It's All Iterative

I just returned from the Conversational Commerce Conference in SF where I had the pleasure of speaking on the panel “The Age of the Individual: From CRM to VRM.”

While we are not yet at that VRM “come to jesus moment”– either from a cultural, behavioral, business or even an infrastructural standpoint– we are getting closer. We are seeing pieces of vendor and consumer behavior, glimpses of an vendor-consumer relationship evolution through what is happening in social media. Consumers are more empowered, and vendors have learned to listen and take cues from their customers. We are still not there, but we’re taking baby steps.

Because we are only in this interstitial phase on the path to VRM with social CRM, I propose a framework for approaching the transition to VRM (from the perspective of brands and people, not technology, I’ll leave that to the smarter folks to figure out). Remember, we’re still in training wheels with social CRM — we haven’t even reached universal data portability, which is a key foundational aspect of a would-be VRM-based business world.

Social CRM is a first step….but here are some things that need to happen:

Education — Businesses need educating about the value of adopting a new model of greater reciprocity in the vendor-consumer relationship through personalized value creation. Consumers at large don’t understand the value of their data, or that they continually create data about themsleves with every check-in, Like, comment or friending. As businesses adopt a model of value creation through interaction and dialogue, consumers are educated and trained to realize the value of their own data.

Expectation– The consumer-vendor relationship from a consumer perspective has always been a bit contentious– annoying emails, labrynthine rewards programs, countless hours lost in call center hell….consumers have been trained to expect a fairly negative experience when in direct communication with brands. Given the power shift in the consumer-vendor relationship as it has been impacted by social media, both consumers and vendors need to set new expectations for the rules of the vendor-consumer relationship

Evolution– We are in early stages. SCRM is not VRM, but an interstitial step in the evolution from CRM to VRM. Successful Social CRM programs require an aggressive approach to measurement, evaluation and iteration. The key difference between CRM and Social CRM is not only that the customer has more equity in the relationship, but that activity in the vendor-customer relationship is now real-time in social spaces. This requires brands develop a clearly defined strategy for measuring and iterating your strategy based on real-time insights and a long term view of creating a mutually beneficial, reciprocal relationship between them and their consumers.

Getting started with SCRM

Listen — Listening is the first step to understanding at a general level your customer’s needs, preferences and desires. But, listening requires deeper analysis to truly begin to create scalable and personalized value creation for customers.

Content — Right now, the core currency of the consumer-vendor relationship now is content, and content that fits within the social ecosystem of your customers….whether its in Facebook, Twitter, Foursquare, etc. Sharing relevant, engaging brand content with customers and engaging in dialogue, rather than spammy marketing messaging and advertising, can act as a proxy for product or dollar-based value creation. Of course, we are still limited in that content relevancy in social spaces is still limited by large segment-based content strategies rather than truly personalized content….but, conversation and search informed (ie customer-informed) content programs (again rather than messaging created by an almighty Creative Director) is at least a first step…

Community — Beyond building a ‘database’ you are now building a community. Rules of engagement, from both sides (vendors and consumers) must be established and a culture of transparency and mutual respect can be developed, as in the case of Ally Bank

Limitations / Challenges to current SCRM solutions
-Data gathering & segmentation
-Data analysis & scale

What others challenges, limitations, considerations to you see?