Don’t tell the consumers… but one day they really could take control of what we market to them
by Julian Gratton
Success in marketing, and certainly direct marketing, depends on one factor above all others… reaching the right people with a timely and relevant message. And that’s why data, and certainly quality data, is valued so highly.
Ever since the introduction of Customer Relationship Management (CRM), where a company has tools to track and organise its contacts with its current and prospective customers, there has been talk of allowing the consumer to manage the data that companies hold about them.
Power to the people… or the consumer at least
This talk of consumer data control went through a variety of names until it was decided that the best way to describe it was Vendor Relationship Management (VRM). VRM is, if you like, the flip side of CRM. It gives the consumer the tools, technologies and services that help them manage relationships with companies who wish to sell to them.
But how to let the consumer manage the data that someone holds about them has always been a hurdle that needed to be overcome. That was until the advent of Web 2.0, when it became clear that people are more than happy to write things about themselves and tell the world what they are up to.
The question is, who will be the first to utilise the Web 2.0 technologies to enable consumers to have the power to control their own data and the marketing messages they receive… and will it mean the end of CRM as we know it?
It’s time to use your imagination
Imagine if you will that I’ve created a website called ‘Consumer Power’. This website pays people to register online and create a profile that tells me lots of things about them. Everything from their date of birth to important renewal dates, what car they drive, how big their house is, when they last decorated… all the way to their favourite colour and what their hopes and dreams are.
Now imagine that ‘Consumer Power’ then takes this data that they have bought and allows companies to use it (at a price) to market to the end consumer. The benefit to the consumer, apart from being paid, would that they would receive marketing messages (by phone, email, in the post… and if technology continues to develop the way it is… on their TV) that are highly relevant to them and could even include highly targeted offers.
The benefit to a company is that they would be sending marketing messages to what are essentially ‘hot leads’.
Marketing messages prompted by the consumer
We’re already used to marketing messages that get prompted by consumer behaviour, but imagine a world where marketing messages are actually called for by the consumer. The ‘Consumer Power’ website could allow the user to complete a ‘what I’m interested in now’ box where a consumer could highlight a recent interest, say double glazing, thus prompting marketing messages and offers about double glazing.
Similarly ‘Consumer Power’ could be applied to mailboxes the same way spam filters are. So if you are indeed interested in ‘satisfying her in bed’ with the help of a blue pill then by highlighting your interest in this with ‘Consumer Power’ you’ll receive Viagra emails in your inbox. The same rules could also be applied to Direct Mail, SMS messaging and the ads that are shown on the TV at home.
Allowing companies to manage who their messages go to and lower the cost per response
The business end of ‘Consumer Power’ would allow companies to market their products or services to interested individuals. Companies will be able to see, as they do now with email, how many messages were successfully delivered, how many were opened and how many went on to purchase.
The clear benefit for the company, though, is that because they are essentially marketing to ‘hot leads’, their costs per custom should fall. It costs one of our clients in the insurance sector between £10 per enquiry and around £50 to £80 per policy taken out. ‘Consumer Power’ could significantly reduce this cost per enquiry and cost per sale by having a message put in front of a consumer who has shown a genuine interest in what the company is selling.
Once the consumer has received the messages they have ‘hand raised’ to receive and decided to purchase, they simply turn off that interest and thus stop receiving marketing messages.
Possible issues facing the introduction of VRM service
With so much investment put into CRM by companies there will obviously need to be clear financial advantages for switching to VRM. But this is not the only hurdle VRM would have to overcome.
The biggest will probably be the laziness of the consumer to fully complete a profile that would effectively allow marketers to sell to them. After all, they are simply divulging information about themselves in order for companies to make money from them. Will being paid to divulge your information be enough to solicit a large amount of quality data from the consumer?
In addition to this there will always be issues with regards security and the abuse of the details left by the consumer on a database which would surely be targeted by hackers for the quality of data it holds.
So when will VRM be here?
ProjectVRM seems to be the central source for the development of VRM resources and is based at Harvard University, so it’s safe to say there are some clever minds behind the development of this new tool.
They already have a strong belief that ‘free customers are more valuable than captive ones’, and have even gone as far as writing down the principles that VRM will follow, these being:
1. Relationships are voluntary.
2. Customers are born free and independent of vendors.
3. Customers control their own data. They can share data selectively and control the terms of its use.
4. Customers are points of integration and origination for their own data.
5. Customers can assert their own terms of engagement and service.
6. Customers are free to express their demands and intentions outside any company’s control.
Could it be, though, that the perfect VRM tool is already here? Facebook for example is almost the perfect model for ‘Consumer Power’. An Advertiser who chooses to pay to contact you through it already has highly personalised information about you and your friends simply because you email each other, post pictures and show an interest in certain groups.
It’s clear to see that we are on the verge of a change in how we contact our customers. Whether they know it or not, the consumer will soon be in control of the marketing messages they receive.
For VRM to work, though, companies must have reason to value it, and customers must have reasons to invest the necessary time, effort and attention to making it work. Until that day… CRM is here to stay.
If you’d like to see how our under the skin approach can help you… why not give Red C a call on 0161 872 1361 or click here
Tags: Consumer Data, Consumer Data Control, Consumer Power, CRM, Customer Relationship Management, Direct Marketing, Facebook, Marketing Messages, Vendor Relationship Management, VRM, Web 2.0
