Archives for posts with tag: VRM

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This post appeared first on Jack Myers’ MediaBizBlogger site.

1. No more “This is the year of mobile.” 2010 was the year of mobile.

2. Privacy is not dead. People might not care that much about privacy. But Washington does. Just like the banks, we weren’t able to regulate ourselves or trim at least the excesses.

3. The noise is deafening. We need more signals.

4. It’s not about what you know. It’s about what you share.

5. Location at its current state is overhyped. Future location platforms/tools are under hyped.

6. Own your own domain. Don’t buy into the notion that being on Facebook is more important than developing your own content on your own platform.

7. Most people that recommend bright, shiny objects (Groupon, Foursquare, etc.) never used the platform/tools and just hype it because everybody else hypes it.

8. Media people are just like the rest of the population: They never click on banners.

9. Quora is powerful. Explore it.

10. Getting out of the advertising echo chamber is essential to understand the future of media and marketing.

11. Ever heard of VRM? You should. It’s just a Google query away.

12. I’m an idiot. That’s a perfect place to start from. When I’m open to the fact that there’s much to be learned. That my first answer is not the right answer. And, definitely not the best one.

13. You are what you consume. That goes for food, good wine and cheap blogs. Make sure to digest only the best. It will make you a better person.

13 ½. The Dodgers suck (Well, I knew that since they never delivered a World Series since I moved to Los Angeles in 1996)

13 ¾ Travel is under-rated. I knew that, too. But I wanted to put this on the list in case I’m ever tempted to say no to a trip.

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One of the keys to being successful in the marketplace is to be findable. For many companies that translates into trying to be everywhere. It speaks to the old broadcasting mentality of filling every empty minute, space and sound wave with messages. And so companies have presences on Facebook, Twitter, YouTube, Flickr, LinkedIn, Foursquare and and and. Mostly coupled with a weak infrastructure to support all these platforms, presences and initiatives.

These unfocused efforts often lead to deserted fad islands and empty bandwagons.

It’s more valuable to each stakeholder to identify first where your audience is and will be in the future. Join them in the best way you can. Take a long, hard look at your real capacity to add value to a platform. If all you be is mediocre, stay away. Build your infrastructure first and then join your audience. Not the other way around.

Your marketing shouldn’t be run by Google and SEO lords whispering in your ear to build more and more places and links. Your marketing should be run by the desire to provide something special and valuable.

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This post was first published on Jack Myers’ MediaBizBloggers site.

Last week’s Monaco Media Forum with the theme “Mobilization” was a fascinating event filled with superstars of the media, advertising, VC and emerging technologies world. As usual with conferences of this magnitude, the most insightful conversations took place outside of the main event center.

It is pretty apparent that the advertising/media industry continues to optimize ways delivering relevant messages to people: Data warehouses, behavioral targeting, and contextual targeting – you name it. While the powerhouses of that industry shared the main stage, emerging technology providers and VC’s are starting to build new tools that focus more on the intent of people.

Advertising faces a race to the bottom: studies have shown that the least desirable customers click on ads and paying people specifically to look at advertising is likely to catch lower income people with time on their hands – not a good option for marketers. Sure, we’re getting better at delivering relevant messages to people but the success rates of our marketing efforts are fairly low and the privacy questions comes up more often. Which leads us to the question: Where are we going from here?

The Intention Economy

A more effective way of engaging with people is to build tools that engage both parties (customers and vendors) in ways that work for both. While CRM systems are very one-sided in their benefits, ask vendors to bear the burden of the whole engagement and don’t allow customers to engage on their own terms, VRM systems (Vendor Relationship Management) help customers to be equipped with tools that transform them from followers in the marketplace to leaders. Let me give you an example:

Location-based apps are the big craze in the emerging media world right now. I visit a place, check-in and the marketing tactic is to receive special offers from the place itself or competitors. The VRM idea would be different: It’s noon and I plan on going to lunch in 10 minutes. I declare my intent to restaurants within a specific radius, even specifying my budget and the size of my party. Restaurants have now the opportunity to engage with me during the next 10 minutes to send me specific offers, based on my intent. Clearly, brands have a real captive audience for a limited amount of time and don’t need to waste any advertising inventory with guesswork.

VRM used to be an intellectual framework, nothing more. The Monaco Media Forum convinced me that entrepreneurs are starting to buy into this concept and building the necessary tools to bring VRM to life. I saw apps and sites that are based on the VRM model, and I’m convinced that the end of data collection for advertisers (Foursquare, Facebook) is near. The future is bright and the future is based on intent.

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Listened to an interesting discussion last night at the Monaco Media Forum, featuring Alain Lévy, CEO of Weborama (France). Especially interesting since we tend to be too US-centric when discussing privacy issues and how data should be utilized.

A few thoughts that were discussed:

  • Alain Lévy brought up the idea of “the right to be forgotten”, a new principle for the Social Web to be able to eliminate embarrassing or questionable content associated with us. ( The 5am picture).
  • A few people brought up the idea that we need to develop a fair contract between advertisers and people, just like the implied TV contract (You enjoy this show for free and watch commercials in return).
  • Some regard the current targeting techniques as “sneaky” and not a sustainable strategy.

While I think the idea of “the right to be forgotten” is interesting, I believe it would be too complicated, too complex and implies a flawless execution. (Good luck.) As much as I was delighted to see that all of us in the media/marketing world continue to discuss privacy and control issues, I was still surprised that nobody brought up the idea that users should own their own data. And I’m starting to have the feeling, any further discussions of privacy doesn’t change the core issue.

As I wrote before, sharing your data on your own terms, having complete control of your personal data would eliminate all the demands for regulations and new rules.It seems we’re making things more complicated than they should be. The “deal” that marketers always bring up when talking about targeting, is not a deal. Nobody ever negotiated with people, we just started to assume that people are okay with it. The majority of people don’t care about targeting, even worse for brands: they don’t care about advertising because we still try to play a guessing game. All the data we collect is distilled into assumptions of people. The assumption somebody else has of my identity is not the real me. We collect more data points about a person than any data aggregation technology when we talk to them for 1 minute. Would you base your marketing spend on that one minute?

The waste in advertising dollars on false assumptions will lead to a real contract. People will share their data and intentions with brands, leading to a much more efficient and effective marketplace. We can talk about privacy, regulations and laws all day long. It won’t change the structure of our business. A mind-blowing ROI will.

More and more people are getting interested in the concept of VRM, owning and managing your data on your own terms, connecting to brands when you want it. Not when they decide to disrupt you.

During the Breakthrough Summit I met an investor into a new car site: CarWoo! The site allows potential buyers to receive competitive offers from several dealers while preserving their privacy. Using an asynchronous messaging system embedded in the CarWoo website, the buyer can engage with multiple dealers anonymously, ask questions and negotiate. Interestingly, all conversations between the parties is visible to other dealers, turning the interaction between buyers and dealers into a very competitive environment. CarWoo! claims that it will never send spam or unsolicited email to buyers, it doesn’t take any money from dealers. According to CarWoo, 3000 dealers signed up so far and 50-100 dealers are added each week.

In my opinion, CarWoo! falls short when it comes to monetization: It costs buyers $19 to get 2-3 dealers to compete for offers, for $49 3-5 dealers will compete for your business. The reason is clear: Dealers want to communicate with qualified leads, people that are serious about their purchase. This initial hurdle of $19 or $49 will weed out the window shoppers. However, this is very seller-centric.

To get qualified leads in the system costs automotive companies a lot of money and I find it curious that CarWoo! doesn’t have a way for buyers to get reimbursed for their initial investment in the site. At the minimum, CarWoo! should work with dealers to offer easy refunds for test drives or the actual purchase of the car.

As many VRM pundits said before, VRM is beneficial for buyers AND sellers. Whether people decide the service is worth the fee remains to be seen. I like the overall concept of CarWoo! and I wish them well.

Much more to come.

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Another week, another announcement by a tech giant: Facebook announces Groups and downloads. Personally, I don’t care that much about groups, it might be too late for many people to find any usefulness in this feature. I’m not interested in dividing all my Facebook friends into different categories. It’s clear what Facebook is trying to do: Going after LinkedIn and other networks that are more niche and focused. (I spare you the rant that Facebook continues to live in a bubble and not get user experience – Opt-out for groups? Are you kidding me? Just look what happened to Jason Calacanis: He was added to a NAMBLA group without his knowledge and consent. Really pathetic.)

Let’s talk about something more important: Downloads. I’ll be nice and call it a good first step in the right direction. (Some call it a PR coup.) Many, including me, have complained that users have no way of accessing their data (since they created it) and no option porting it to other sites/applications. Well, the current move doesn’t mean portability. You can download all your data in a .ZIP file and that’s about it. At least, we can access our data now. But, that’s not data portability, as some claim. It’s giving users a bread crumb when they actually need the whole loaf.

My hope is that in some garages or dorm room, engineers are finding ways to use the .ZIP file to upload the information to create real personal data stores.

Who knows? Unknowingly, Facebook might have opened a Pandora’s Box.

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My first impression: It’s still early in the game. Very early. We’re still wrapping our head around the whole concept of VRM. Since the idea was to bring together visionaries/practitioners of VRM and CRM, the discussion often reverted back to CRM and how to monetize the customer/data. Clearly, all of us have problems transitioning from the old marketing/advertising paradigm into a new world where advertising is pure demand creation, driven by the attention economy, and relationships between brands and people fall under the VRM umbrella, purely intention driven.

CRM was designed to control customers even better. VRM is an added layer to provide customers with controls. To create an ecosystem that delivers value to all parties. Value doesn’t necessarily mean monetary value. To build all these systems to get $1 off on a deal doesn’t seem worth all the effort. The value is in creating real relationships between people and brands. By collaborating and co-creating value with customers. The future of business is in creating something more valuable and meaningful than just pure shareholder value.

As Umair Haque says in his “Smart Growth Manifesto”,

21st century economies will be powered by smart growth. Not all growth is created equal. Some kinds of growth are more valuable than others. Where dumb growth is unsustainable, unfair, and brittle, smart growth is sustainable, equitable, and resilient.

Here are the four pillars of smart growth – for economies, communities, and corporations:

1. Outcomes, not income. Dumb growth is about incomes – are we richer today than we were yesterday? Smart growth is about people, and how much better or worse off they are – not merely how much junk an economy can churn out. Smart growth measures people’s outcomes – not just their incomes. Are people healthier, fitter, smarter, happier? Economics that measure financial numbers, we’ve learned the hard way, often fail to be meaningful, except to the quants among us. It is tangible human outcomes that are the arbiters of authentic value creation.

2. Connections, not transactions. Dumb growth looks at what’s flowing through the pipes of the global economy: the volume of trade. Smart growth looks at how pipes are formed, and why some pipes matter more than others: the quality of connections. It doesn’t just look at transactions at the global, regional, or national level — how much world trade has grown, for example — but looks at how local and global relationships power invention and innovation. Without Silicon Valley’s relationships powering the development of personal computing and the internet, for example, the volume of trade between Taiwan, Japan, and China, would be a fraction of what it is. Smart growth seeks to amplify connection and community — because the goal isn’t just to trade, but to co-create and collaborate.

3. People, not product. The next time you hear an old dude talking about “product”, let him know the 20th century ended a decade ago. Smart growth isn’t driven by pushing product, but by the skill, dedication, and creativity of people. What’s the difference? Everything. Globalization driven by McJobs deskilling the world, versus globalization driven by entrepreneurship, venture economies, and radical innovation. People not product means a renewed focus on labour mobility, human capital investment, labour market standards, and labour market efficiency. Smart growth isn’t powered by capital dully seeking the lowest-cost labour — but by giving labour the power to seek the capital with they can create, invent, and innovate the most.

4. Creativity, not productivity. Uh-oh: Creativity is an economic four-letter word. Why? Because it’s hard to measure, manage, and model. So economists focus on productivity instead — and the result is dumb growth. Smart growth focuses on economic creativity – because creativity is what let us know that competition is creating new value, instead of just shifting old value around. What is economic creativity? How many new industries, markets, categories, and segments an economy can consistently create. Think China’s gonna save the world? Think again: it’s economically productive, but it’s far from economically creative. Smart growth is creative — not merely productive.”

While many VRM initiatives will be driven by innovative divisions within enterprises, the real change agent will be customers. They will be the enzyme in the evolution of VRM. We have to help them understand that tools will be soon available that give them equal footing with brands, that give them power to engage with brands on their terms. That’s a powerful message. Especially in this new normal economy, people want to extract more value out of brands than just a coupon or a silly loyalty program.

And, that’s just the tip of the iceberg. If done right, VRM tools will revolutionize all aspects of our lives: health care, government, education – you name it.

From what I gathered from the workshop so far:

  • We’re close to achieve data portability
  • While Doc Searls believes VRM code should be open source, I heard some dissenters
  • The value proposition for people is still too vague to excite people outside of our bubble
  • We’re too focused on transactions. Instead, we should focus on value exchanges
  • We still have to identify the change agents within organizations. Marketing? Customer Service? (Gulp) IT?
  • How can fourth parties create stakeholder value?
  • How can VRM complement legacy VRM systems?

I don’t think anybody was expecting comprehensive answers for all these questions in a workshop. On the contrary, I hope for more questions to arise on Day 2. My goal for this workshop was not to get all the answers. My goal was not to stop questioning.

Below a few Twitter highlights from Day 1:

@jyarmis: 1995: the invention of the cookie. the end.

@missrogue When we solve problems for individuals, we actually end up solving problems for businesses in the process.

@mjayliebs Search is really the entire set of activities i perform, including talking to friends, neighbors, trusted sources,oh, and google

@nitinbadjatia User driven search (VRM search) – control over input, control over output and control over who gets to help you

@glfceo enterprises trying to predict customers intents will fail

@joeandrieu John McKean: the real challenge is the behavioral one: will individuals move from a CRM-directed world to a self-directed one?

@joshuakahn yeah, a lot of the stuff I’m hearing here is early, but actually alot farther along than I thought.

@missrogue With VRM, I have the opportunity to say, “You earn my trust and I’ll give you the key to all of my information.”

@kevinmarks Josh Weinberger: who are the best communicators in your org? your support people. Why get them off the phone to customers?

@mkrisgman Business is based on exchange of value, power, expectation, and degrees of valuation.

@mjayliebs VRM and CRM are whole lot closer to each other than people think – the gap is culture and understanding as much as principle

@DeanLand For VRM enterprise level uptake: leverage data, show benefits (aka: enable the information) create a VRM ecosystem.

@nhbaldwin vrm offers the vendor a b2b relationship, tighter personalization, with the consumer

@candres this is the confluence of intention and solicitation.

@joshuakahn cookies; designed to be low level machine ID’s, not useful for human ID’s, no matter how you bake ’em. <- Craig Burton

@jyarmis privacy is only as good as the number of people you can be confused for

Looking forward to Day 2

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I proposed a keynote entitled “Let’s kill advertising and start over.” The keynote will explore the journey beginning with CRM to Social CRM to my hope for the future: VRM.

In brief, VRM gives people the power to interact with brands on their terms. People will regain ownership of their personal data and decide themselves who they want to share this information with. This has many advantages for all stakeholders:

  • It gives companies a much better understanding of the market, reducing the waste of the current guessing game we call advertising
  • Data is not housed in silos, allows for more opportunities to interconnect systems
  • VRM is based on opt-in, improving trust between brands and people. Increasing likelihood they will be open to your message
  • It opens the market up for real competition
  • VRM is the perfect companion for the evolving prosumer.

Here are a few more thoughts about VRM: Let’s leapfrog from Social CRM to VRM and Edison, Insull and planning for the future of VRM.

VRM is a logical evolution of the inefficient seller-buyer relationship we’re experiencing each and every day.

Does a world ruled by VRM need advertising?

Yes. But we need a big reset.

The advertising industry is in an arms race with people right now. Gather as many data points as possible, hoping for more relevancy, and then let’s hunt down the target. Banner Blindness? Let’s add bigger ads to the mix. Declining Engagement Rate? Hide the close button, design the ad and page in a way that people have to engage. Declining metrics always lead to more disruption. To new ways to segment people. To annoy them more. That mindset has to go. And I don’t know many people who would cry if the disruption race would finally take its last lap.

That doesn’t mean advertising will disappear. VRM will help advertising to have a very profitable renaissance.

I love good advertising. And I can’t stand bad advertising. I’m pretty sure most people feel that way.

  • Good advertising gives me valuable input for my decision-making process. I would like to find out about new products through an entertaining commercial
  • And, if that commercial pays for a good network show, even better
  • Some ads (just look at fashion magazines) provide an emotional and cultural undertone, and change the way I feel about myself, the world and the product. Sure, it’s superficial. But true. Can you imagine seeing an Old Navy ad in Vogue? What would that do to your connection with the magazine?

To create demand for a product/service, we need good advertising. (And better marketing) But not top-down advertising driven by data silos. We need to develop new ways to advertise to people, incorporating co-creation and collaboration. By regarding people as partners and not targets. By showing respect to people (opt-in) and not as victims (opt-out).

The combination of VRM and an advertising reset is just plain exciting and offers benefits to everybody. More people need to join the conversation and discuss the implications of VRM for all stakeholders. And, that’s why I want to speak about VRM at SXSWi.

Interested? Please vote for the keynote here

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I was just reading Nicholas Carr’s “The Big Switch”, especially intrigued by the chapter discussing Edison and Insull. As a brief reminder:

Unlike many inventors, Edison didn’t just invent individual products; he created entire systems. This sets him way above lesser inventors who focused on products first before they tackled integrating these new inventions into the overall system. Edison first imagined the whole, then he built the necessary pieces, making sure they all fit together seamlessly. Edison talking about the vision of his electricity system:

“It was not only necessary that the lamps should give light and the dynamos generate current. but the lamps must be adapted to the current of the dynamos, and the dynamos must be constructed to give the character of current required by the lamps, and likewise all parts of the system must be constructed with reference to all other parts, since, in one sense, all the parts form one machine.”

To develop this system, Edison had to pursue technological breakthroughs in every major component of the system. He had to pioneer a way to produce electricity efficiently in large quantities, a way to transmit the current safely to homes and offices, a way to measure each customer’s use of the current, and finally, a way to turn the current into controllable, reliable light suitable for normal living spaces. And he had to make sure that he could sell electric light at the same price as gaslight and still turn a profit.

Despite his visionary genius, Edison couldn’t see beyond his licensing and components business. It took an employee of Edison, Samuel Insull, to perfect the economics of the technological system. What Insull understood was that utility-supplied electricity could serve a far greater range of needs than it had up to then. Electricity could become a true general purpose technology, used by businesses and homeowners to run all kinds of machines and appliances. But, for electricity and electric utilities to fulfill their destiny, the way power was produced, distributed and consumed would need to be transformed. Insull’s biggest challenge would lie in convincing industrial businesses that they should stop producing their own power and instead buy it as a service from central plants.

Which brings me to VRM.

Doc Searls just posted a few blog posts, discussing the state of VRM. Check them out here, here, here and here.

We’re in the early stages of VRM. In Edison terms, we’re about to invent indascent light. We’re still far away from developing systems and even further from integrating these systems for Fortune 500 companies, dramatically changing their business model. That leaves us with some time to think through and discuss what systems need to be developed to make this a smoother transition. Much smoother than the disruption experienced in the music and overall publishing industry.

Advertising/Marketing

According to PricewaterhouseCoopers, global ad revenue will climb to a half trillion dollar business by 2014. That’s a lot of revenue. A lot of jobs. And, even more important, deep integration into the overall fabric of our global society. What will happen to all of that when VRM takes off and becomes the dominant expression of the marketplace? What will advertising transform into? How can advertising support the VRM concept? Doc Searls states that “the amount of advertising that does nothing for customers is usually close to one hundred percent.” (I don’t agree with that statement at all. Good advertising still delivers value to people and creates demand. And always will. Unfortunately, good advertising is rare these days.) How, as a community can we bridge this gap between Doc Searls statement and the advertising industry? I’m concerned that pushing advertisers into a partisan corner might lead to obstruction and pointless territory fights. Instead, we should work collaboratively with advertisers how to make the VRM model work for each stakeholder.

It might be my own bias as a life-long marketer but I don’t believe the attitude “Marketing messes everything up” is productive and won’t get us where we want to be.

Sunk-Cost Fallacy

Rob Knight wrote brilliantly about the challenges of persuading companies happy with the current Status Quo to consider VRM as a viable concept. Larger enterprises have invested billions in CRM systems they expect to improve their ROI for decades to come. Executives have put their career on the line believing in these systems, convincing boards to spend a pretty dime. For VRM to become more than a niche concept, we need to convince Fortune 50 companies to buy into this concept. We can’t just rely on small companies with limited resources for CRM systems to create a groundswell that will force global enterprises to participate. We have to develop systems that help CRM-centric enterprises to transition into the VRM world. For many companies, Social Media was just another Second Life until the big boys (Ford, Best Buy, etc.) showed up. Doc Searls makes a good argument that VRM gives CRM systems more to relate to, and we’re not fighting a religious fight of CRM vs. VRM. Still, as we experienced with the advent of digital marketing and its challenges to be a partner on the marketing table, there are struggles ahead with people staying on the pure CRM side as long as they can. And we should be prepared for it.

Human Nature

One of the pillars of VRM is the ability of individuals to take charge of their data instead of managing them via a platform and exchanging that data for the functionality that the platform might provide. For VRM to succeed, adoption rate has to be huge. And that concerns me. We rely a lot on the willingness of individuals to participate and co-create these new systems. Let’s not forget: intelligent people post their full birth date on Facebook and check frequently on Foursquare into their own homes. My point: We can’t just rely on the individual. We have to take into account human nature which often includes laziness and carelessness. We need to invite anthropologists and behavioral psychologists into the discussion and allow them to help us in the effort. Some of this will happen organically since the VRM discussion starts to flare up more and more. But some organic planning for a more collaborative development wouldn’t hurt.

Warren Bennis once said:

“Innovation – any new idea – by definition will not be accepted at first. It takes repeated attempts, endless demonstrations, monotonous rehearsals before innovation can be accepted and internalized by an organization. This requires courageous patience.”

Right about now, we need the courageous patience of Samuel Insull.

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Image: Courtesy of 13.media.tumblr

People don’t care about “CRM” or “Social CRM”. Sales, Marketing and Customer Support departments do. People care about great customer experiences. Since Social CRM is just an extension of CRM, I’m not sure this model will be able to answer the desire of customers for better experiences.

Clearly, Social CRM is a dramatic improvement from current CRM models, adding new features, functions and characteristics to the mix. Social CRM understands the communication revolution we’re all living each and every day, and its effect on peer trust. Social CRM helps businesses also to move their sole focus away from transactions, and incorporate initiatives that improve interactions between businesses and people. At best, Social CRM will change value metrics from Customer Lifetime Value (CLV) to Customer Referral Value (CRV) – measuring how valuable people are when they tell others about their experiences with a company.

This is all nice and dandy but most of the Social CRM discussions revolve (once again) around technology implementations. Call it E2.0, Social Business, Social Business Design, Social CRM – most of these monikers describe integration of new technologies and not how the core needs of all stakeholders can be satisfied and, thereby, improving the overall performance of the enterprise.

Enterprises have to align their whole organizational model around helping people to achieve their goals.

Let’s face it, whatever you call it, all CRM systems are based on a company’s perspective of reality. You can add social as a spice or main ingredient, everything still revolves around the company. Relationships are still managed by the company, to benefit the company. We see encouraging signs where enterprises let people in to co-create and collaborate: on product development, improving company processes, solving customer service issues. It’s a good step from the old CRM model that tracked what a company assumed the customer wanted to the Social CRM model that focuses on what customers are saying they want.

The problem with Social CRM: It’s still a crapshoot

The ability of companies to do something useful with social intelligence still lags light years behind their ability to gather it. We have great technology how to gather social intelligence but no scalable processes to utilize this intelligence. And, let’s just say, we suddenly lived in a perfect world and had access to actionable insights, we tend to forget that human beings are social primates, not rational decision-making machines. The rational actor assumption is so hard to give up, and many still argue this idea to death. Humans are ruled by motivated and unmotivated biases. We apply what we want and expect to see, ignoring what we don’t expect or want to perceive. In addition, humans are motivated by effort justification. The more effort and resource humans have spent on a situation, the more likely we continue our spending, despite losses or harm. Motivated/unmotivated biases and effort justification influence how we first perceive information. There are several more factors which affect how we process our already tainted information, thus altering the way we frame situations even further. Meaning: We all make short cuts in the way we process information. We use “rules of thumb” (heuristics) to focus on necessary information to make decisions. There’s the representative heuristic, where we make a judgement call based upon how much something resembles a situation, and the availability heuristic where we base everything upon how easily we can come up with a similar example. Last but not least, we have to take into account the risky shift (the tendency of a group to be more risk acceptant than an individual) and group think, where a group’s collective voice masks and oppresses the ideas of the individual. Looking at all these factors influencing decision-making, how can we expect an incremental improvement aka Social CRM to tap into all these motivations and be anything more than a sophisticated Magic 8-ball?

The need for revolutionary change

Most of us agree: We live in revolutionary times. Consumers transformed into producers. People can easily produce and distribute content. If the story is worth telling, it will be heard. Creating large communities is no more limited to big institutions, each one of us can create communities. Some of them large, some of them small. Institutions can’t control anymore what they want us see, read or listen to; each one of us has control over our own destiny.

History should tell us that revolutionary times call for revolutionary changes, not evolutionary improvements. Case in point: East Germany. In 1989, people were fed up. They were fed up with travel restrictions and limitations in communicating with the outside world. People were out on the street demanding drastic changes. And the East German government responded incrementally: Ok, you can travel to Hungary whenever you want. But not to France. Ok, we’ll replace Honecker with another blockhead, Egon Krenz. But not with a new way of governing. A few weeks later, the Wall came down and the whole idea of East Germany disappeared forever.

Sure, nobody is protesting on the street, asking companies to let go of their stranglehold of data and customer relations. This is a much more subtle revolution. YouTube video by Facebook update, tweet by message board activity; people are building their own world, relieved from the stranglehold of MSM, people are creating their own reality. Social CRM feels like a catch-up strategy, not anything remotely revolutionary, game-changing enough.

What to do

Don’t regard Social CRM as a panacea, rather consider it as a bridge to VRM. Since VRM tools are still in development, use Social CRM for three purposes:

  1. Support: Tap into the power of social networks to improve your customer support program. Develop tools and platforms to enable people to help each other, tap into existing networks to add your expertise and syndicate your knowledge throughout the Social Web.
  2. Communities: Use current communities (especially the ones out of your brand control) to gather feedback for each division of your enterprise. Use a mix of branded communities (Passenger, Communispace, etc.) and organic communities.
  3. Listen: Create a Voice of Customer program, understanding the desires and needs of your customer base. Don’t just listen, listen actively. Be part of the conversation to fend off small issues that can turn into major fires very quickly.

Tired already? Better get an energy drink, because the real work is ahead of us.

The road to CRM

  1. Give up control already: Give people tools to manage their relationships with institutions. Don’t try to own the tools, the data, the relationship. Nobody owns a relationship. Give people as much control over the relationship as you have and personalize these tools for the needs of the individual.
  2. It’s my data: Help people to control their own data. When they want their personal information deleted, allow them to do it. Without any opt-outs or other fancy road blocks to continue a dismal relationship. Develop tools that let people selective share their own data, determine their own “Terms of Service” and ensure that the privacy debate of now turns into a people data control story.
  3. Let’s stop the guesswork: Instead wasting millions of dollars on useless advertising, help people express their demand. Lunch on my mind? Why bother firing up the Yelp application and looking for appropriate places?Instead, let people express their desire and allow brands to answer in time. No BT or CRM segmentation needed. I share with brands what I think is needed to get a good response. Period.

It’s now. Or too late.

These VRM tools are in the making. My company is working on it. Many others are developing solutions. Once they’re implemented, they will change everything: the way people deal with institutions, the way marketing and sales works, the way company spend their budgets – basically everything enterprises do.

While companies pay a lot of lip-service to customer-centricity, they still focus on themselves first and foremost. Institutions have to take off their divisional hat first, then the brand hat. Move closer to customers and understand where they are coming from. And together build tools that improve markets and add value to each stakeholders balance sheet.

“Revolution is not the uprising against preexisting order, but the setting up of a new order contradictory to the traditional one.”

Jose Ortega y Gasset.