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

Hi T.Rob

Thanks for your thoughtful response. I will do it the justice it deserves by 
reading it through carefully again over the weekend before responding.

Many thanks for taking the time to respond.

Best regards from Cologne, Graham

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Am 15.03.13 um 20:57 schrieb T.Rob

> Hi Graham,
>
>
>
> 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.
>
>
>
>
>
>
>
> The key here is the phrase "in its current form" and you are correct that it
>
> isn't yet compelling to the masses.  But it isn't supposed to be at this
>
> point.  Right now we are at a stage of trying a number of implementations,
>
> both competitive and collaborative, in order to explore the possibilities,
>
> drive out requirements and prove the concept.
>
>
>
>
>
>
>
> Implicit in the questions posed above is an assumption that VRM is supposed
>
> to help a customer "get the best deal."  If "best deal" is defined as
>
> "lowest price" then that's not at all the point.  To me, "best deal" is
>
> largely about rebalancing power in the relationship with my vendors.  You
>
> mentioned app success following a power law.  I'd offer a different
>
> interpretation of that term as "those who have the power make the law"  and
>
> right now that balance definitely falls on the side of the vendors.  If you
>
> want to use an app or online service you have to agree to their click-wrap
>
> terms.  If the app or service is popular and growing, they have no incentive
>
> to alter those terms, nor any way to measure the size of the market segment
>
> who would participate if offered better terms.  I'm willing to pay a premium
>
> to work with vendors who offer me parity in the relationship.  It's not the
>
> best price but it is definitely the best deal and VRM is the only thing on
>
> the horizon that is trying to deliver that to me.  Even though I'm arguably
>
> not an influencer, I know that VRM won't work the way I want until it does
>
> become a mass market capability so I'll use what influence I have to help it
>
> grow.
>
>
>
> 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?
>
>
>
>
>
>
>
> So if I understand this part correctly, the question is "why would a
>
> marketer be interested in VRM when an adversarial relationship with the
>
> customer adds 6~18% to the margin?"  Have cooperative relationships just not
>
> panned out in the past?  I'm not in marketing but I've known a few vendors
>
> who tried the cooperative approach with excellent results.  As a kid I was
>
> almost fired from Publix for refusing to accept a return of rotted oranges
>
> that still had the Winn Dixie tag on them.  They do quite well.  As does
>
> Zappos, Trader Joes and a host of other "rebel" companies with the crazy
>
> idea that customers will respond positively when treated well.  Airlines are
>
> the counterpoint to these examples.  I live in Charlotte which is a US
>
> Airways hub and if I drive to a nearby regional and then fly through
>
> Charlotte to my destination it can shave hundreds off my fare.  Customers
>
> know this and resent like hell being forced to choose between adding a
>
> couple hour drive to their departure and return trips versus getting screwed
>
> at their local hub and this is your example of a system that works?
>
> Airlines are one of the most hated class of vendors on the planet because of
>
> crap like this!  The first chance I get to deal with an airline that treats
>
> me with respect, I'm taking it and as noted earlier I'm willing to pay a
>
> premium on that basis.  Speaking as a guy nearing a million miles flown, a
>
> huge amount of points banked, and a willingness to ditch all that just to be
>
> treated with some dignity for a change, I'm amazed that US Airways isn't
>
> more concerned about losing me.
>
>
>
>
>
>
>
> I would also think that marketers would be interested in VRM simply for the
>
> wealth of accurate preference data.  Most of the time when I'm asked to fill
>
> out a survey, it fails to ask the right questions.  There's no check box
>
> that says "I use Amazon Price Check to make sure I'm not overpaying but I
>
> try to NEVER buy books from them because they don't integrate to Good Reads
>
> nor give me my own data so I can do that myself."   However, if in a VRM
>
> world the attributes "integrates to Good Reads" and "provides transaction
>
> metadata in XML" were commonly checked, then this capability as a market
>
> differentiator would spontaneously arise and become visible and measurable
>
> to vendors.  Furthermore, the impact of these attributes would be magnified
>
> by the fact of their visibility in the customer community.  Many people
>
> either don't realize they want these features, or that alternatives
>
> providing these features exist but would respond if they did.  VRM could
>
> make that criteria and options visible to the larger community and thereby
>
> amplify the impact into a true market differentiator.  Most of those people
>
> would not pay a buck a book for a bulk XML file with all their past book
>
> purchases, but I expect many would pay that buck a book at time of purchase
>
> in order to automate the Good Reads entry.  But Amazon jealously guards
>
> their so-called "social" features using their own version of vendor lock-in
>
> rather than making a service available that adds an extra buck a book to the
>
> purchase price to integrate transaction data with a "competitor".  One would
>
> think that marketers would embrace an opportunity to see, in hi-def clarity
>
> and near-real time, what consumers spontaneously decide is an important
>
> buying criteria.  It doesn't mean abandoning collection of data shaped and
>
> framed by the arbitrary T/F, multiple choice questions of a market survey if
>
> that continues to have value.  But the notion that an "advanced marketer"
>
> would be uninterested in what I regard as unmet decision criteria and am
>
> willing to pay a premium for strikes me as arrogant, elitist and
>
> patronizing.
>
>
>
>
>
>
>
> Not saying you are these things, but it exemplifies the treatment against
>
> which I am rebelling by participating in VRM.  I'm not here to build
>
> something which I hope people will become interested in.  I'm here because I
>
> believe the rising tide of popular resentment of the adversarial
>
> relationship between consumers and vendors already exists and that VRM can
>
> channel it into positive outcomes.  If successful, advanced marketers in the
>
> post-CRM future will be defined as the ones who first realized the value of
>
> cooperative relationships between vendors and consumers.  If it fails it
>
> will be due to poor implementation rather than customers deciding they
>
> *like* being treated as adversaries.  There's not much down side and plenty
>
> of upside for marketers from where I sit.
>
>
>
>
>
>
>
> -- T.Rob
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
>
> From: Graham Hill 
> [mailto:
 ]
>
> Sent: Friday, March 15, 2013 1:17 PM
>
> To: Doc Searls
>
> Cc: Nathan Schor; ProjectVRM list; 
> 
 
>
> Subject: Re: [projectvrm] Is VRM an Ideologically-inspired Dead-end?
>
>
>
>
>
>
>
> 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