What is Vendor Relationship Management?


Lyly Lepinay

August 19, 2015

A new category of tools and services for empowering independent customers is starting to emerge. We call that category VRM, for Vendor Relationship Management.
VRM is the customer-side counterpart of Customer Relationship Management. Just as CRM gives companies means to relate to many different customers, VRM gives customers means to relate to many different companies. These means are the customer’s alone — as personal as her own browser, computer, clothes, bike or car.
For example, with VRM a customer will have her own way to change her contact information with every company she knows, in one move. Likewise, a customer will be able to inform many companies at once that she is interested in a particular product or service, while also controlling how much she reveals about herself and how that personal data can be used.
With VRM, economic signaling between demand and supply will be far more direct and efficient. It will also support genuine two-way relationships and minimize the need for surveillance and “big data” based guesswork by companies.
The Internet we know today is just twenty years old. It was born in April 1995, when the last noncommercial network connected to the Net shut down and commercial activity began to flow. ISPs, browsers, email, Web publishing and e-commerce all appeared, almost instantly, in forms that are not much different today.
Over the two decades since then, nearly all e-commerce innovation has been on the supply side of the marketplace. On the demand side, not much has happened.
But, the Internet was designed to give every end point — every customer, as well as enterprises of all sizes — a place to stand as a fully empowered and independent entity.
So, VRM is the logical business process that complements the Internet’s end to end architecture allowing business to take advantage of full participation with customers.
Once customers can become true partners with the companies they engage, the economic upsides become incalculable, because clear signaling will be maximized in both directions. Simply put, free customers will prove more valuable than captive ones.
There are now many dozens of companies and development projects working on VRMin various forms (and by various labels), around the world. The emergence of the category is inevitable, because it is implicit in the Internet’s original and persistent design.
As the director of ProjectVRM, I salute Capgemini for being the first major worldwide technology consultancy to take an interest in VRM as an emerging trend, and to do anexcellent job of explaining it to the company’s corporate customers. This will surely help drive understanding of VRM in the world and accelerate development and adoption of customer side VRM solutions.

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