VRM Workshop Trip Report

My brain is full.  It needs to digest.

Hopefully, some of you were able to check out the stream of the first ProjectVRM Workshop (#vrm08) that just wrapped up at Berkman.  Over 40 folks attended in person, and the overall vibe was at the intersection of "wow, this is great, needed stuff" and "ok…let’s get going!"

Yesterday started with a few introductory remarks by Doc Searls and Phil Malone (of the Berkman Center and Harvard Law School), and a technology review by Joe Andrieu.  The group then switched into unconference mode and self-organized and created its own agenda (thanks to Kaliya Hamlin for the process facilitation).  We had four concurrent tracks running during the day, and the Day 1 topics were:

  • Open Social: Social Infrastructure for the Web and How to Map to VRM
  • VRM and Public Media
  • Volunteered (Premium) Personal Information
  • VRM Adoption Ambassadors: How to Talk to Big Companies Trying to Understand VRM
  • VRM and Healthcare: Is Medical Home a Stepping Stone to VRM?
  • Trust Services as VRM Foundation
  • VRM Organizational Issues
  • GRM: Government Relationship Management
  • Information Portability: The Enemy of Good is Better (OAuth, OpenID)
  • Intra-Enterprise VRM
  • VRM and Enterprises: Customer v. Vendor and Partner v. Vendor
  • Using VRM as a Personal Address Manager
  • Employability and Recrtuitment
  • Relationship Networks and the Mine!

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(Like any great event, there were personal tradeoffs to be made, with multiple "dammit, I want to go to BOTH of these!" moments occurring.)

Day 2 continued right where Day 1 left off, with:

  • VRM Compliance
  • R-Cards (Relationship Cards): The Devil is in the Details
  • VRM as Disruptive Innovation: Vendor Adoption and Best-Fit Markets
  • Interactive Community Future Mapping
  • VRM and Charity
  • Customer-Driven Markets
  • RelButton and the Media
  • Product Representation
  • RelButton Standards Track
  • User-Driven Search

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I facilited two of the conversations, "Intra-Enterprise VRM" on Day 1 and "Customer-Driven Markets" on Day 2.

The Intra-Enterprise VRM session was one that was triggered by a passage from the book Reinventing the Bazaar by John McMillan.  In the book (p. 168), there was a section that gave me pause:

"Herbert Simon, economics Nobel laureate and polymath, offered a fable to illustrate how much of a modern economy is ruled not by markets, but by organizations.  Simon imagined a visitor from Mars who "approaches the Earth from space, equipped with a telescope that reveals social structures."  In the Martian’s telescope, firms show as solid green areas, while market transactions show as red lines, so the economy shows as a spider’s web of red lines and green areas.  Most transactions occur within firms, so organizations make up most of the landscape the Martian sees.  If it sent a message back home describing the scene, our Martian would not describe it as "a network of red lines connecting green spots," but as "large green areas interconnected by red lines."

This was one of those "ah-hah" moments.  Up until yesterday, every conversation I’d either heard or had regarding VRM focused solely across the customer-vendor interface; that is, the conversations focused on cases where each party was part of a different organization.  But if Simon’s Martian-with-a-nifty-telescope fable is true, of :course: most parties who interact with each other are within the same organizational entity! 

The key things that came out of the ensuing conversation were the following:

  • A leading opportunity for VRM within the enterprise is around the idea of a "personal data store" for one’s resume/CV, skills and past experience.
  • VRM could be used to enable internal "innovation markets"
  • Customer-driven production processes (e.g. kanban) are, some ways, reminiscent of VRM
  • Agreements such as SLAs (Service Level Agreements) or OLAs (Operation Level Agreements) are also reminiscent of VRM

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It was the first item, a personal data store for one’s CV that precipitated the most conversation within this particular breakout group.  The rap went like this…each individual, when starting with an organization, would be provisioned a "personal data store" on the network, along with provisioning of the normal first-day-of-work provisioning of phone number, desk, office supplies, company email address, and the like.  That personal data store would be the repository of one’s experience within the organization — projects that were attempted, their results, any quantifiable objectives that were tracked along the way, etc.  In enabling (and encouraging!) each individual to keep her CV up-to-date in this manner, both the employer and the employee reap benefits. 

The employee reaps benefits in a number of ways.  First, the personal data store is portable; that is, she can export all her information at any time.  So, if she were to leave the organization, she’d have her own personal record of her accomplishments, skills and experiences already up-to-date when getting ready to search for new opportunities in the market place.  Similarly, someone who took the effort to clearly publish her skills via her personal data store within the organization would be more likely to be able to be matched with projects or divisions within the organization that could benefit from her skills.  (N.b. The converse is also true.  You don’t keep yours up to date, you have less of a chance of getting on a cool project.)  Similarly, depending on how often the CV was updated, it may even have the potential to reduce (or eliminate) the need for tedious bulk status reporting — it’s already in there!  All management needs to do is run a report for the updates to the CVs of individuals within a division or on a project to know what the latest-and-greatest was.

The organization benefits as well.  Now, there is a clear way to look across the individuals in the organization, and know what skills are where they should be, what ones are available for an upcoming project, and what ones are perhaps ready for an opportunity for new, relevant challenges.

The second area we talked a bit about was the opportunity to use VRM as the infrastructure of an internal "innovation market."  An example was given as follows:  an engineer working on a project has hit a thorny problem that he can’t seem to solve.  So, instead of banging his head against the wall further for one more day, he instead creates an internal "RFP" (Request for Proposal) that describes the problem that needs to be solve.  The engineer then releases that RFP to an internal marketplace, where others with the skills, interest, time or insight to solve the problem would propose various solutions to the problem.  Additionally, those within the organization who responded to the RFP with a viable solution would also be eligible to partake in a portion of the benefits that accrued to the organization as a direct result of the innovation.

Despite the length of this post, it really only scratches the surface of what was discovered and discussed throughout the workshop.  However, my plane is landing soon back at SFO, so this one’s a wrap.  Check out more coverage of the conference at http://cyber.law.harvard.edu/projectvrm/VRM_Workshop or on Twitter tag #vrm08.

Another post soon summing up Day 2, with a special focus on the idea of Customer-Driven Markets.  Seeya soon.

The Principles of VRM

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Doc did a foundation-setting presentation yesterday at #vrm08, and clearly laid out the key principles of VRM in an easy-to-grok format. 

  1. VRM provides tools for customers to manage relationships with vendors. These tools are personal. They can also be social, but they are personal first.
  2. VRM tools are are customer tools. They are driven
    by the customer, and not under vendor control. Nor to they work only
    inside any one vendor’s exclusive relationship environment.
  3. VRM tools relate. This means they engage vendors’ systems (e.g. CRM) in ways that work for both sides.
  4. VRM tools support transaction and conversation as well as relationship.
  5. With VRM, customers are the central “points of integration” for their own data.
  6. With VRM, customers control their own data. They control the data they share, and the terms on which that data is shared.
  7. With VRM, customers can assert many things. Among these are requests for products or services, preferences, memberships, transaction histories and terms of service.
  8. There is no limit on the variety of data and data types customers can hold — and choose to share with vendors and others on grounds that the customer controls.
  9. VRM turns the customer, and productive customer-vendor relationships, into platforms for many kinds of businesses.
  10. VRM is based on open standards, open APIs and open code. This will support a rising tide of activity that will lift an infinite variety of business boats, and other social goods.

These principles have a number of implications.  These are:

  • A free customer is more valuable than a captive one
  • Markets won’t be free until customers are free
  • VRM tools are personal tools — they benefit the individual first
  • VRM tools provide individuals with ways to manage relationships
  • The individual is the central point of integration

There are more; here’s the video (for the folks reading on RSS).  The video is also embedded below.  Take a look.

(Thanks to Tom Guarriello for shooting this!)

Rubber, Meet Road

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Have just arrived in Boston (Cambridge, actually) for the first VRM (Vendor Relationship Management) workshop, which runs July 14-15, 2008.  ProjectVRM is under the auspices of the Berkman Center at Harvard, and is a project being spearheaded by Doc Searls as an effort that will enable customers and vendors to engage in more mutually beneficial relationships.

The workshop is a coming-out party of sorts, as it is the first dedicated get-together of the people around the world who have been working on not only defining VRM, but beginning to make it a reality.  Up until now, all the VRM get-togethers were grafted on to other (important and complementary) activities like the Internet Identity Workshop.  This meeting is VRM’s passage into toddlerhood and first steps.  (Too soon, it’ll be asking to borrow the car, I’m sure.)

There are a few things in particular that I personally am hoping to help drive forward over the next couple of days.  The first is to nail down a solid working model of what it means for something to be able to call itself "VRM."  This project has some legs, and without the above, there will be a surfeit of products and/or services coming into the market that will attempt to connect themselves with the effort.  That’s fine, but there needs to be a standard and unambiguous way of separating the wheat from the chaff, and separating the architecture from the marketecture.

The next goal related to code.  Over the next couple of days, I want to both learn about and, more importantly, determine the best ways we can contribute to the code that’s going to need to be created to enable VRM.  What will this code do?  It will enable us, as individuals, to be have increased control of our digital information, and independence regarding its use (rather than having every bit of our digital identity strewn about the tens or hundreds of vendor silos in which it currently lives, which is the current state-of-practice, unfortunately).

There are a number of instances where effort is starting to pay off.  A couple of examples:

Also, some great thinking here from Alan Mitchell: "Is VRM a Phenomenon?"

This group is going to get a lot of work done over the next couple of days.  Looking forward to rolling up the sleeves and digging in.

The New TypePad iPhone App

Sitting at SFO waiting for my flight to Boston, so decided to test out the new Iphone app for posting to TypePad, after reading about same from Christopher Allen.

Later: Posting is ok, but the app did some funky things with the image it uploaded.  I had to do an after-the-fact cleanup and move the image over the right, etc.  Looks like the app is ok for quick-hit posts, but would be challenging for longer-form things.  Also, couldn’t figure out how to put in links from the app, so added the link to ChristopherA up there manually.

Big Discount ($250) for Friends of Cerado

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Our friend and WOM guru Andy Sernovitz is hosting a small-group word
of mouth marketing seminar. Usually he only does private training for
companies at a very large price, so this is a rare chance for 50 people
to get the best introduction to word of mouth that there is.

We’ve arranged for a $250 discount for our clients and friends. Use code "welovecerado" when you register.

This is a very practical, hands-on course. Here’s what’s happening:

  • Master the five steps of word of mouth marketing
  • Construct an action plan that your company can start using the very next day
  • Get the same training that big corporations (Microsoft, TiVo, eBay) have received — for a fraction of what they paid
  • Know how to translate word of mouth marketing into real ROI
  • Participate in an active, intense day of practical brainstorming (not boring theory)
  • Learn from Andy Sernovitz, the guy who literally wrote the book on word of mouth marketing

Andy promises you will learn a repeatable, proven marketing
framework that is easy to execute, affordable, and provides measurable
results within 60 days.  Besides, he’s a great guy.  And it’s in Chicago.  (If you’re going and you’re not from Chicago, drop me a note…there are a bunch of killer places for food and fun that are off the beaten tourist path that I can point you toward.)

More information: http://events.gaspedal.com

Word of Mouth, Chicago: July 30 and September 4

NetPromoter and Customer Recommendations: Is It Really The “Ultimate Question?”


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  Originally uploaded by Leo Reynolds.

The May 2008 issue of Fortune Small Business contained a breathless article on the "Net Promoter Score," which is defined thusly in the article:

"First, ask you customers to rate you on a scale of 0 to 10 based on the question ‘How likely is it that you would recommend this company to a friend or colleague?’  Then sort the responses into three groups: promoters (9’s and 10’s), passives (7’s and 8’s), and detractors (0’s through 6’s).  The percentage of promoters minus the percentage of detractors equals your score.  A company with 75% promoters and 15% detractors, for example, would have an NPS of 60."

Net Promoter Score (NPS) was vaulted into the mainstream in a 2006 book entitled "The Ultimate Question" by former Bain & Co. partner Fred Reichheld.

Is NPS a panacea?  The data is mixed.  On one hand, Fortune reports that "the average US company has an NPS of about 15" and telecom/cable companies are "real dogs" with an NPS of -4…yes, NEGATIVE four.  So from that perspective, things seem to synch with conventional wisdom (and personal experience).  On the other hand, much question has been given to the statistical validity of NPS.

In particular, a heated conversation thread hosted by the Journal of Marketing notes the following:

"1) We did not find Net Promoter to be a good predictor of growth at all
when attempting to replicate Reichheld’s methodology. We find this
quite strange given the overwhelming evidence Reichheld reports
regarding Net Promoter’s linkage to growth.


2) The most troubling finding from our research, however, is that we
found very strong evidence of research bias in the research reported by
Reichheld in support of Net Promoter. In particular, we were able to
replicate a subset of Reichheld’s reported data for his best case
scenarios and compare it to a metric he claimed was examined and found
to have a 0.00 correlation to growth, the ACSI. Our findings clearly
show that when using Reichheld’s own data, Net Promoter wasn’t superior
to the ACSI. It is virtually impossible to imagine a scenario other
than research bias as the cause of this finding.


This is a VERY SERIOUS problem."

Going back to the Fortune article, they interviewed 20 companies, all of which had positive things to say about NPS, with key note given to its simplicity and ability to highlight particular customer issues.

But I’d be very interested in hearing from you.  What have been your (or your organization’s) experience with Net Promoter.  Best thing since sliced bread, snake oil, or a mixed bag?  Or, put another way:

"How likely is it that you would recommend the metric of Net Promoter Score to a friend or colleague?"

Thoughts?

Get Your WOM On


  Andy Sernovitz LEGO Cufflinks 
  Originally uploaded by christophercarfi.

My friend Andy Sernovitz is doing a relatively rare public talk about word-of-mouth marketing (he usually does private, invite-only gigs).  He’ll be speaking at the AMA on June 26th.  Here are the details on the AMA talk.

There’s also going to be a blogger meetup that same day.  Andy writes:

"I’d like to invite you to join us for a blogger meetup before my Word of Mouth Marketing keynote at the SF AMA dinner (http://www.sfama.org).

AMA is buying drinks!

Would love to just say hi, chat about word of mouth, and you can beat me up a little about the Blog Council.

Where:  Hilton San Francisco Financial District, 750 Kearny St., in the "750 Lounge"

When:  June 26, 5:00 pm

Details:  The AMA event starts at 6:00.  You can attend the meetup without registering for the AMA event."

Check it out if your get a chance.