Conversations around VRM often include impassioned demands for more customer control. We live in an increasingly decentralized world with more customer choice, yet vendors continue to fiercely collect and control customer data and exploit the opportunities therein. It is no surprise that VRM can serve as a rallying cry of sorts for frustrated customers wanting to take back control from vendor lock-in, offensive communications, and privacy and security concerns in a world of mishandled personal data.
However, rooting the VRM opportunity in us vs. them, emotionally-driven arguments is an unlikely way to pave a path towards better relationships between customers and vendors, and I believe better relationships is ultimately the goal of VRM. The more I learn about VRM, the more I hear about the importance of benefits for both the buyer and the seller.
The big question that remains then is, how is VRM good for business? As we consider and construct tools that put the customer in control of their data, how will existing businesses be convinced this is a good thing? And what opportunities are in store for new businesses that can leverage VRM models? In short, how will companies make (more) money in a VRM world?
Here are some initial thoughts. I look forward to fleshing this out if others have input.
Customers share the burden of storing and protecting the data
Vendors face growing privacy concerns from consumers, liability for breaches in security, increased compliance and awareness around the risks of data sharing, and just the plain old cost of data storage and management. Might there be an opportunity to reduce the risks and costs for certain businesses by offloading responsibility to consumers in exchange for their increased control? I suspect there are certain businesses, such as those in the healthcare industry, whose costs here are significant and may benefit from a fresh approach.
New opportunities for vendors who are unwilling or unable to benefit from CRM
Implementing CRM systems and making them useful can be expensive and time-consuming. CRM is a particularly difficult sell for new, small businesses that don’t yet have significant value tied up in their customer data or the capability to extract value from it. Additionally, the increasing prevalence of niche businesses in a long-tail marketplace suggests many vendors might be less interested in the benefits of mainstream marketing methods deployed through CRM. Instead, ideas like the personal RFP showcase the value of customer data that is not centrally managed by one-size-fits-all vendors. There are likely many unexplored opportunities here with the potential to reduce costs and create new opportunity for vendors while increasing choice and control for customers.
Increased access to information about customers
In a world where customers might extend access to their own data, there can be direct benefits to the customer to share more data rather than less. For example, customers may share information around the nuances of their needs and wants. With the ability to enforce anonymity and protection from solicitation, it is likely the customer might be willing to share even more about themselves (e.g. information about purchases across multiple vendors). Customers might share more because they know that this information could result in not only the resolution of a specific request, but also overall increased choice, improved products and services, and more efficiency in the overall marketplace.
Implied in all this data sharing is the possibility for vendors to access more information, learn more about shifting demand, and respond more effectively in the market. It becomes less about who can control the customer, and more about who can respond better to customer demand with better products and services. In this universe, everyone that brings real value to the table wins.
New opportunities for those who can leverage customer-controlled data to create value
Perhaps the most valuable area for opportunity is in unexplored, new services that stem directly from previously unavailable access to customer data. Opportunities exist for leveraging customer data to create entirely new types of value that go beyond mere adjustments to existing products and services. Imagine, for example, if individually-managed medical data was made available in support of massive research initiatives. Additionally, sharing personal data could provide specific value back to the individual. For example, what’s my increased risk to specific ailments based on my medical history as mapped to that of my family, my neighbors, and the world?
Vendors treat their customers like cattle and blast us with unwelcome messaging because it’s what they know how to do and frankly, it works. It’s unlikely that many vendors will stop this practice. But it’s also unlikely they will adopt new ways of relating to customers unless we provide them with methods that reduce cost and increase opportunity while satisfying the customer’s need for greater control.