Fresh from the Gartner Customer 360 Summit in Los Angeles, the message was clear: 'social' is here and it's not just about connecting with friends and old classmates, it's permeating the Enterprise and transforming how business is done. With people spending 22% of their time online in social networks, progressive companies are augmenting their existing CRM tools and processes to engage customers in blogs, forums, wikis and public social networks like Twitter.
With growing 'customer power' the balance is shifting from marketing-led sales to a more consumer-driven dynamic and while Gartner's story ended at SocialCRM, a few of the analysts hinted at what may be next, and that's what I'll be looking at today.
Companies that build deeper relationships with their customers will have greater insight into their context and needs and will be better able to deliver the 'delight' that will be critical to competitiveness in the coming years. But, relationships need at least two parties. With CRM and even SocialCRM the focus is on the vendor's side of the 'conversation'. As social networks increase customer power, solutions in a new Vendor Relationship Management (VRM) category are emerging to complement and disrupt the current market dynamics. Let's take a look...
CRM is born - Collecting customer data
SocialCRM - Engaging customers
With Facebook at 500m users, it's clear that a growing number of customers, and potential customers, are spending more of their time in social networks - publicly declaring their interests, opinions and connections. Looking to engage their customers more deeply, companies are starting to deploy SocialCRM solutions to monitor social network interactions and enable collaboration within the Enterprise to respond coherently and consistently.
SocialCRM provides companies with the 'ears' to listen, but that's just one side of a conversation. What of the wealth of private information requiring customer consent to access? As the recent Facebook privacy debacle showed, people are becoming aware that their personal information is valuable and they want to protect it, ultimately they'll expect to use it for their own benefit! As Jeff Chester of the Center for Digital Democracy said, "Everybody is making money off consumer data, but the consumer."
VRM - Building scalable trust-based relationships
VRM, a concept pioneered by Doc Searls of Harvard's Berkman Center for Internet & Society and co-author of the 'Cluetrain Manifesto', proposes a new category of tools which enable individuals to get value from their personal information and to manage their relationships with companies. VRM complements CRM and SocialCRM by enabling the 'voice' of the customer to be communicated directly to company's 'ears'. With a CRM and VRM infrastructure in place, we have a platform for dialogue, and ultimately a context for building scalable trust-based relationships. While VRM doesn't (yet) exist as a category in the same way as CRM or SocialCRM, we're starting to see examples of VRM dynamics:
- Bynamite - Gives people a way to control the information advertisers see about you.
- Needium - Giving businesses a way of tapping into customer needs.
- Foursquare and Starbucks - People are sharing their location with businesses in the form of 'checkins', and 'mayors' are rewarded with discounts.
- Mint - Enabling people to aggregate their personal financial data and to get detailed product recommendations (acquired by Intuit 2009)
- RedBeacon - Enables people to create 'personal RFP's' to find local service providers (Winner TechCrunch50 2009).
Ultimately, CRM relies upon internal silos of data, SocialCRM relies upon public information on social networks. Deep customer context, requires customer control and consent - that's VRM. CRM, SocialCRM and VRM together enable customers and businesses to converse, relate and ultimately transact more efficiently. A win-win for all participants.