Vendor Relationship Management (VRM) is listed under “Buzzwords” in Wikipedia, but it’s a new approach to customer engagement which businesses can’t afford to ignore. VRM principles aim to turn marketing on its head, moving from “targeting” or “acquiring” a customer, to recognising that the customer, as the buyer, is the real powerbroker in the relationship and should be treated accordingly.
By putting the customer in charge of the relationship, we’re no longer pretending we know when they want to buy a house, or eat more fibre, or open a new bank account. Businesses will act as enablers to prospects and customers, opening up doorways and providing them with the tools to interact with them on their terms.
VRM development work is based on the belief that free customers are more valuable than captive ones — to themselves, to vendors and to the larger economy. To be free,
1. Customers must enter relationships with vendors as independent actors.
2. Customers must be the points of integration for their own data.
3. Customers must have control of data they generate and gather. This means they must be able to share data selectively and voluntarily.
4. Customers must be able to assert their own terms of engagement.
5. Customers must be free to express their demands and intentions outside of any one company's control. (Source: http://cyber.law.harvard.edu/projectvrm/Main_Page)
It’s most definitely not about “big data” - huge amounts of data randomly generated by people going about their daily lives (often generated under the misnomer of the “loyalty program”). It’s about small data, data generated by people voluntarily interacting with businesses and brands - electing to redeem a coupon or voucher; putting their hands up to receive information or view content; telling you their preferences in order that you can communicate with them more effectively...enabling them to access, manage use and update their own data across organisations, markets and borders. Which in turn enables customers and businesses to create the customer experience together.
Have a look at Floodwatch, http://floodwatch.o-c-r.org for an example of how people are working to take back individuals’ data…… “You are not your browser history!”
Mobile technology, connectivity and personal clouds will be the big drivers of VRM over the next few years. 90% of consumers already use their phones for pre-shopping activities, even just the basics of hours of business and location (and we’ve seen what that’s done to the core Yellow Pages business).
- So to avoid your own marketing dinosaur moment, ask yourself these questions:
- Am I where my customer needs me to be? Wherever they are?
- How can I help put my customer in charge of our relationship?
- How can I ally with other organisations to enrich my relationship with my customer?
- When a customer experiences a significant event or turning point in their lives, and reaches out to me, do I have all my resources, networks and people in place to solve their problems and address their needs? Or is my business still organised by product or brand or comms channel?
And by answering them, just think, you’ll be taking the CRM monkey off your back, not to mention your customer’s.
If you are interested in speaking to a consultant about Vendor Relationship Management, and how you can incorporate it in your business, please contact us.