Wednesday, 18 August 2010

Why #VRM is Fools' Gold

There, off my chest. Vendor Relationship Management indeed is Fools' Gold
Now, all I need to do is argument that, and I'll have a few extra enemies. Cool!

Just kidding - right?
Here's the definition of VRM according to Wiki:

The goal of VRM is to improve the relationship between the demand-side and the supply-side of markets by providing new and better ways for the former to relate to the latter. In a larger sense, VRM has the potential 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.
Let me make it short and brief: it's not the V or even the M in the acronym I'm tripping over, it's the R - Relationship. If I buy a bread, do I have relationship with the baker? Bakery? Market, supermarket? Person, brand or organisation of any of those? People related to them?
Geez, all I wanted was a loaf of bread!
  1. If it's not any good, I'll go back and complain.
  2. If it's any good, I'll go back and buy some more.
  3. If it's very good, I'll go back, buy some more, and praise them whenever I can
 - until they mess up

There is, in short, my relationship with a vendor: none. There is no relationship if there's not a darn good product in the first place.
I stand corrected: there might be a relationship, albeit it cumbersome, via bad, to nagging, without a good product. But if the product is satisfactory, you just use it

So why this VRM? I have no idea really, and I just wish people would stop pushing it.
It is the ultimate people-pleaser contest: let me make myself as attractive as possible for anyone out there...
People-pleasing is driven by innate insecurity, a severe lack of self-esteem, no clue of a goal and purpose in Life, and anything else that will waste your limited time on Earth (not mentioning politics and religions)

It is very easy really: either you are interesting enough for vendors to get in contact with, or you're not. If the former, they'll know when and where to find you and have all the needed (by them) metadata on you. If the latter, you're just not significant enough to deal with, whether your data is tattoed on all their employees' forehead or not. Face it

VRM is as bad an idea as was ESB: Enterprise Service Bus. Over the years I've seen that definition on the wiki twist and turn from outrageous Gartner lie to anonymous Integration anachronism. There were ESB's decades before the word was invented, and according to the Law of Infallibility its meaning has been gracefully slimmed and trimmed down so the self-invented cube does end up fitting into the circular hole - that was there from the beginning

Vendor-independence? You can always decide not to buy. Or put up with it. Or become competition for ye olde vendor. The usual market just works perfectly for that, always has, and always will

Just give me a business case please, thank you

5 reacties:

Peter Evans-Greenwood said...


I think it depends on how the vendor defines themselves. If they focus on fulfilling needs (ie. providing commodity technology) then there's not much point of having a relationship with them. If, on the other hand, the vendor is focused on solving a class of problem that you're interested in, then a long term relationship might make sense.

Think Nike, who moved from selling shoes to "promoting running excellence", or Rolls-Royce (jet engines) who moved from selling engines to "making your plane move".

It's the difference between "in the market" vs. "go to market".



Jonathan said...


An interesting point of view that I just could not disagree with more. I could argue that shopping trolleys are useless if the use case only ever covers buying a loaf of bread.

There are plenty of long term relationships that will benefit greatly from VRM, namely, the relationship you have with your insurers, mobile phone companies, banks, doctors/dentists, schools/universities, children's schools etc etc.

Arguing that a concept will not work _for a specific use case_ is easy: Lead is fools gold! (in the production of balloons).

Martijn Linssen said...

Thanks Peter. I guess you're making a distinction between selling products versus selling services?

I'm puzzled by the Nike and Rolls-Royce examples. Both are examples of brands well 'in' the market - is this how they stay in it?

Jonathan, thank you for your view and examples. Some of them make no sense at all, others make a lot of sense

I don't have nor want a relationship with an insurer, a mobile phone company or a bank. I want them all to compete to death and offer me the best service at the lowest price. A relationship (effort, time and energy invested by me!) would keep me attached longer than I'd like to when swapping from one to the other

I'm not interested in these vendors, I'm only interested in the services they offer. But, I can imagine they're more than interested in me, so they can sell me more of their products

Doctors, dentists, schools and universities: I can see how one would like to buoild a relationship with these because they provide services, and only services, for years and years to come - theoretically. Their services are also intimate, personally, high-quality and vested with the eye on the future: you want to build a relationship on top of these services. That relationship has little to do with the vendor, but everything with yourself feeling comfortable

And shopping trolleys are useless if you only buy a loaf of bread. That's why the supermarket (the vendor) also offers baskets. Yet another example of vendors wanting to please the customer, not vice versa

Maybe I can explain by using supply and demand. Insurers, mobile phone companies, banks: an overwhelming supply. Doctors / dentists, universities or schools: an overwhelming demand.
This is where someone would want to profile themselves to distinguish themselves from the next customer, but in my eyes that's nothing less than customer competition. Referring to this situaion comes close to the vertical supply curve, where the models stop working - but that's an extreme situation

CoCreatr said...

Hmm, what about the shop loyalty cards that so many of us or family members carry? Snap - into VRM, connect and go.

A few weeks ago I came from the other side (VRM as golden antidote), fully fired up about how it finally gets in my hands the toolkit that helps me manage my hairy data ball. A tool to compile my scattered digital identity and exert some more self determinism about my personal data that privacy laws are designed to protect and respect.

With my VRM enthusiasm, I went a bit overboard, it seems. Doc Searls picked up the dialog and corrected me. Both are needed: CRM AND VRM. Now I agree.

Cycling home from work, a concept came up for a simple personal data connector.

Martijn Linssen said...

Thank you Bernd! I read your blog post and it made a lot of sense - and I commented there as well

Handing in your personal data happens only once per product / service you buy. You decide if a service is worth (certain parts of) your private data by one-time-only submitting that

But, due to Facebook, people have apparently put up with handing in private data that Facebook has made public without telling or asking

Still, this is not what I have in mind when I hear Vendor Relationship Management - it just makes me think of Personal Data Management. Which is something we all do and have control over, except for Facebook of course, which keeps breaking agreements in order to try to make money?

Would CRM versus VRM mean that, where CRM owns our data, in VRM we own our own?

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