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The topics discussed here grow out of the bread-and-butter issues that confront my consulting and software clients on a daily basis. We'll talk about prosaic stuff like Membership Management, Meetings and Events Management and Fundraising, broader ideas like security and software project management, and the social, cultural, and organizational issues that impact IT decision-making.

Tuesday, January 29, 2008

VRM: CRM's flip side

Every non-profit now talks about needing to improve their CRM. But thanks to a post by Jay Deragon, I've been doing some reading this week about the emerging concept of VRM, or Vendor Relationship Management -- If CRM refers to software-based tools for organizations to manage their relationships with customers, constituents, and supporters, VRM is the complimentary set of tools, helping those individuals to manage their relationships with companies, organizations, and communities. The idea is appealing - but its actual application still seems quite hazy.

The center of the VRM hub-bub seems to be Project VRM at Harvards' Berkman Center for Internet and Society. Their wiki states that
CRM systems until now have borne the full burden of relating with customers. VRM will provide customers with the means to bear some of that weight, and to help make markets work for both vendors and customers — in ways that don't require the former to "lock in" the latter.

The goal of VRM is to improve the relationship between Demand and Supply by providing new and better ways for the former to relate to the latter. In a larger sense, VRM immodestly intends to improve markets and their mechanisms by equipping customers to be independent leaders and not just captive followers in their relationships with vendors and other parties on the supply side of the marketplace.
Any system that will allow particpation of both vendors and customers (or donors and fundraisers, or politicians and supporters...) starts to point toward the more collaborative environments that are being termed "social media" these days. And indeed, we find VRM being discussed on sites like "The Social Customer" blog by Christopher Carfi, which is trying to evolve models of customer service and marketing that assume a more empowered and participatory customer base.

We are all both customers and vendors. But what does a VRM/CRM collaboration look like? This still seems an open question. I'm not yet seeing anything much more concrete than Carfi's call for "a robust way for customers to manage their own online identities without getting trapped in any vendor's silo. " CRM systems today are offering concrete Return on Investment to their users. The VRM conversation needs to focus on how to provide concrete measurable benefits for customers if this paradigm is gain traction.

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Comments on "VRM: CRM's flip side"

 

OpenID ccarfi said ... (January 31, 2008 at 12:10 PM) : 

hi, michael. thanks for your interest in VRM. yes, things are VERY much at the nascent stage right now. we've just identified five initiatives to keep the momentum VRM going:

1. Define and advocate a clear vision for a VRM world
2. Ensure the Development and publishing of open standards and specifications for VRM services
3. Create a lightweight and effective organisational structure
4. Drive VRM usage
5. Create and oversee VRM compliance program

there's more info on all of these areas on the projectvrm home page.

did want to take some issue with the blanket statement of "CRM systems today are offering concrete Return on Investment to their users."

although "CRM" is oftentimes thought of as "the technology" or "the system," folks like paul greenberg define it much more strategically, as such: "CRM is a philosophy and a business strategy, supported by a system and a technology, designed to improve human interactions in a business environment."

(paul's site is here, btw: http://the56group.typepad.com/ )

when CRM is thought of as a "system," projects seem to fail to generate ROI as often as not. do a quick google search on "crm fail" for a good survey of the various research bits from the past few years on why a lot of CRM projects don't get the elusive ROI. and, to note, even when there IS ROI, it's skewed nearly 100% to the vendor's side -- it's both funny and tragic that the _customer_ rarely benefits from a CRM system, IMHO...

great post. nice to (virtually) meet you!

-cfc

 

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