CRM vs VRM

In a previous post, I discussed the potential power of combining social, interest, and location graphs in order to personalize marketing and shopping experiences for consumers.  Marketing companies have been trying to collect detailed information for that very purpose, a large majority of which comes from tracking people on the internet.  But their approaches stem from the one-way nature of traditional advertising.  With TV, radio, and magazines there is no opportunity to truly connect to customers, which has trained marketing companies to [covertly] collect data and segment customers into easily identifiable groups.  To a large extent, we think of this as CRM.

But what if we turned this viewpoint upside-down to accommodate for the two-way nature of social media?  The notion of marketing as conversations was the basis for the Cluetrain, an early attempt at drawing attention to the fact that customers are actually unique humans.  A more practical implementation is Project VRM, which is a reverse CRM of sorts.  Instead of vendors managing their relationships with customers, customers manage their relationships with vendors.

Your shopping experience is not really controlled by you; rather, its controlled by the retailer and advertisers.  And unfortunately, they typically don't give you a say in the matter.  Yes, they might tailor the content for "female age 25-35 interested in shoes" but that's not really the essence of you, is it?  A better approach is to the let consumers volunteer information about themselves.  And why wouldn't they if it means a better, more relevant shopping experience?  I'd gladly list out my likes and dislikes in exchange for getting rid of all those annoying cookies on my harddrive.

I really like this diagram from Beyond SocialCRM as it captures the differences between CRM and VRM.


The closest thing to VRM I can find is Buyosphere, a start-up that allows consumers to track their shopping history across many vendors, then share it appropriately.  Also, Amazon does a pretty good job allowing its customers to edit their profile, which includes everything you've ever purchased from Amazon.  You can mark items as gifts, or explicitly exclude them from their recommendation engine.  This is a win-win for both the consumer and retailer.

So here is my plea to retailers: Instead of trying to infer my interests from snapshots of my day, please just ask me.  We'll both have a better experience in the long-run.

Comments:

This is a great idea. Shows the other side of the coin and gives customers control over what they want.

Posted by guest on June 29, 2011 at 03:26 AM CDT #

Thank you for posting this. I hadn't heard the term "VRM" but it makes perfect sense. I've long complained about the ineffectiveness of current marketing models. I've even spoken directly to our customers about why their emails and flyers and coupons, etc. don't work for me... because none of it is what I really want! Let me, the consumer, tell you what I'm interested in. I'll market to me for you and save you time and money while simultaneously increasing the likelihood that I'll pay attention to you in the future.

Posted by Alexander on June 29, 2011 at 06:33 AM CDT #

Thanks for pointing to this important future of commerce and thanks even moreso for pointing to us! I've been part of Doc's VRM community since 2007 and trying to get the word out about the reverse in signals since then. We're still pretty early in our product (that data can't do much yet), but are totally on board with your vision.

Posted by Tara Hunt on June 30, 2011 at 02:53 AM CDT #

Really good incite..and i too heard @ VRM first time..but David has explained the real truth..

Thanks for the post..

Posted by guest on July 14, 2011 at 12:27 AM CDT #

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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