. But there is so much 
more to it than that if we are looking at a completely different system for 
transacting with customers. We can leave real relationships and engagement to 
the flights of fancy of business.

Is there a robust economic model for VRM anywhere? I am thinking Business 
Model generation model rather than polemic book.

Best regards from Cologne, Graham

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Am 15.03.13 um 20:43 schrieb Iain Henderson

> Certainly Graham. I'm asking because I think we'd benefit from setting a 
> benchmark around what you and others marketers on the list regard as good 
> performance in customer management in the current paradigm. We can bring in 
> other established metrics such as Net Promoter over time.
>
>
>
> My suspicion is that VRM style propositions will perform better on these 
> metrics over time.
>
>
>
> Worth a try?
>
>
>
> Iain
>
>
>
> Sent from my iPhone
>
>
>
> On Mar 15, 2013, at 18:24, Graham Hill 
> <
 >
>  wrote:
>
>
>
> > Iain
>
> >
>
> > That's an interesting question. But before I respond with hard numbers,  
> > do expain your reasoning for asking it.
>
> >
>
> > Best regards from Cologne, Graham
>
> >
>
> > Am 15.03.2013 um 18:42 schrieb Iain Henderson:
>
> >
>
> >> Graham, what's the best response rate you have ever had to one of your 
> >> many marketing campaigns; both initial response and conversion rate?
>
> >>
>
> >> Iain
>
> >>
>
> >> Sent from my iPhone
>
> >>
>
> >> On Mar 15, 2013, at 17:16, Graham Hill 
> >> <
 >
> >>  wrote:
>
> >>
>
> >>> 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.
>
> >>>>
>
> >>>> -j
>
> >>>>
>
> >>>>
>
> >>>> On Fri, Mar 15, 2013, at 08:25 AM, Nathan Schor wrote:
>
> >>>>> +1 Doc.  To paraphrase some admiral “Damn the term. Full speed ahead”
>
> >>>>>
>
> >>>>> Nathan Schor
>
> >
>
> > --
>
> > Dr. Graham Hill
>
> > 
 
>
> > UK +44 7564 122 633
>
> > DE +49 170 487 6192
>
> > http://twitter.com/GrahamHill
>
> > http://www.linkedin.com/in/grahamhill
>
> >
>
> > Partner
>
> > Optima Partners
>
> > http://www.optimapartners.co.uk
>
> >
>
> > Senior Associate
>
> > Nyras Capital
>
> > http://www.nyras.co.uk
>
> >