Monthly Archives: August 2012

Personal vs. Personalized

In Worth The Deal? Groceries Get A Personalized Price, Ashley Gross on NPR says,

Heather Kulper is one of those people who really wants to get a good deal. She’s a mom in a suburb north of Seattle who writes a blog about coupon clipping and saving money.

On a recent shopping trip to Safeway, Kulper pulls up a special Safeway app on her phone called Just For U. It shows her deeper discounts on products that she’s likely to buy based on her shopping history. The deals are lower than the club card discount listed in the aisle. When she checks out, she gets that personalized sale price.

“This is the artisan caramelized onion bread, which is normally $4.29. Priced with the Safeway club card, it’s $2.99,” Kulper says. “But with the Just For U personalized deal, it’s 99 cents.”

Kulper says it feels a little bit like she’s getting a secret deal.

It’s kind of like the old days, when you walked into a relative’s small grocery store, and they gave you the family discount. Except now, this is a big corporation using computers to calculate exactly your propensity to buy and at what price.

She concludes,

On this most recent trip, Kulper saved 41 percent with the Just for U app and coupons — $21 altogether — on her purchases. She says she’s happy with her discount, and she doesn’t mind that Safeway knows every tiny little detail of what groceries she buys. To Kulper, it’s worth it, as long as she can save money.

I can’t find Heather Kulper’s blog (the story doesn’t provide a link, and searches go mostly to the story), but it’s clear that she’s one kind of shopper: the aggressive bargain hunter. Is Safeway trying to turn all customers into full-time bargain hunters? Hard to say at this point, because it’s not clear whether a card-carrying Safeway customer is hunting for bargains, or simply forced to use the card to avoid paying the inflated “normal” price. It’s also not clear whether a personalized discount is any different than a coupon. The image above is one I shot of a Stop & Shop scanner, telling me about one in a series of discounts it offered me, based (presumably) on past purchases at the store.

Let’s think about about turning this around, to a system you control as a customer. You share your shopping list with the stores where you like to shop, and they come back with information about what they’ve got. Maybe they tell you they’ll give you a discounted price, or maybe they’ll tell you something is out of stock, or maybe they try to switch you to buying something else. In any of those cases you should also be able to tell them what you like or don’t like about what they’re telling you, and why. What matters in this alternative system is that the system is yours, not theirs. You take the lead, you control the information you share, and you aren’t trapped into many separate relationships, each with its own system for relating with you. In other words, it’s personal — by you —rather than personalized for you.

This is VRM, for Vendor Relationship Management. It’s how you run your relationships with many different companies, rather than how they run their relationships with many different customers. (Those are called CRM, for Customer Relationship Management, a many-$billion business.)

It’s still early, so there’s lots of room for customers to take the lead in helping develop VRM tools and services. You’ll find a list here, in the ProjectVRM wiki.

Why CRM needs to turn around

This guest post is by Charles Oppenheimer, creator of Prizzm and Mightbuy.it

CRM (customer relationship management ) are systems that companies use to track their customers.  The hope for most companies that invest in CRM is that their  investment will produce happier customers, that loyal customers will produce more profits.

To some extent CRM investment has worked for companies that have made long term investments in CRM processes, despite the flaws with these systems.     Apple is a decent example, they invest in very high end  CRM systems – but no amount of money they spent on customer service is too much, they are wildly profitable, and probably just want to spend more to make customers happier.   But many customers  feel that the investment hasn’t worked, they aren’t happy, or often outraged and appalled by terrible service and awful ads  and marketing.  Here is a recent one about United Airlines - one of the few cases where terrible customer service is almost life threatening. Usually it’s not that bad, but as customers we have the right to express ourselves if we don’t like our vendor, either by taking our business elsewhere or complaining – or both.

There are a number of problems with  CRM promise:

1. CRM doesn’t work.  CRM doesn’t “manage” relationships with customers. Oops.  They are databases that track a few data points and transactions – at best. Often they fail to do that too. Oops again.

2. They are inefficient - they can cost an enormous amount of money, smaller businesses generally don’t use them at all.  The cloud/saas has reduced some of the costs, but many costs are organizational and haven’t fallen that far.

That isn’t stoping the CRM industry, many players are growing as fast as ever. Who doesn’t want happier customers?  But there is a shift going on in CRM  - powered by the proveribal social media firehose.  Although there is a lot of hype, it’s true, things have changed, both in marketing sideand service side of CRM. Customers now have systems of their own and public voices. For every corporate dashboard showing stack ranking of satisfied customers, there is likely to be an outraged blog post, or tweets or facebook messages about the company for all the world to see.  The fact that each person is a publisher has changed the way many companies see their customers.  They are a bit scared, and excited by the opportunity, the changes in what’s going on with social media.

Companies are excited about social media because it may produce new revenue channels, and they are scared because customers can say anything they want about any company, with better reach than most marketing campaigns.   And indeed, the fastest growing segment of CRM is those parts that deal with social media. Systems that publish tweets, that monitor sentiment, scanning twitter and responding – these systems are flying off the shelf.

CRM systems have always been fancy databases. Databases of first name, last name, middle name, multiple addresses.  Companies fill that information out themselves,  and hundreds of different companies track the same people, often inaccurately across multiple systems they spend billions on.  And that doesn’t tend to make  happier customers.

The problem with the Social Media investments in CRM is companies are making investments in the same the traditional database CRM model – companies owning the data. They scan social networks and import the data into their CRM system, and believe they know customers better.

Proposal.  Here is where CRM needs to go: Customers need to track companies, and use their own systems to do it.  A model that is the reverse of the current system, companies tracking and marketing to their own customers.  A system that the fundamental data model radiates from the individual, each customer tracking multiple companies.

It’s not how CRM systems are built now. It should be.

Each customer should have records of companies and products they deal with, what they think about them, what issues they have, what they recommend.  That is already happening to some extent – how many of your friends have complained about companies on facebook, how many times do you turn to Yelp for a review instead of the yellow pages? This trend isn’t stopping there needs to be more tools that support customers more efficiently, so each customer will have evolving tools that hopefully work more like Facebook than Oracle.

Let’s help NBC prep for the 2014 Winter Olympics

ice crystals and olympics symbol

The 2012 Summer Olympics are almost over, but not the challenge of a world where more and more customers are looking to watch coverage — especially of the live kind — on devices other than TVs, and through connections other than cable and satellite.

This has proved hard for many cable and satellite TV customers (myself, for example.) who would also like to watch NBC’s coverage on computers, smartphones, tablets, or large screens connected directly over the Internet.

For example, in spite of NBC’s good efforts (in the form, for example, of smartphone and tablet apps), it has often proven hard for cable and satellite TV customers to authenticate with their providers, or to find what programming packages are required to obtain NBC’s coverage services for the olympics.

No doubt NBC will soon be sitting down with itself, and with its distribution partners, to discuss what they have learned over the last few weeks, and to begin preparing for the 2014 Winter Games in Sochi, Russia. Customer Commons wishes to help with that, by convening an independent forum where all of us can discuss what we’ve learned, and where customers can offer constructive help.

This will not be the place to complain, or to assume that the only parties in a position to come up with good ideas and solutions are NBC and its distribution partners. Out here in the long tail, we have plenty of good ideas too, and are willing to help any way we can. (In fact, I did that for NBC’s Winter 2010 Olympics in Vancouver, by contributing ice crystal images that appeared on screen throughout the event.) We are mindful that the goods are not free for the taking, and that improvements must be worthwhile for everybody, starting with NBC and its bottom line.

We’ll start with comments here, while we set up the forum. If the forum proves successful, we will also have a body of experience that can be leveraged in other markets where meeting demands of a fast-arriving future are daunting for everybody involved. We also invite ProjectVRM and PDE.Cc developers to come help out too. (These are developers working to solve market problems from the customer side, in cooperation with sellers.)

We have a unique opportunity here, while the olympics are still going on, to direct everybody’s interests in a positive and mutually helpful direction, a year and a half before the next olympics begin. So let’s go for it.

Craigslist

I’ve been following the Craigslist/PadMapper news.    As the situation has unfolded to include 3Taps,  Craigslist suing both companies claiming all sorts of legal infractions including the assertion that the User Generated Content on Craigslist is now owned by Craigslist (per the rights claims in the Terms of Use) citing those terms as:

“Any access to or use of craigslist to design, develop, test, update, operate, modify, maintain, support, market, advertise, distribute or otherwise make available any program, application or service (including, without limitation, any device, technology, product, computer program, mobile device application, website, or mechanical or personal service) that enables or provides access to, use of, operation of or interoperation with craigslist (including, without limitation, to access content, post content, cross-post content, re-post content, respond or reply to content, verify content, transmit content, create accounts, verify accounts, use accounts, circumvent and/or automate technological security measures or restrictions, or flag content) is prohibited. This prohibition specifically applies but is not limited to software, programs, applications and services for use or operation on or by any computer and/or any electronic, wireless and/or mobile device, technology or product that exists now or in the future.”

I have to remind myself that this is ‘Craigslist’ that ‘hippiesque’ community postings hub.   BUT reading this I am reminded that it is a corporation and compared to PadMapper and 3Taps it is an ’800 pound gorilla.’   Nothing demonstrates that better than this language quoted above from their TOS and their lawsuit.  How can they not see how these terms are in direct conflict with the desires of their huge community of users.  Put simply,  the legal posture misses the forrest for the trees.  The community (Craigslist CUSTOMERS) get this,   of Digital Trends writes:

All that said, putting sites like PadMapper out to pasture is incredibly, incredibly anti-consumer. And it means that Craiglist has two choices: Either allow the likes of PadMapper to exist, or massively update your platform. I’m in favor of the former — slap a licensing fee on interested parties for all I care, and those that are truly getting traffic thanks to the database that Craigslist has created will pony up the cash. Sure, you’re feeding your competition in that scenario, but unless you’re willing to redesign your site for a pleasant and successful user experience then you may as well demote yourself from consumer-facing application to platform.

As something of a short term (but maybe long term) solution, PadMapper is promoting its own service, PadLister, where you can list a home for free on the site. The entire debacle is getting so much hype that PadLister’s name is rising. Considering the angry mob ready to charge with virtual pitchforks, this could easily have a negative effect on Craigslist.

It sounds childish to say this, but you’re being plain mean to users, Craigslist. Your site is chock-full of data I need, but your interface is an exercise in torture. Either give me the tools to effectively use your site or allow someone else to do it.

Craigslist is fundamentally about community, it’s success is because of community support and now it is biting the hand that feeds it . In the wake of this news and community uproar, I wondered if Craigslist would respond to their community,  attempt to mitigate this community relations disaster.  Perhaps  engaging with them to address complaints about the outdated platform.

Given the community uproar Craigslist’s lawyers ought to be urging their executives to ‘make love not war!’  Not so.  Yesterday, Craigslist ‘upped the ante’ by sneaking the following exclusive license clause in Craigslist posts:

Clicking “Continue” confirms that craigslist is the exclusive licensee of this content, with the exclusive right to enforce copyrights against anyone copying, republishing, distributing or preparing derivative works without its consent.

In his blog post, Jonathan Berger writes:

I don’t remember seeing this before at the bottom of the Craigslist posting form. I’m guessing this is the result of the Padmapper debacle?

Claiming an exclusive license over user content is, until yesterday, unheard of and, in this case,  it is just dumb.    Moreover, sneaking in terms, after the fact, is plain wrong.  By doing this, Craigslist made it clear that they have officially moved to the dark side.

From a legal perspective claiming ownership (exclusive license) of the content copyright would make sense if there was a copyright to claim.   You can’t copyright facts so in a classified ad perhaps the only ‘copyrightable’ content is the descriptive wording of the ad .  The  ‘substance’ such as price, rooms, location (in the case of rental listings) is not subject to copyright.  Put simply, dumb move all the way around!  Timothy Lee of Ars Technica wrote an excellent analysis which concludes with the following insight:

“Craigslist fails to recognize that its users gain value by having their advertisements widely distributed and searchable. Instead of working to benefit its users by developing new, innovative features itself or encouraging third-party developers to do the same, Craigslist believes it can retain its strength in the market simply by clinging to its user’s content in a Gollum-like fashion.” 

By standing with the interests of their community, Craigslist could benefit on the business side, too.   As it stands, they are giving up a tremendous opportunity for additional revenue.  As a user of Craiglists’ free service I would gladly pay a small fee to have my listing distributed more widely on other networks. Craigslist could have additional revenue from it’s users and additional revenue from partnering agreements with other networks by becoming a data broker on behalf of their listing users.

I know that this situation will likely be discussed at business schools and maybe it will even be written up as a business case study, in the future.   Depending on the outcome of the litigation, the litigation claims may be discussed in law schools.  It is unlikely that the discussion at the business school will be anything like the one at the law school.   Unfortunately, both will miss the point, that in their zeal to win they are really losing.