2009 03 24 Lunchtalk

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Doc's lunch talk at Harvard's Berkman Center. Link here: http://cyber.law.harvard.edu/events/luncheon/2009/03/searls

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2009 03 24 Lunchtalk

  1. 1. The Intention Economy: What Happens When Customers Get Real Power <ul><li>24 March 2008, Berkman Lunch Thing </li></ul>
  2. 2. Problem Example: People vs. Comcast <ul><li>13 August 2007: Mona Shaw hammers her local Comcast office. Literally. </li></ul><ul><li>8 January 2008: “Comcast CEO Roberts Pitches CES on 100 Mbps Cable and Project Infinity” by Rob Beschizza in Wired . </li></ul><ul><li>25 January 2008: “ Comcast, Please Stop Bugging Me For Money I Don't Owe You” by Rob Beschizza in Wired . </li></ul>The real problem: Comcast can’t fix itself alone. Nobody on the sell-side can.
  3. 3. Another Problem: Loyalty Cards <ul><li>Loyalty cards are the Green Stamps of our time. </li></ul><ul><li>Worse, they leverage something that’s broken about e-commerce… </li></ul><ul><li>— That you have to become a “member” and “sign in” to buy anything. </li></ul><ul><li>They inconvenience the customer and cause friction at every point. </li></ul><ul><li>And they are actually stupid about the most essential data. </li></ul>
  4. 4. Case in point: the Harvard Coop <ul><li>Nice place. Loved shopping there. </li></ul><ul><li>Until I got tired of paying +10% for not belonging. </li></ul>
  5. 5. Joining any loyalty program is a pain in the butt. <ul><li>I failed the first few times I tried filling it out. </li></ul>
  6. 6. Now I’m a member. Which means I have to care about this: <ul><li>Why should I have to fill all this junk out? </li></ul><ul><li>… over and over, for every “relationship”? </li></ul><ul><li>Because they aren’t my “relationshps.” They’re my data in somebody else’s base. </li></ul>
  7. 7. Another failure: Donating money to WMBR. <ul><li>What I like </li></ul>
  8. 8. How? Where?
  9. 9. Umm…
  10. 10. So, how about…
  11. 11. Okay, I give up.
  12. 12. And another: WUMB
  13. 13. Bring on the friction!
  14. 14. Aye, we hardly knew ye.
  15. 15. The problem in all these cases is Customer Relationship Management <ul><li>It’s not really about relating. </li></ul><ul><li>It’s about marketing. It’s to you, not with you. </li></ul>
  16. 16. CRM is a $12 Billion business… <ul><li>… that doesn’t work. </li></ul><ul><li>Except by its own metrics. </li></ul><ul><li>Which barely include you. </li></ul><ul><li>Which is why Mona obeyed Howard Beale. </li></ul>
  17. 17. The problem is that most big business still thinks the best customer is a captive one. <ul><li>That’s why they “acquire,” “manage,” “control” and otherwise “own” creatures they call “consumers.” </li></ul><ul><li>And that’s why… </li></ul>
  18. 18. A “free market” is still “your choice of captor.” <ul><li>Even though the Net is now in the middle of everything. </li></ul>
  19. 19. We have to prove that a free customer is more valuable than a captive one. <ul><li>That’s what VRM is all about. </li></ul><ul><li>VRM is Vendor Relationship Management. </li></ul>
  20. 20. VRM is how customers, anywhere in the long tail… <ul><li>… can create and manage real relationships with vendors. </li></ul><ul><li>Or with any organization. </li></ul>
  21. 21. VRM is the reciprocal of CRM. <ul><li>It will provide ways for customers to drive vendors... </li></ul><ul><li>And not just to be driven by them. </li></ul><ul><li>With VRM we can relate for real. </li></ul>VRM CRM
  22. 22. With VRM, the individual is the point of integration for his or her own data. <ul><li>… and the point of origination for what’s done with it. </li></ul>
  23. 23. We have an active and growing community <ul><li>— with hotbeds in Europe & North America </li></ul>
  24. 24. VRM is an open source project. <ul><li>There are already over hall a million open source code bases out there to work with. </li></ul><ul><li>We’re using some of those, and making a few more. </li></ul>
  25. 25.
  26. 26. Here is some of what we want VRM to do.
  27. 27. Manage our own health care data. <ul><li>This is a tall order, and very long term. </li></ul><ul><li>But there are some great people (especially around here) working on, for example, personal health records (PHRs). </li></ul>
  28. 28. Issue a “personal RFP” to whole markets, on the fly. <ul><li>For example, send a message saying you need a 200w 220->110 converter </li></ul><ul><li>in Amsterdam on a Sunday afternoon… </li></ul><ul><li>— without giving any more than the required information. </li></ul>
  29. 29. Assert useful Terms of Service. <ul><li>Instead of this jive: </li></ul>You agree we aren't liable for annoying interruptions caused by you; or a third party, buildings, hills, network congestion, rye whiskey falling sickness or unexpected acts of God or man, and will save harmless rotary lyrfmstrdl detections of bargas overload prevention, or in the event of random siding management retrenchments, or Elvis leaving the building. Unattended overseas submissions in saved mail hazard functions will be subject to bad weather or sneeze funneling through contractor felch reform blister pack truncation, or for the duration of the remaining unintended contractual subsequent lost or expired obligations, except in the state of Michigan at night. We also save ourselves and close relatives harmless from anything we don't control; including clear weather and oddball acts of random gods. You also agree we are not liable for missed garments, body parts, or voice mails, even if you have saved them. Nothing we say or mumble here is trustworthy or true, or meant for any purpose other than to feed the fears of our legal department, which has no other reason to live. Whether for reasons of drugs, hormones, gas or mood, we may terminate this agreement with cheeful impunity, and there’s not a damn thing you can do about it. Accept.
  30. 30. Create a new business model for free media. (one that isn’t advertising) <ul><li>Free media include… </li></ul><ul><li>Non-commercial broadcasting </li></ul><ul><li>Blogs, podcasts </li></ul><ul><li>Music… </li></ul><ul><li>Anything that’s either free on purpose or too easy to “steal.” </li></ul><ul><li>Starting with public media. </li></ul>
  31. 31. The model is called PayChoice. <ul><li>It will be based on the ability of individuals to… </li></ul><ul><ul><li>pay as much as they want </li></ul></ul><ul><ul><li>for whatever they want </li></ul></ul><ul><ul><li>whenever they want </li></ul></ul><ul><ul><li>wherever they want </li></ul></ul><ul><ul><li>on their terms as well as those of sellers. </li></ul></ul><ul><li>Here’s where we plan to see it first: </li></ul>
  32. 32. VRM will inform CRM. <ul><li>Listeners and viewers will bear their end of the relationship burden with stations. </li></ul><ul><li>Relationship can be enlarged to mean far more, and include far more. </li></ul>
  33. 33. Relating will have its own symbol: <ul><li>We call it the “r-button.” </li></ul><ul><li>It says, </li></ul><ul><li>“ I want to pay… </li></ul><ul><li>what I want.” And/or, </li></ul><ul><li>“ I want to relate… </li></ul><ul><li>on my terms… </li></ul><ul><li>and not just yours.” </li></ul><ul><li>“ This is my code’s way </li></ul><ul><li>of letting your code know that. </li></ul><ul><li>Even if you’re not listening. Yet.” </li></ul><ul><li>Its how VRM meets CRM. </li></ul>
  34. 34. The r-button can represent different states: <ul><li>For example… </li></ul><ul><li>Intention to buy (and/or to relate). </li></ul><ul><li>Intention to sell , but also to relate on your (the buyer’s) terms, as well as your own. </li></ul><ul><li>Existing relationship — which can be viewed and unpacked on either side. </li></ul><ul><li>Among others. This is still wide open. </li></ul>
  35. 35. Here are a few ways it might look: <ul><li>(Note: These are old drafts.) </li></ul>
  36. 36. Back to the title question: <ul><li>What happens when customers get real power? </li></ul>
  37. 37. Customers will get their own pricing guns. <ul><li>They won’t be able to price everything. </li></ul><ul><li>But the seller won’t be the only one holding these things. </li></ul>
  38. 38. Customers and Vendors will both get to wear matching rings. <ul><li>Or magnets. </li></ul><ul><li>Whatever we call them, “relationship” will be a fact… </li></ul><ul><li>… rather than marketing jive. </li></ul>
  39. 39. The Intention Economy will get real. <ul><li>It will be based on what customers actually want . </li></ul><ul><li>Rather than the “attention economy” of guessing what customers want. </li></ul><ul><li>… or “driving” customers to want stuff. </li></ul>
  40. 40. The advertising bubble will burst. <ul><li>No, advertising won’t go away. We’ll always need some. </li></ul><ul><li>It just won’t be the communications method of first resort. </li></ul><ul><li>Or the only business model that comes to mind. </li></ul>
  41. 41. Cluetrain will finally be right. <ul><li>So let’s talk. </li></ul>

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