Aw: Re: Re: [projectvrm] #Backtobasics the VRM principles: two questions

["Graham Reginald Hill" < >]

Hi Katherine

 

I doubt very much that the AMA gets MeCommerce.

 

Although many CMOs understand the benefits of offering customers more transparency about what data they have about them and more control over how it is used, and the increased trust doing that should create in customers, the vast majority of them are still fearful that adopting MeCommerce will reduce their ability to reach their quarterly product sales targets. The quarterly product P&L is still king for most CMOs. It would take a brave one to replace even a small amount of campaign, content or contextual marketing with MeCommerce.

 

This reluctance to change is similar in some ways to the widespread recognition that it is more profitable to retain customers than to replace customers that have defected. Very few CMOs have opted for the (calculable) optimum blend of acquisition vs retention marketing. For example, most mobile telco CMOs spend approx. 70% of their eight or nine-figure acquisition marketing budgets replacing customers who defected the previous year. They fix the leaky bucket not by filling the defecting customer holes but by tipping more marketing water into it. Often, this comes down to the same fear of not reaching their quarterly product sales targets.

 

The challenge for most CMOs is what should they do to reach their quarterly sales targets. If they miss their targets they will quickly be out of the door. That generally involves a lot of the marketing they know works plus a small amount of speculative marketing development. As the speculative developments show their worth, CMOs invest in them further until they become part of the marketing they know works. This is what happened to direct marketing in the 90s, content marketing in the 00s and is happening to contextual marketing now. Each new type of marketing is based on order of magnitude increases in the amount of information collected about customers and increased accuracy of implied customer intention. It is all about the economics of large marketing numbers. And it works spectacularly well for CMOs.

 

The challenge for MeCommerce is to become one of the speculative marketing developments and to prove that it drives incremental quarterly sales over and above the marketing CMOs know works. Sadly, not one of the five value-adds you mention moves the needle for most CMOs. If MeCommerce can't do that, it will be dead in the water for them. And deservedly so.

 

Even if there are significant changes in the marketing environment, e.g. caused by a particularly problematic abuse of data by marketers, aggressive data protection legislation or even government mandating of open data, I don't expect most CMOs to significantly change much about their approach to marketing. They haven't in the last 50 years. And now they are getting big data!

 

Best regards from Edinburgh, Graham

-- 
Dr. Graham Hill

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Senior Associate
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Gesendet: Mittwoch, 21. Mai 2014 um 16:29 Uhr
Von: "Katherine Warman Kern" < >
An: "Graham Reginald Hill" < >
Cc: "Doc Searls" < >, "ProjectVRM list" < >
Betreff: Re: Aw: Re: [projectvrm] #Backtobasics the VRM principles: two questions

Graham, 

Based on the AMA's definition of marketing below, it looks like the AMA may "get" VRM in the context of Marketing Research: the "function that links the consumer, customer, and public to the marketer through information."

They may be receptive to the idea that VRM re-invents the process: Instead of a top-down approach of establishing an hypothesis and validating it by "corporate" initiated information collection and analysis, VRM is a bottom-up initiated information source.  

Big Data claims to be "bottom-up" because it collects "naturally occurring" data. But it aggregates to be relevant to "corporate" hypothetical "personas" that they have developed products and offers for.

VRM adds value to all by aggregating the data for the benefit of the consumer/customer, for example:

1) transparency - give consumers a chance to see the profile and relevant offers revealed by their behavioral data.

2) accurate representation - give consumers the power to "correct" their profile and its relative positioning.

3) freedom of speech - the consumer communicates their findings and implications to signal to the marketplace the offers which they are receptive to.

4) being heard - The consumer receives a signal from the market when their signal is received, 

5) control - The consumer has the power to respond when their signal is received to opt in or out of offers.

Marketers who have offers which meet or exceed the consumer's signals can benefit immediately. Others will use this data to improve their product and marketing design. Either way the ROI is predictable.

AMA definition from Graham's link below:

Marketing:

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (Approved July 2013)

Marketing Research: 
Marketing research is the function that links the consumer, customer, and public to the marketer through information--information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications. (Approved October 2004)

​​

Katherine Warman Kern

@comradity

On May 21, 2014, at 4:11 AM, "Graham Reginald Hill" < " target="_parent"> > wrote:
 

 

Hi Doc

 

I much prefer a simple set of statements as an emergent definition of MeCommerce to a fixed definition. I have not yet met a fixed definition (of almost anything) that one couldn't drive a coach and horses through. Just look at how the American Marketing Association has had to continuously adapt its (still flawed) definition of marketing (https://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx).

 

The simple set of statements that you originally provided - although some of the statements have phenomenological issues - have allowed the various flavours of MeCommerce to emerge from their interaction as it has evolved over time. This is in roughly in alignment with how most practitioners see strategy formulation today; as a set of simple rules that define a portfolio of different options (see Kathleen Eisenhardt, 'Strategy as Simple Rules' http://www.dallascap.com/pdfs/StrategyasSimpleRules.pdf).

 

Principle 1. If you replace the word 'customer', should you not also replace the word 'vendor'? The two words are ontologically linked together. Looking beyond the traditional dyadic buyer-seller view, both are actors in a value network (see Elke den Ouden, 'Designing New Ecosystems: The Value Flow Model (Chapter 9 in Design United, ‘Advanced Design Methods for Successful Innovation) http://www.3tu.nl/du/en/downloads/ADM-2013-Book-screen-version.pdf).