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CRM, CMR or VRM

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The acronym galore notwithstanding, the indefatiguable David Tebbutt has come across CMR (customer managed relationships):

twitter_tebbo_cmr.png

My immediate reaction was, hey, that’s a better way of naming something that is meant to give control to a customer. CMR started from the same position as VRM, which is flipping CRM:

Who invented the term “Customer Relationship Management” or “CRM”? Who cares I hear you mutter in response. Well for those of you who think you invented the term it probably matters. For those of you trying to make CRM work you might like to get hold of and strangle them!!

I second that motion!

Just imagine if all the marketing spend that went into getting CRM onto the board’s agenda had gone into CMR instead. For those of you who believe in neurolinguistics (i.e. something along the lines of “the words you use show what you are thinking”) using the term CMR would mean that the board actually thought the customer was in control, that the customer managed the relationship.

But what is Customer Managed Relationship? CRM Today article explains:

CMR is three things:

  1. An ability to rethink, to reshape your organisation and its knowledge so that it is at the disposal of your customers
  2. Internet enabled management tools which customers use to get what they want
  3. An ability to react to the information being generated and used by customers in order to increase profitability

So far, so good. And the benefits?

If executed well CMR generates three major benefits over CRM:

  1. It is easier to implement because the customer is doing the complex stuff
  2. It creates lock in since customers having invested their data with you will not move easily
  3. It allows you to move faster than your competitor since you are in a trusted relationship with your customer

This seems at least halfway to what VRM is trying to achieve. The benefits are spelled out only from the vendor side, given the audience of the article not surprising and there are examples of how a customer would benefit from having his tax done via a CMR system. It also gets the ‘why not outsource data management to customers’ bit right, again from the company perspective.

The catch is in the benefit no. 2:

“It creates lock in since customers having invested their data with you will not move easily.”

One of the VRM principles is that a free customer is more valuable than a captive one (scroll down to the bottom of the page. Alas, Project VRM site is down so can’t link directly. Will remedy as soon as back up again). So it seems that CMR hasn’t really moved from lock-in as the holy grail of customer management and retention. Be that as it may, so far, I’d give CMR from vendor perspective 8 out of 10, from customer perspective 5 out of 10, for the insistence on customers owning their data:

… customers should own their own information including their profile, transaction history, and any inferred information such as marital history and even behavior.

Two further issues leap out.

  • It’s all on vendors’ side and as a customer I am not meant to be independent of them.
  • There is no incentive for companies to implement and change the balance of power. They may want the benefit of data management and its complexity ‘outsourced’ to the customer but giving up any control goes against most companies instincts and systems.

The first is where CMR differs VRM at the first glance already, the second is often raised about VRM as a criticism.

And now for the vision:

I’m now living in a CMR world. I have tools with which to manage the big picture of my finances. I get best offers all the time. If service levels are not good I get to know before I buy by asking other customers of the companies concerned. These financial services companies are now wholesalers or manufacturers or advisors. The whole clearing system is a subset of this system. Banks do not do that anymore. Of course I need some cash sometimes but that’s getting rarer because my PFA (personal financial assistant – Laura) can’t track it for me, so I have to enter stuff manually. That will never die out though since lots of people still want anonymity for many things. Financial service always was an oxymoron!

I must say, this sounds awfully like most of the VRM ideas I hear from people hanging around the project, namely, various matching services, automation or aggregation, platforms for customers communicating with other customers, clearlng systems etc. They usually set off my lock-in detectors fast but this gets my warning alarm blaring full blast:

The system networks all the relevant knowledge, process and contact I need. It is regulated and government backed. For the moment government owned. They’ve made more money out of online tax collection and the equity value they have in than the national lottery and the G3 licenses put together.

The hardest part they had to play was to persuade all the vested interests to set up the new system and to select smart, sharp operators who could build and operate such a scaled up system in the new technologies.

Apart from the glaring ‘government-owned’ issue, there is another major problem I have with this approach, and with many other VRM implementations. It is the assumption, explict or implicit, that the individual-customer-user has to be provided for. And that this can or should be done by a third party service, system or platform. And that in order for us as individuals to be able to do anything sensible and useful with our data, or in order to be secure, or private or whatever else we might want, we have to turn to the ’supply side’. And finally, among those subscribing VRM vision, the assumption that solutions will come from the vendor side or that vendors will have to be sold on this first, in order to reach users and make VRM happen.

I see this assumption not only around CMR or VRM but everywhere other than the social or live web. It is a place where the demand side can and often is supplying itself, where ‘users’ can and often become ‘creators’, audience have become distributors, and intermediaries are melting away in decentralised networks and direct connections of all kinds. Alas, even on the web, it’s not all P2P roses. My online existence gets scattered across many platforms, google, wordpress, flickr, dopplr, twitter, and many more.

fractured_identity_sml.jpg

I have reached the limits of usefulness for apps that give me nice functionality but take away my ability to manage data across my entire ‘identity’. As I said elsewhere, the collection of tools should be clustered around the user, not around platforms or applications. It all starts with the individual. And as an individual user, I want a range of applications to manage my data, metadata, identity etc so I, and hopefully other similarly motivated users, can get on with learning how to control and manage our ‘identity’.

Individuals with independent tools, networked and informed, will be able to capture and manage information about themselves and about vendors. Once people can do that – manage their data, relationships, identities, purchase histories, their records, locations and god knows what – then more cool things will start to happen. And it will be those cool things that will ultimately determine the direction vendors should be looking.

To sum up, the article on CMR hits a few of the targets VRM is aiming at too. It calls for giving greater control to customers over their data as well as proposes that businesses arrange themselves better around customer needs. In order to achieve this laudable goal, it looks to businesses for solutions and implementation, assuming third party providers, intermediaries and closed proprietary platforms to build the CMR world. There is nothing about individuals’ sovereignty over data rather than access to it, no room for user-driven tools, only managed on my user’s behalf or user-centric at best, or user’s privacy and security policy.

One of the fundamental building blocks of VRM is the ability of individual users to take charge of their data instead of managing them via a platform and ‘trading’ that data for the functionality that the platform might provide. Once I have it in my hands, I can manage, analyse and whatever else I wish to do with them, applying various functionality directly*. And share and interact with others in ways richer than platforms currently allow. It might be messier to start with but closer to human affairs in its complexity. And that is a Good Thing.

I want to be able to connect and create relationships without lock-ins (other than the ones that some relationships bring with them naturally :) ). I don’t believe I will be able to do that unless the tools are built around me, for me and eventually by me. Blogging took off when people could set up a page and start publishing in a way previously available only to geeks with HTML skillz. Today I can do more things with my blog than just publish – tag, add videos, plug-in more functionality etc. with the underlying technology invisible to me now. So I want tools and applications that will help me do all that for transactions as well as relationships. Eventually.

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* My contribution to this aim is the Mine! project set up to equip individuals with tools to take charge of their data (content, relationships, transactions, knowledge), arrange (analyse, manipulate, combine, mash-up) them according to their needs and preferences and share them on their own terms whilst connected and networked on the web.

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4 Responses to “CRM, CMR or VRM”


  1. alan p
    on Jan 15th, 2009
    @ 0:12 am

    Adriana, I suspect as this area develops there will be a number of differing approaches explored, all differing in flavour.

    VRM is one way of approaching it (and even there, as you note, there are different ways to execute) and is probably the “purest” from the user pov – but I suspect there will also be hybrids.

    Also, don’t underestimate the “I wouldn’t start from here” issue! VRM may be the endgame, but it may be that an interim solution is needed to move the vendor from their current positions.


  2. Adriana
    on Jan 15th, 2009
    @ 0:27 am

    Alan, I have to disagree. There is nothing ‘purist’ in my insistence on starting from the individual – and though I may have noted different approaches to execution, I never said I agree with them!

    My approach is based on practical considerations, experience of the web and observation of how online phenomena spread.. as the most likely way of getting to the result I envisage.

    To me VRM is not the endgame… it’s a starting point. And I believe it will lead to a blind alley, if it doesn’t start from the individual.


  3. Quote of the day | Tomas Kohl
    on Jan 15th, 2009
    @ 15:11 pm

    [...] Quote of the day I have reached the limits of usefulness for apps that give me nice functionality but take away my ability to manage data across my entire ‘identity’.” – Adriana Lukas [...]


  4. social crm: quando il crm diventa social | socialmediamarketing | e-xtrategy
    on Feb 8th, 2012
    @ 15:15 pm

    [...] che il dialogo con gli utenti e i consumatori e la gestione del loro benessere e delle loro aspettative passa sempre più spesso per il web [...]

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